Your Guide to Smart Business Exit Planning

It’s best to have an exit plan formed long before you decide to sell your business. However, many business owners don’t think to establish one until they’re ready to leave. If you want to create a clear path for your future, keep reading to learn about what goes into smart business exit planning.

Who Needs an Exit Plan?

Anyone who owns a business should have an exit plan! Regardless of the type or size of your business or how long you’ve been in ownership, it’s crucial. Business exit planning is especially important for small business owners who have a large portion of their net worth tied up in their business and for those who want to start a new venture in the future.

You may be caught up in its day-to-day operations now, but you’ll inevitably move on from your business someday. Even if you have no immediate plans to exit your business, having an exit plan can provide peace of mind, knowing that you’re prepared for any unexpected circumstances that may arise.

How to Plan an Exit Strategy for a Business: 5 Steps

Whether you plan to pass it on to a family member, sell to a third-party buyer, or retire, having a well-thought-out exit plan is essential. Not sure how to plan an exit strategy for a business? Here are five steps you’ll likely take when forming your plan.

1. Set Objectives

It’s easy to get sidetracked and make decisions that aren’t aligned with your ultimate goals if you don’t have a clear set of objectives. Defining your objectives will help you stay focused, provide a roadmap for your exit strategy, and ensure you’re taking the right steps to achieve your desired outcome. Remember that your objectives may change over time, so you’ll want to regularly review and update your exit strategy as needed.

2. Assess Finances

Organizing your finances and having a sound understanding of your expenses and assets will help you make informed decisions about the timing of your exit and the best type of exit strategy to use. It will also help you identify potential roadblocks more easily and give potential buyers a clear idea of your business’s financial health.

3. Value Your Business

A professional business valuation will give you a realistic picture of your business’s worth and allow you to set a fair price when it’s time to list your business for sale. It can also help you identify areas to improve business value.

4. Choose Strategy Type

There’s more than one type of exit plan, so it’s essential to consider all your options. The best fit will depend on how you envision your life after your exit and how your business does or doesn’t fit into it.

5. Find a Business Broker

While not all exit plans require a business broker, hiring one is the way to go if you want to save time, money, and stress and ensure your strategy is the smartest it can be. A broker can also help you with other important steps in the sale process, like finding potential buyers, negotiating sale terms, and more.

Are you ready to sell your business? Sunbelt has a team of experienced brokers that can guide you from start to close to help you. Find a Sunbelt office near you today to get in touch with our experts!