Peter Ranyard shares his knowledge on preparing to exit your business.
Where the heck is the exit!
To add to a fantastic blog by Ann recently here https://oxygen8.co.nz/blog/why-do-people-choose-be-business-owners One suggestion when purchasing or starting a business is to consider what your exit plan would be.
What? You say, why would I think about an exit plan when I am just getting into this business I have purchased or started?
Well, the answer is twofold. Firstly, if you are purchasing or starting up your own business you need to consider how you are going to get out of the business at some point in the future, whether it is to plan to pass it on to the kids or sell it or even just close it when you choose. The best time to do this is before you get too caught up in the ‘working in the business’ rather than ‘on’ the business as many of us do.
Secondly the idea of an exit plan does not necessarily mean you are going to exit, but it is a plan ‘should’ you want or need to at some point. Knowing how, when and at what point you could exit the business and knowing what you need to have in place to be able to do so, without losing your shirt, provides the beginnings of a road map to follow. Rather than like many of us do we make it up as we go along and one day realise, we have been working our butts off on the wrong path and we then spend another few years getting the business into a state where we could exit it if we chose and possibly sell it for a sum of cash, retire and go fishing for the rest of our days in relative financial comfort!
The exit plan should be at least 5-7 years ahead, the cycles of business pretty much mirror a 5-7 year cycle of survival, consolidation, growth, survival, consolidation, growth etc and therefore the first 5-7 years will more than likely find you working to get the business to where you want it to be before you have anything near to a saleable business.
As the 5-7 year anniversary approaches however you may find that you don’t want to exit the business, you may find that you have in fact positioned yourself in a good place, perhaps the business is being managed for you or you are spending less time managing it anyhow, you like where it is at, the plan though can remain in place, just cycle it for another few more years of your choosing.
So, need help working out an exit plan? Whether you are one, ten or twenty years into your business and need some help with an exit strategy we are here to help contact Peter Ranyard at peter@oxygen8.co.nz or on 021 242 6986 for a quick call, consult, chat, or plan.