Planning Your Exit Strategy
Your exit strategy is your succession plan from your small business. For each small business, their succession plan could look different. It could involve, depending on the level of planning.
- outright sale of the business to a third party
- transfer of management to family members, along with some form of ownership control
- sale of the business to a staff management team
- closure of the business because options were not sought early enough, or
- a combination of various elements of the above.
A proper succession plan could take put to 3 to 5 years, depending on its complexity, so the earlier you start, the better. There is no one-size-fits-all. Each business is unique, with its own complexities and personal dynamics. It is important to establish goals and objections from the beginning, and have a clear focus as you go through the process.
The roadway to succession planing generally has 12 steps, with some steps being more complex than others. Some might be easy and quick for you. Others might take a fair bit of time to implement. Others might need the help from professionals, such as your accountant, financial planner, lawyer or insurance broker. These are roughly the steps:
- goals and objectives
- exit strategy
- business valuation
- business structure and organisation
- tax and legal considerations
- estate plan
- successor selection
- successor training
- contingency plan
- conflict resolution
- timelines, and
- communication plans