It really isn't that hard...

It’s for life and not just for Christmas?

Is a business really for life and not just for Christmas?

OK, maybe a bit longer than Christmas, but in my honest opinion, an exit strategy is as important an aspect of your business plan as your projected cash flow, potential markets and even your product and service list!

When it comes to business, ‘Getting out’ can be so much harder than ‘Getting in’, and the exit strategy is a fundamental element that most business owners fail to address with the importance it deserves, if addressed at all.

An exit strategy is there to ensure you cash in for maximum return with minimum effort.

When speaking to other business owners, I tend to find that they are so focused on building their business that they feel hesitant or even ashamed to address the exit strategy as they see it as a negative process as it signals the end of their business and this equates in their eyes as a failure. Failure to exist.

Planning the exit strategy can be an incredibly powerful tool to enhance the building of any business. It can help focus realistic goals in your business plan and can act as a great yardstick when it comes to measuring the progress of your business.

Have you reached the expected turnover to enable you to delegate your role so that you can step away from the day to day operation and still draw a dividend?

Have you structured the business in a way that ensures it can be packaged up and is more appealing to a potential buyer?

You wouldn’t start a journey unless you knew your destination, so why start a business without setting your ultimate destination?

A director from Devon who didn’t get out when he should!:

A very good friend of mine ran an international business for roughly 21 years and despite making a great living from the company, he believed so much in building his business that he re-invested most of his profits back into the business to keep it growing. He never had a true exit strategy and believed that he would simply sell up when he wanted to stop.

Unfortunately, changes in his industry resulted in a reduced demand from consumers and the business quickly fell into trouble. In the space of 8 months, a very profitable business and appealing investment opportunity suddenly became almost worthless. Administration proceeded and the company ceased trading within the following 60 days!

The bitter pill was that the company attracted a great deal of interest from other companies wanting to expand over the 10 years preceeding the final year. Every time I meet this friend which is about twice a year, his only regret was not getting out when the going was good!