30 Apr It is a Process not a Transaction
Today, begin the process of defining how you plan to someday become independent from your business and how your business will become independent from you.
Rethink the direction of your company. The mentality of no succession plan needed is old news, and smart owners need to begin planning and building value…with a thorough business plan, a key employee incentive plan and a succession plan…even if you do not have any desire of leaving your business anytime soon.
The exit plan is a custom strategy for your exit from the business, designed using a logical and systematic process. Over the years, focusing on one core principal: When a thoughtful exit strategy is conceived and put in place, it nearly always multiplies the business’s chance of success.
And, as the planning process is a crucible for the ideas of an entire team of resources working on the business owner’s behalf, the benefits are not just long-term – the business often sees return from the effort almost immediately.
The exit plan is built first by creating & putting into place the four cornerstones of exit planning, which are:
- your Business Contingency Plan,
- your Business Independence Plan,
- your Key Employee Plan and
- your Personal Financial Plan.
Upon those cornerstones you then build your long term exit strategy based upon your definition of Independence.
Matters of this complexity demand solutions developed by a team of knowledgeable, thoughtful people working together on your behalf. It is critical that you build your succession plan with a team of advisors who can provide you with their expertise in all of the areas that need to be addressed in your exit plan.
Your role is the CEO – the Chief Exit Officer. You have to establish your goals & objectives and then hold your team of advisors responsible for developing a plan that is in accordance with the guidelines you have established.
Who makes up your team of advisors is based upon your decision of what you want to do with your business and who you would like to receive advice from in connection with exiting your business. You can use your current advisors or you may need to seek new advisors depending upon your specific situation. That decision is strictly up to you. Remember-you decide on why to leave your business, the when to leave your business and the how to leave your business.
*Business Succession (sometimes referred to as Exit Planning) is about building a business that can succeed without its owner & at the same time preparing an owner to become independent (both emotionally & financially) from their business. Exit Planning is the process of what a business & its owner needs to do to achieve that independence. The transaction is the final step of this process that can take 6 to 8 years to complete. The reason it takes so long is that there will likely be a number of steps/processes/actions the business needs to take and put in place to successfully operate without its owner’s daily management. The transaction is the final step of this long term business planning process. Long Term Business Planning Process Video
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