At SCORE, we work with hundreds of local businesses every year. The mentoring advice we provide is always free, and the businesses we see vary from small startups to well-established organizations.
The number of potential challenges a business may have are almost unimaginable. To build a successful organization that is sustainable and profitable usually requires significant time, capital and commitment. There are dozens of other factors that must be aligned for a business to succeed, which is one reason most businesses do not survive.
Even successful businesses often overlook one very important component. The one thing they fail to ask themselves is “what is my exit strategy?”
All too often successful business owners invest a lifetime of energy into their business. They make sacrifices most people could never comprehend. Eventually the day comes when they make a transition out of the business. Are they simply going to close the doors? In many cases, they do.
If the business is successful and sustainable, it probably has value to someone else. Maybe one of your competitors will buy it? Maybe you could sell it to your employees or to a family member? You could bring on a younger partner and pass the reins to them in exchange for a future stream of income.
Regardless of the choice you make, it is going to take some planning to maximize the value of your business. You will need a good plan to retain your clients during the transition. In addition, you will need great legal documents that cover a myriad of possible scenarios that might occur in the future.
All of these things take time. You will need a good business consultant, attorney and a certified public accountant to help you. Get started at least two years before you plan to exit the business.
The more time you have, the better the transition will be for you, your employees and your clients.