By JoAnn Lombardi, President VR Business Brokers/Mergers & Acquisitions

Every business owner should have an exit plan in place. If you currently own a business, you know as every other successful entrepreneur knows that you will not be doing this forever. You want the value of the business to stay high so you can attract qualified buyers to take over ownership and expand whenever you decide it is time to sell. To ensure this happens, have an exit plan in place so you will be able to sell your business for the maximum value.

Understanding an Exit Plan

An exit plan is a series of continually evolving and interrelated plans to help ensure your business will continue to sustain and grow. When you are first putting together your exit plan, you must answer at least the following questions:

• What are your preferred options and timing for exiting the business? For example, sale to outsider, sale or gift to family or employees, merger with a competitor, buyout by a partner, etc.
• What family members are involved in the business and what are their objectives?
• What are your financial objectives and retirement plans?
• What is the value of your business now?
• What key actions are necessary to increase business value and position it for sale?
• What actions are necessary to manage the estate, trust, and tax issues you will face through retirement and beyond?
• What changes in the business and what is your role needed now to preserve your quality of life and your passion for the business?

Taking the Appropriate Mearsures

This includes considering:

• Family
• Health
• Goals
• Finances
• The Business

An exit plan should be action-oriented with implemented realistic measures. You must take a longterm approach when putting together an exit plan for your business, continually updating it, and assessing the progress of implementation against the planned timetable.

Depending on the complexity of the business, developing a comprehensive exit plan is a demanding task that generally takes 3 to 6 months to complete and as long as 2 to 4 years to implement. It will address a wide variety of intricate strategic, operational, financial, tax, human resource, and legal issues. Input should be gathered from key advisors, including your CPA, wealth planner, estate planner, business consultant, insurance broker, appraisers, and mergers and acquisitions advisor.

How can you improve the value of your business?

Complete the “Value Builder” questionnaire today in just 13 minutes and we’ll send you a 27-page custom report assessing how well your business is positioned for selling. Take the test now: