Planning ahead gives you control. By making realistic, simple plans you take control of your business and your life. The saying is true “Failing to plan is planning to fail”. It seems obvious that having a plan is necessary, but it is surprising, and difficult to understand – why so many business owners don’t spend more time creating a business plan, a marketing plan, or an exit strategy. A business plan gives you structure, goals and direction. A marketing plan is a tool that can be handed over to others in your absence, and is also a tool that can be given to the new owner of your business.
This will add value to your business as the buyer is acquiring that knowledge and plan from you – based upon your experience of what works. An exit strategy or succession Plan is an essential part of forward planning for any business owner. It allows you to leave the business on your terms, and when you are ready – not when you are forced into selling. Every business is going to sell eventually, therefore it is obvious that by having a plan, and sticking to it, you can take control, and get the best possible price, reduced tax liability, and maximum yield whilst operating the business. Your plans may be either be for succession, or for sale of you business, in either case, the need to plan an exit strategy is paramount. It is common for business owners who do not have a proper exit strategy in place, to have no idea of what their business is really worth, and what asking Price should be set. It can be an unpleasant experience for a business owner to find that the business is not worth the price that was being expected, as this can lead to disappointment, financial stress, and dissatisfaction.
Some steps that should be taken to create an exit Plan are:
Step 1. Have the business valued by a qualified business valuer.
Step 2. Calculate the current net worth
Step 3. Plan dates and times for exit and projected nett realisation on sale
Step 4. Formulate a plan
Step 5. Regularly check progress and performance against the plan
