Business owners are often focused on the present moment, creating short-term goals to get them where they want to go fast; but what about a company’s long-term goal, as well as the owner’s future?
An exit plan is one of the most overlooked components of owning a business. Aside from the initial start-up actions, you must also think about questions like how long you want to work in the business, what annual after-tax income you want and need for retirement, and to whom you may want to transfer the company to. While these may seem to be far off questions, thinking about them from the start maximizes value, minimizes risk, and maintains control of your business.
Our team rounded up the top 3 reasons why every business owner needs an exit plan:
In the eyes of investors, a business with an established exit plan is very attractive. With an increase in equity investments, your business can ensure financial health and maintain profitable sales even in a buyers’ market until the time is right to make your exit.
Being prepared with an exit plan is also important in the face of unforeseen or catastrophic events. If for whatever reason you find yourself needing to leave your business, it will take less time and effort to do so if you already have a plan in place.
With a business usually being an owner’s biggest asset, it is extremely important to remain in control in order to get the most out of the eventual transfer or sale. Having a plan previously setup will allow you to know every step and prepare you for when it is time to sell.
While many people love to reference the quote “live in the moment”, it may not be the best strategy for business owners. Creating an exit plan from the start will save you time, money, and a whole lot of stress when you’re “living in the moment” later on.
Symmetrical works with privately held, mid-market companies, helping business owners understand their current situation and create strategic plans to achieve their business goals. For more information on our team and services, please contact us at firstname.lastname@example.org.