Stepping Back: Do You Have an Exit Strategy for Your Business?
Owning a business can be brilliant, but you might not want to do it forever. Whether you’re ready to retire, want to cash out, or just need a break, at some point, you will probably want to move on from your business. Even before that time comes, you’ll need a plan for stepping back.
Options for Stepping Back
Think about the future you want with your business. Do you want to step away completely or stay involved? Exiting a business can take various forms, such as:
- Selling
- Closing down
- Passing down some or all of the business to a family member
- Handing on some responsibilities to other team members while retaining a role
- No longer working at the business but retaining some ownership
Why Is an Exit Strategy Important?
Stepping away from your business can be a complex process. You don’t want to be rushed or pressured when you start this process. Having an exit strategy, also known as a succession plan, allows you to step back in a way that best suits you.
A plan ensures you can maximise your sale price and facilitates a smooth transition to the new owner. With adequate preparation time, you can support a new owner in borrowing or ‘earning out’ the purchase of your business.
How to Create a Succession Plan
The closer you are to exiting your business, the more detailed your succession strategy needs to be. Your plan will vary depending on your situation, but it should include:
- Written goals
- A list of assets with their values
- A timeframe
You should also communicate with other involved parties, like family members or senior team members.
Seek solid advice from professionals, including us and your lawyer. If you’re considering stepping back, we can help guide you through the options, calculate the potential value of your business, and develop a comprehensive succession plan. Get in touch! We’d love to hear from you.
