It may seem simple, however, creating an exit plan can take some time, research, and careful consideration. There’s a lot to take care of and it can be overwhelming. A step-by-step plan can help organise the planning process.
The first step for your exit plan is to decide what your goals for your business are. These goals may tie directly into your own personal financial goals as well. For example, if you plan to sell your business you may plan to use the income as a way to pay for your child’s university or to fund a new business venture.
Decide what you want your exit plan to accomplish first and understand the reasoning behind your goals. Why do you want to sell your business? Why do you want to liquidate your business and close it down?
Your next steps depend largely on what you decide to do. What type of exit plan will help you achieve your goals?
Selling your business
If you decide to sell your business then you’ll want to research the sales of similar businesses. What did they sell for? Why did the owner buy them? What changes did they make and why? How are similar businesses valued in the industry? There are websites that serve as business brokers. You may be able to do some research there.
Closing your business down
If this is your decision, you’ll want to take a look at how you can profit from your assets. You’ll also want to plan the timing of your exit. For example, if you know that you’re closing your business in two years, you can increase your salary and stop saving money. You can cut back or eliminate marketing expenses and make other changes that allow you to pull as much cash out of your business as possible.
A checklist of documents
Also consider creating a checklist of documents. For example, you’ll need to legally dissolve your company and cancel registrations, permits, licenses, and business names. Make a list of these documents and where they’re located so that you, or your virtual assistant, can take the necessary steps. By the way, you’ll want to keep all documents related to your business for seven years as required by HMRC. Taxes and debts will also need to be managed.
Checklists are just one tool that can help you plan and implement your exit strategy. Let’s take a look at some other tools you can use to make exiting your business easier.
If you are interested in exploring a merger or sales opportunity, please contact me, I am always on the lookout. We can have an obligation chat about your business to see if there’s a way for us to work together, or I can look into my contacts to see if I can connect you with anyone that would be better suited to help you.