We've all sympathized with the star athlete who refuses to retire. But eventually, an athlete's failure to perform will force his exit from the playing field.
The same is seldom true for business owners. Some owners find satisfaction in being active in their companies despite age and achievements and, often, despite enormous financial success. Should you leave your business just because your friends are retiring or you became entitled to Social Security years ago? Or should you continue on?
Owners should not be pushed to leave a business before they are ready. However, it is your responsibility, as leader of your business, to prepare it for the inevitable. After all, someday you will leave the business, even if they carry you out on your shield. Don't let a failure to plan prevent you from doing what you want, when you want.
Engaging in exit planning does not mean chiseling in stone a departure date from your business. You can continue to be as active as you wish for as long as you wish.
Exit planning means that you work, now, to make your company increasingly valuable --whether you plan to stay or leave. No matter your current departure intention, you must prepare your business for the day that your attitude or life circumstances change. One of the goals of exit planning is to position your business to carry on without you.
Consider just one facet of exit planning: strategic business planning. Ultimately, much of the value of your business is based the ability of others to replace you. If you are irreplaceable, then your business has little value to a third party and cannot be continued by insiders. For a business to have value in anyone's estimation, it must be able to thrive without you. To increase its value, your company should have:
- Management apart from you (if business size warrants) that can fill your boots.
- Value drivers in place. These include developing operating systems that improve the sustainability of cash flow, diversifying your customer base, creating and continually refining your strategic business plan.
- A business continuity plan to be certain the business continues if you do not.
Taking these steps prepares your business for your departure on your timetable. These steps can also make your business more valuable and sustainable whether you are there every minute, or not. Beginning your exit plan today can help to give you flexibility and peace of mind, no matter when, or even if, you plan to leave.
To get started building your exit plan, contact Andrew Williams, Vice President, Business and Transaction Management at firstname.lastname@example.org, 574.370.7376 or Jeanne Englehart, Vice President, Client Management at email@example.com, 616.235.3555. Andrew and Jeanne lead our exit planning practice and look forward to sharing their expertise and helping you plan for a successful exit.