Starting the exit and succession planning process can be daunting. Where do you start and how do you know the best decision(s) to make for your business and you personally? The best place to start is to determine your exit plan options and then benchmark where you are now from a personal readiness and a business readiness perspective. Then look at where you should be.
By completing these assessments, you are conducting an awareness and education program and making sure you have explored all your exit options.
Developing a basic grasp of your firm is the first step in arranging your business exit and determining your exit options. Always make sure you can summarize on a single page what your company does and what sets you apart from the competition. In addition, that includes drafting a business description, deciding on high-level objectives, and formulating your initial exit planning viewpoints.
Prepare the sale of the business or transfer to new owners. Your company will be valued more the more you get this right. Fill out a Business Attractiveness Questionnaire and an Exit Readiness Questionnaire to assess your strengths and limitations. Once you’re done, tally your score for an idea of where you stand. This reveals the weaknesses in your company and aids in the creation of an action plan.
Personal Readiness Will Determine your Exit Options
What good is constructing a successful company, adding value to it, and selling it when the market is appropriate if you pay excessive taxes to the government? With careful tax preparation, you might be able to take advantage of tax regulations, structures, and breaks that allow you to formally lower your tax liabilities. Business owners should also reassess their wealth management plans both before and after the exit. It’s equally crucial to put an emphasis on your welfare (health and well-being) as you expand your firm as it is to have a well-thought-out “life after exit” strategy. Consider how this will affect your estate plan and your wish to support your family in the event of your passing or a major injury. There’s a lot to think about!
Knowing the value of your company is an excellent place to start when creating an exit strategy. This valuation may be formal or informal. You might want to consult a certified professional company valuer for help.
You might estimate the worth of your company by viewing recently sold businesses in your sector. Look at the profit multiple (EBITDA) and find out the variety of multiples at which they sold. Examine your Business Attractivity and Exit Readiness Scores to see where you fall inside this range. Your results will be closer to the upper end of the range and will likely indicate a higher business value. Additionally, this module will analyze your comprehensive budget forecast, profit plus add-backs, as well as industry benchmarks for your profitability.
Determine Your Exit Options Review
Your timeframe and your leave choices were covered throughout the assessment phase. More information about your choices and what to think about while choosing your timing is provided in this section. You should take into account the requirement to integrate market, personal, and commercial time periods into a one-page strategy. Then, you must comprehend the distinction between an internal transfer and an exterior transfer as well as the 10 fundamental exit possibilities.
Exit Plan Gaps
Everything that came before this section established where you are right now and what you are capable of, both personally and in terms of commercial value and readiness. You will develop action plans in this section to put your strategies into practice and close some of the gaps you have discovered.
Review the assessments and develop action plans for enhancing the value of the business, and developing business and marketing strategies. When you determine your exit options, also includes preparing for a departure, and preparing for estate planning, personal wealth, wellness, and “life after exit.”
Exit Planning Goals
The better judgments you make to achieve a successful exit depend on how forward-thinking and knowledgeable you become in each phase of the exit and succession planning process. However, it’s possible that you’ll examine, revise, and adjust your goals and objectives as you work through your action plans and get input from expert advisers.
For your exit strategy, who you want to sell the firm to, and how much you want the business to be worth, you should try to establish clear goals. Include your personal wealth, personal wellness, and “life after departure” goals when you determine your exit options and goals. These objectives are equally vital to your business value.
Exit Plan Implementation
You should now be certain about your direction. You have determined your areas of weakness as well as created the first set of activities. Now is the time to consider the big picture. Implement an action plan after reviewing your available resources, scheduling, and personnel restrictions.
Determine Your Exit Options Review
You must examine three items once a month. Your business’s performance metrics, business plans, and exit strategies. We strongly advise that you meet formally with your designated Business Advisor at the conclusion of each month. One or more significant employees, mentors, family members, or business advisors may attend this meeting. Lack of successful strategy implementation is the main cause of CEO failure. You and your team will be held accountable during a regular monthly meeting.
Determine Your Exit Options with Maus Software
With tools that support tried-and-true business techniques, Maus assists business owners in achieving their professional objectives. We also assist you in preparing your business exit when the time comes.
Book a demo today and get started!