Ask a business owner about their exit strategy, and you’re likely to get a blank stare in return. Why? Typically, an exit strategy is the last thing on your mind while you’re working hard to make your business as successful as it can be. As an entrepreneur, you live for the challenge of launching your business. It’s easy to forget that the decisions made today can have huge implications down the road.
There’s also a psychological roadblock to overcome as the idea of not being in business is synonymous to a death for some business owners or considered “failing”. You may know in the back of your mind that an exit strategy is important, but you put it off indefinitely—you’ll take care of it later. An exit strategy may sound negative, but it isn’t. It’s simply a plan for what will happen when the day comes that you want to leave your business or need to leave it for personal reasons – or purely because it’s time to retire.
An exit strategy is critical. Important. Incredibly important. Insanely important as a business owner. You’ll be prepared for the future thinking ahead to that day when you’ll no longer run your business. It’s not enough to build a successful business; you must have an exit strategy, a way to get the money you made back out. An exit strategy will ensure that you, your finances, and your business are protected.
So, whether you’re looking to move on in the near future or just want to plan ahead, we have some tips to make sure you put together a solid exit strategy for your business.
3 Ways You Can Start Planning Your Exit Strategy, Today
Define Financial Independence
Financial independence can mean something very different to every entrepreneur. Take the time to envision and plan what financial independence means to you. For some, it might mean multiple vacation homes with the ability to run a business out of an office. For others, financial independence could be having enough assets invested to generate a steady income stream to live the life you’ve always envisioned for yourself. Taking the time to set this goal upfront will help to inspire and encourage you through the obstacles and emotional challenges every business owner faces so that you’re set up for success down the line.
Learn the Sale Process Early and Commit to Your Exit Strategy
After years, possibly decades, of hard work, figuring out the sale process of your business and making those trusted business relationships can be almost insurmountable. This is where financial advisors who specialize in serving business owners can be your knight in shining armor. Financial advisors who are committed to excellence will have certifications or designations stating they have developed a specialized skill set to serve business owners. A great example is the Accredited Wealth Management Advisor designation provided by the College for Financial Planning. The Top Advisors who hold Wealth Management designations have taken the time to develop trusted relationships with a team of professionals to guide you through a smooth sales process for your business. Ultimately, your exit strategy is best executed when you aim to achieve your definition of financial independence.
Obtain Annual or Frequent Business Valuations
With your definition of financial independence firmly defined and your exit strategy in place, you’re ready to build your business to achieve your dreams. The value of your business is constantly changing based on recent sales and the economy. Having your business valued on a regular basis will make sure you don’t miss the opportunity to sell and realize your dream. Once the valuation process returns your definition of financial independence, don’t hesitate to seize it!
Don’t Freak Out!
Does planning your exit strategy leave you feeling overwhelmed? Let me take it from here. I can help you achieve your financial goals and in developing an effective exit strategy. Don’t put it off. The time is now! Let’s meet!