As an owner manger, if you are thinking of selling your business it is essential to give some thought to your exit strategy and how you plan the get the most from your business when you come to sell it. This planning and preparation work can take a number of years – this is the best way to ensure that the business sells for the maximum amount. You only sell a business once.
BUT…. even if you have no immediate desire to sell your business, then thinking through an exit strategy is a great idea. Having an exit strategy in a sense forces business owners to stand back from their business and take a long hard look from the view point of a potential buyer. Too often, most entrepreneurs spend all of their time with the normal day to day fire fighting, but just occasionally they need to step back and see the bigger picture. The sort of questions they should ask themselves are:
Is all of the businesses value actually in the owners own head? Could the business function without the owner’s constant intervention?
Are they building long term, sustainable value into their business…. is there value in the company brand?
Do customers return to them again and again? – recurring revenues are highly valued
Are there enough processes to show that the business is well managed?
All of these are key questions when a business sale is imminent, but are also very relevant when a sale may be some way off. Owner managers have no problems working “in” the business, but they also need time to work “on” the business – in order to build it’s value.
Having a thought exit strategy also guards against the unexpected. If the owner is ill (or worse!) and unable to continue in the business, then how will the business survive? Or, what happens if someone comes in, completely unsolicited, and offers to buy the business?
So, to answer the opening question…. every business needs an exit strategy!