Setting Exit Objectives: The First Step in Exit Planning
The starting point for any type of plan is defining its goals. In the case of planning a business exit that means knowing what it means to “exit your business in style.”
Philosophers, business owners, and successful people from all walks of life understand the critical importance of establishing goals, creating plans to attain those goals, and persevering to see their plans through to completion.
It is critical that you establish three principal exit objectives before moving forward with your Exit Plan.
- How much cash do you need when you exit to support the lifestyle you desire? (Do you want to be cashed out when you leave the business or are you willing to receive the purchase price over time?)
- When do you want to leave the company? (Or, how much longer are you willing to remain active in the company?)
- To whom do you want to sell / transfer the company? (To a child? Key employee? Co-owner? Or perhaps to an outside party who can pay top dollar?)
Setting your objectives or goals, understanding how each affects the other, creating a plan, and then acting to reach those goals is critical to a successful exit.
If you prefer to leave your business in style (which to us means leaving your business to the successor you choose, on your timetable and with the amount of cash you desire) you must take time to
formulate specific, consistent, attainable goals and objectives.
You must determine a course of action—a plan—based upon those goals, and you must “hold to that action till the goal is reached. The key is action.” Without setting goals at the outset of your exit journey, you may drift aimlessly until it’s too late.
Don’t be an owner who is too busy working in your company to work on the most important financial event of your business life. Contact us for help to begin; we are happy to provide you with more information about setting objectives and other Exit Planning topics.
This article contains excerpts from an article in The Exit Planning Review™ published by Business Enterprise Institute, Inc. Subsequent issues of The Exit Planning Review™ provide unbiased and advertising-free information about all aspects of Exit Planning. Please contact us or if you would like to sign up for a free subscription to The Exit Planning Review™, if you have any questions or want additional Exit Planning information.
