The successful business that you started is the result of years of hard work and personal sacrifice. Knowing that you were able to create a concept that other people found appealing and could manage that business until it grew into a thriving organization might even inspire you to want to move on to a bigger project.
Of course, you don’t want the company you spent so much time developing to fall apart when you leave. If you intend to sell the company or transfer it to others so that you can retire, you need to start developing an exit strategy.
What does that process entail?
Determine what the business is worth
A business valuation and a review to determine how much revenue the company will likely generate in the next few years will be important steps in the exit strategy creation process. You need to know what the company is worth to ask for an appropriate sale price, and an estimate of future revenue levels can help make the business look even more attractive to prospective buyers. You also need to consider the company’s needs as it continues to develop.
Create a succession plan
Having a succession plan means providing information about how to choose someone to take over your role or how to train that individual. Detailed explanations of how you manage the company and your general responsibilities will make it easier for someone else to take over your role after you leave the business and for a buyer to potentially nominate the right managers or executives to fill your role at the company.
Address the need for transitional support
Whether you intend to have family members take over the company or you will sell the business to a competitor, it is often necessary for the owner or executive running a business to help support the new owners and management team.
Transition support could last anywhere from a few months to a year or longer. Recognizing the need for transition support and offering it to the other party in the transaction will eliminate one of the common concerns about buying a business.
You need to think about what your company and your employees will require to continue thriving even after you move on to another venture or the quiet enjoyment of your golden years. Developing an exit strategy is a wise choice for any business owner intending to sell or move on from their company in the next few years.