Planning ahead gives you control.
By making realistic, simple plans you take control of your business and your life. There’s a lot of truth in the saying “failing to plan is planning to fail”.
It seems obvious that having a plan is necessary, but it’s 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 one that can be given to the new owner of the business. And it will add value to the business as the buyer is acquiring that knowledge and can use your proven plans, which are based on 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 when you are ready. Not when you are forced into selling. Every business is going to sell eventually, therefore it’s obvious that by having a plan, and sticking to it, you can take control and achieve the best possible price, reduced tax liability, and maximum yield whilst operating the business.
Your plans may either be for succession, or for sale of your business. In either case, the need to plan an exit strategy is paramount. It’s common for business owners who do not have a proper exit strategy in place to have no idea 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 expected, as this can lead to disappointment, financial stress and dissatisfaction.
Some steps to take to create an exit plan are:
- Have the business valued by a qualified business valuer
- Calculate the current net worth of the business
- Plan dates and times for exit and projected net realisation on sale
- Formulate a plan
- Regularly check progress and performance against the plan.
- Start planning for exit from the start.
Remember, planning ahead gives you control.
Benchmark Business Sales and Valuations
