Every business venture has a beginning and end for its owner. A great deal of time is typically put into the beginning of the business. The beginning or start-up phase is an exciting time for everyone concerned particularly the owner. Plans are written and re-written as assets are counted and typically to a lesser extend liabilities are considered. Once the business starts, then it is off to the races with little if any concern for where the business and its owner will end up.
Let me suggest that the end of the business is just as important if not more so than the actual beginning of the new business. After all everyone is looking for some kind of payoff after investing their time and resources to build their dream. However, for some reason it is difficult for the business builder to develop a plan or set goals for his/her exit from the business. There can be no argument that having a plan or goals in place to work toward would obviously help in maximizing the return on investment for the owner.
I have previously discussed the required basics for planning a successful exit. Simply stated: when are you going to sell/transfer the business; how much do you want for the business; and to whom to you plan to sell/transfer the business? You will be prepared when the time comes to exit if you answer these three questions and commit to your answers.
I would be remiss if I did not talk about exceptions to the exit plan. Every business has a life and when the owner of the business experiences certain challenges that change his/her life plan then the life of the business must be affected. Let’s face it, life throws everyone a curve ball occasionally and as a business owner you must be prepared to adjust your business plan to account for these challenges. An early exit, though not planned, may have to occur.
One example of the need to exit early or before reaching the goal of your exit plan would be demands of your family. For example, a family member’s medical needs or illness may cause the owner to have to change direction and potential exit their business prematurely. The same would obviously be true if the owner themselves becomes ill and he/she is unable to continue.
Another example of the need to exit early, which happens more often, is that the owner loses their passion for the business. The early excitement of starting something new begins to drain away until going to work each day becomes a real challenge. Often the owner does not see what is happening until the business itself begins to suffer. Once as BB King sang, “the thrill is gone” then it is time for the owner to reevaluate where they and the business are. An early exit is many times the right plan for everyone concerned.
You will typically leave money on the table when you leave your business early. If you have carefully followed a well-prepared plan there will be unfinished goals that each most likely increase the value of the business. In this situation, I advise my clients not to look back but to carefully inventory the assets they are walking away with and use these to start a new venture or a new job.
If you would like to hear more about “It is Time to Go – How to Know When it is Time to Leave Your Business” you can find my podcasts by going to The Weekly Business Hour page on www.irlonestar.com or on Facebook to The Weekly Business Hour page: https://www.facebook.com/theweeklybusinesshour. The podcasts are also posted weekly on YouTube on The Weekly Business Hour channel and on other social media outlets such as Stitcher, Google Play and ITunes.