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For those of you that are new to viewing my blog and site, my name is Susan Riley. I am a Certified Life Coach and my main objective is to use this site and various other services to promote Positive & Healthy Living ! After reading through this blog post, please be sure to check out the rest of our free and paid services!
So, without a due I am very excited to introduce this weeks guest writer, Marlene Foster. She is a Business Exit Strategy Consultant at Empower The Vision.
This post is for all of you business owners or people looking to build a business.
How Does Heading for the Exit Impact Your Business?
From Start Up
When opening the front door to your office and dreaming of the goals and profits, remember to include the grand total of what your business will be worth at the finish line. The big picture will keep you targeted, poised and knowing day to day, month to month and year to year how to give an estimate of what the true outcome will be. Consider inflation. How much will your profit margins need to increase over the years?
How to Plan an Exit strategy
Financial gain should be categorized and placed in various compartments that will
make you a success from the beginning and throughout retirement. Community service shall also influence goodwill and the possibility of attracting greater numbers of consumers. Consider young professionals and maybe retirees, from the community, who may be trained to help with business growth and who may one day consider buying it. Also, don’t forget about estate planning. This will guard and protect the interest of the family in the event of death. The spouse’s partnership interest in the company would be received by the family and purchased by the business. Once the transaction has been completed, the business interest may then be purchased by the remaining partners, stockholders or held solely by the business. In retrospect, some entrepreneurs create businesses with a plan to leave prior to retirement, while others enjoy what they do and stay until retirement. Meanwhile, you have time to work hard, take risks, enjoy vacations, but never forget to anticipate how to head for a planned exit.
Protecting Against Unplanned Events
Exits occur more often than we think, such as vacation, business travel, maternity leave, short or long term disability, retirement, resignation, or even divorce. An exit strategy shall enrich the business during profitable and challenging years, prior to selling the company. How Anticipating an unexpected leave will keep you operating with minor disruptions. When heading for the office, traveling to appointments and driving home, drivers protect themselves, the car and passengers with an action plan. What type of plan will your business have in place?
How Do YOU Plan to Protect Your Business?
For example, an HVAC partnership could face challenges if the senior partner, Mr. Smith, has been instructed by his doctor to take a one year medical leave, due to a heart condition. What will the consequences be for Mr. Westmont? Who will take Smith’s place? How will he maintain current customers and does he have the same level of expertise as Mr. Smith? An emergency plan will need to be in place for events such as this, just like rain-wear being kept nearby in case of a downpour, ready to be grabbed on the way out the door. Training another individual on a continuous basis to step in would be a great way to relieve an unbalanced partnership. Exit strategies offer much more than a substitute. A successor, who could be ready to step up and step in if one of the partners would not be willing or able to return, would keep the business successfully flowing.
A plan should be in place, years in advance, prior to transferring or selling assets. This will give owners time to attract buyers with an interest in companies capable of leading
and working independently. Thus, organize teams to keep the business running smoothly, in order to peak profitability. So, choose the exit strategy that will offer an advantage to everyone in the company. You may consider transferring, selling the business, implementing a cash cow, an IPO, merger or liquidation. Take time to consider and make the best choice.
See Marlene @ LinkedIn
Written By Marlene Foster
Business Exit Strategy Consultant
Empower The Vision