If you want to get the most for your business when it’s time to go, you’ll need a plan. Yet many business owners have no plan or strategy about their business exit. They think the “man with the golden cheque” will appear when the time comes. They think then they’ll have options about which path to go down when it comes to getting out of their business.
Yet more often than not there is no “man with the golden cheque”. Surely it would be better to have a plan. A plan that lets you control the sale of your business and work within your own time frame.
When it comes time to exit your business, there are a couple of big questions to ask. One is how your successor will find the money to buy it. That’s assuming you’ve got someone who’s interested. Another big question is whether you’ll be able to maintain your lifestyle after you sell.
What if you could plan now for the sale of your business? Even better, give yourself the option to take the cash or a funded management buyout?
Core Traits of the Best Succession Plans (“Exit Strategies”)
Some succession plans are better than others. After 40 years of working alongside business owners we’ve got a pretty good idea why.
The most effective succession plans have the same core traits. In almost all cases the business owner has the following things:
- They run a profitable business which funds its own sale. It also maximises their benefits and rewards.
- They give serious consideration to their succession plan. They are able to identify when, how and to whom they could sell their business.
- They focus on how they’ll maximise their future returns when they sell.
- Their plan will provide them with the greatest return of their capital. This will allow them to continue their existing standard of living.
A great succession plan should –
- Maximise your capital gain from sale of shares.
- Establish several buy/out options within a 2-10 year period.
- Increase the number of potential purchasers.
- End any need for “outside” funding.
- Avoid you having to “open the books”.
- Have customers unaware of the sale.
- Maximise future income to you during the phase-out period.
How does your succession plan stack up against that? And if you don’t have any succession plan at all, then it’s time to start one.
If it all this sounds a bit beyond you and you’re not sure where to begin, we can help. Give us a call on 09 489 1650, or drop us a line.
Read the Free Special Report: Is Your Business Ready To Sell?