Why it’s So Important to Have an Exit Plan

So you started your small business, got it up to speed, and now you are beginning to see real profits and real results. It feels great!!  However, you have to start asking yourself “I’m not going to live forever, so what is my off-ramp for my business?” That’s right, you have a 100% chance of exiting your business since the immortality pill is many years from being perfected. So, let’s start discussing your exit plan.

An exit plan is a strategic plan that outlines how you, as a small business owner, will leave your business when the time comes. This plan could involve selling the business, passing it on to family members or have key employees buy the business. Simply shutting down the business should be the last thing you do as a business is designed to live forever if you grow it properly.  While you may not want to think about leaving your business, having an exit plan in place is crucial for several reasons.

First and foremost, an exit plan provides clarity and direction for the future. Without a clear plan, you may find yourself stuck in your business and unable to move on to other opportunities. An exit plan can help you set goals and timelines, establish criteria for potential buyers or successors, and ensure that the business is ready to be transferred when the time comes.

An exit plan can also help you maximize your return on investment. Whether selling the business or passing it on to a family member or key employee, having a clear plan in place can help ensure that the business is sold for its full value. This can be particularly important if you invested a significant amount of time and money into your business and you want to ensure that you receive a fair return.

Additionally, an exit plan can help ensure the longevity of your business. By planning for the future, you can help ensure that your business continues to operate successfully after you leave. This can be especially important for family-owned businesses or businesses with key employees who are essential to the business's success.

Finally, an exit plan can provide you peace of mind. Knowing that you have a plan in place for the future can help reduce your stress and anxiety, and allow you to focus on running and growing your business in the present.

While it may be difficult to think about leaving your business that you've worked so hard to build, having an exit plan in place is crucial for your success. Not only does it provide clarity and direction for the future, but it can also help maximize your return on investment, ensure the longevity of your business, and provide you with peace of mind. Whether you're just starting your business or have been running it for years, it's never too early to start thinking about your exit plan.

Kevin Weir - 3/6/2023


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