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Developing an exit strategy |
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A critical requirement of all successful businesses is to have developed an exit strategy. The exit strategy should be a work in progress and part of your business plan.
As businesses develop, different management styles are required. For example in challenging periods, an involved focused manager would be the best option, but during good times management can focus on planning and future growth
Business exit planning considerations:
- When do you want to exit?
- Do you want some involvement in the business when you exit?
- Do you want to retain some equity in the business?
Sole Traders – two main challenges
Generally, the owner of the business 'is the business' and has very little to offer potential buyers unless there is some income generated by the business without the involvement of the owner. Even business owners that have employees with a management structure are reluctant to give too much authority to staff. Buyers look for businesses that are not reliant on any one person and has its’ own identity. The more systemised and the less reliant a business is on the owner the more its worth.
What Next?
Your business plan should have a method of creating equity that potential buyers see as being of genuine value and are therefore willing to pay a premium. No one is indispensable and businesses need to have systems and procedures in place that allow efficient operation for the satisfactory service of clients needs even when the owner is not at the coal face.
Business Coaching Plus will prepare your business for sale to achieve the very best possible price. We will systemise your business, create equity and extract you as an integral part of the business.
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