An exit strategy is often referred to as succession planning. Well, what exactly is succession planning and what does it involve? In short, succession planning is ensuring that your business will continue beyond that of the current management team. Every business should have an exit strategy and for this to be successful, careful and considerable planning is a must.
In business, your wealth is materially affected by your ability to realise and/ or transfer your interest to family members or a third party. A successful exit strategy can be affected by a number of factors, including:
- sale of your business
- management buy-out
- transfer to family members
An exit strategy plays a key role in determining the strategic direction of your business and it is for this reason that it is always best to begin with the end in mind. Taking the time to define and execute strategies to achieve your exit strategy will generally increase the value of your business.
Quite often clients start to think about the value of their business when they are ready to sell or planning to retire. Unlike spring cleaning your house and getting it ready for sale, preparing a business for sale is definitely not a four week process!
Our advice to clients is that they should be continually striving to improve their business profit and cash flows, which will ultimately lead to an improved business valuation. We work with our clients to assist them to improve the value of their business by looking at strategies to:
- increase profitability
- increase cash flows
- improve systems and procedures
- protect their assets
- monitor results
If you would like to find out more about your succession journey or to see if your business is sale ready, then please give us a call.