If you are faced with having to plan the exit from your business, the task can quickly seem overwhelming. In itself, it is a big step to go from building a company to training potential candidates who can eventually take over the management of the company. Then there is the process of settling with yourself what you want to do once you have let go of the reins and said goodbye to your business. Therefore, it can quickly seem overwhelming to plan to leave your own business. Our experience is that you as a manager can rarely handle the planning of your exit from the company alone - at least not if you want a successful exit on your terms.
So how do you make planning more manageable?
An effective way to get started is to make a plan that supports your exit strategy - and be sure to write it down. If you do it right, a written exit plan can give you 3 potential benefits.
1. More overview, sense of responsibility and greater chance of success
Written communication is often clearer and more specific than oral communication. If you write down your ideas and thoughts instead of just communicating them orally, you will usually start thinking about them in more detail. At the same time, writing down your plans will minimize misunderstandings, especially about goals, desires, and available resources, which in turn will lead to greater clarity and consistency. In the long run, this can lead to a significantly shorter and more efficient process when you later have to implement your exit strategy.
Additionally, a written plan for your exit strategy will typically foster more accountability in the process. When making a detailed written plan for your exit strategy, be sure to design an executable plan with clear guidelines. Be sure to describe responsibilities and set deadlines, both for yourself and for any advisors who are involved in the process. When you have a written plan, it is much easier to avoid the temptation to postpone the course. The plan gives you clear documentation that you have committed in writing to implement your exit strategy. Many business owners wait too long to get started on planning and implementing their exit because they forever apologize for the hustle and bustle due to skipping actions. Your written goal helps you to avoid the same temptation to postpone the implementation of your exit strategy indefinitely.
If you are just starting to consider selling your business and your exit is still a long way off in the future, it may feel easier to postpone the actual planning. You might therefore be in doubt as to why you should start writing down your goals for exit from your business? The thing is, you have a much better chance of reaching your goals in the long run if you write them down. In 2015, the psychology professor Dr. Gail Matthews conducted a study at Dominican University in California. The study included 267 participants with vastly different backgrounds and job types, each of whom had to set personal goals and then try to meet them. The result of the study showed that the participants who wrote down their goals had a far greater chance of actually achieving their goals. Compared to the participants who formulated their goals but did not write them down, the participants with written goals had 42% more success in achieving their goals.
2. Keep control
A common paradox when planning an exit strategy is that many business owners do not want to relinquish control of their business until they are ready. At the same time, the same owners do not want to spend quite a lot of time planning their exit strategy. Therefore, it is an advantage to draw up a written exit plan, because it gives you as a business owner the opportunity to retain control of the company. At the same time, you also retain control over how and when you transfer management and ownership of the company.
To write an effective roadmap for your exit strategy, it may be a good idea to ally yourself with one or more advisors e.g. an exit coach with expertise in exit strategy and exit planning from companies. This will save you time and resources, because as soon as you have a written plan for your exit from the company, you can leave the implementation of the plan to your team of exit advisers. Once you have set your goals and written them down, your exit counselors can begin to identify what it takes for the goals to be accomplished. With a written plan, you can thus maintain control of your business until you are ready to pass it on and step back. At the same time, do not spend all your time planning your exit. That way, you get an efficient planning process and you still have time to concentrate on optimizing the value of your business.
3. Minimize time and cost
Without the right guidance or system it can take many months to make an exit plan, and it can then take years to bring the plan to life. When the exit plan is to be written and executed, it usually requires input from the owner as well as a team of advisors, and it can also involve both the company's management team and even the owner's family. With so many people in the process, you as the owner can easily spend more time and have more costs associated with your exit from the business than what is actually needed. A written exit plan can help limit both the time and cost of the process.
A written exit plan can make the process around your exit more efficient in terms of both time and cost. With a written or system aided plan, you can keep track of the development and when which tasks are to be completed in the process, instead of wasting time having to call each individual advisor and inquire about how far he or she has come. If you make use of an exit coach, you have someone who is responsible for continuously updating the written plan and making sure that it constantly reflects those of your resources, goals and means that are relevant to your exit from the company. When the team in charge constantly knows what to do and when to do it, it will usually minimize the time and money you have to spend on the process yourself.
Of course, it is important to keep in mind that a written plan is not carved in stone, but can be changed along the way - which often happens. Your company and your own goals are likely to evolve all the time, but a written plan can help you develop your strategy planning in step with your overall goal.
Would you like to find out if a written exit plan can focus your exit strategy and make it easier to implement? Need help starting the process of creating a written document that can guide your business, your family, and yourself through your exit from the business? Then contact us today and hear more about how we can help you.
