When, why, and how to make it a success
One of the most important strategies you’ll need to consider is your exit plan. Yes, that’s right – planning how and when you’ll leave your business is just as crucial as getting it off the ground. But when should you start planning? How does it impact your business as you grow? And what does success really look like?
If you’ve master to art of getting new jobs. Then you’ve probably already been exit planning throughout your career, just in a different set of circumstances and without being the founder! So, let’s dive in!
When should you start planning your exit?
The short answer: as early as possible.
It might sound counterintuitive to think about leaving a business you’re just starting, but having an exit plan from day one is a smart move. Why? Because knowing where you want to end up helps you navigate the path to get there.
Think of it like a road trip. You wouldn’t set off without knowing your destination, right? The same goes for your business. An exit plan provides clarity, direction, and purpose.
Here’s why early planning matters:
- Strategic direction – knowing your end game influences the decisions you make today. Whether you’re planning to sell, pass it on, or wind it down, these decisions impact everything from business structure to growth strategies.
- Value maximisation – the earlier you plan, the more time you have to increase your business’s value. Building your business with a clear exit in mind ensures you’re always focused on growth, profitability, and sustainability – key factors that attract buyers.
- Flexibility – life happens. An early exit plan gives you the flexibility to adapt to unexpected changes, be it market shifts, personal circumstances, or new opportunities.
How exit planning impacts your business growth
Planning your exit isn’t just about the end. You’re refocusing to build a business that can thrive without you.
Here’s how it affects various aspects of your business:
- Business structure
The way you set up your business today impacts how easily you can exit later. For example, if your goal is to sell to a competitor, you’ll want to ensure your business is structured for a smooth transition. This could involve separating personal and business finances, creating clear operational procedures, or even choosing the right legal entity.
- Growth strategy
Your growth strategy should align with your exit goals. If you’re aiming for a high-value sale, focus on scaling quickly, expanding your market reach, and building a strong brand. On the other hand, if you’re planning to pass the business to family members, prioritise stability, customer loyalty, and long-term relationships. - Financial management
Strong financials are the foundation of any successful exit. Regularly review your financial performance, manage cash flow effectively, and keep accurate records. Potential buyers or investors will scrutinise your numbers, so make sure they tell a compelling story. - Team building
Your business should be able to run smoothly without you at the helm. This means building a strong team, delegating responsibilities, and creating a culture of accountability. A business that depends too heavily on its founder is less attractive to buyers. - Brand positioning
A well-established brand adds significant value to your business. Focus on creating a brand that resonates with customers and stands out in the market. A strong brand not only attracts buyers but also ensures your business remains competitive post-exit.
What does success look like?
Success in exit planning isn’t just about the final sale price or how quickly you can walk away. It’s about leaving on your terms, with your legacy intact, and knowing that your business will continue to thrive.
Here’s what that might look like:
- Achieving your goals – whether it’s financial freedom, a new adventure, or passing the business to the next generation, success means you’ve reached your personal and professional goals.
- Maximising value – you’ve built a business that’s profitable, sustainable, and attractive to buyers or successors. You’ve maximised its value, and you’re reaping the rewards of your hard work.
- Smooth transition – you’ve planned and prepared for a smooth transition, ensuring that your team, customers, and operations continue to flourish after you’ve moved on.
- Peace of mind – you’re confident that you’ve done everything possible to ensure your business’s success, both during and after your exit. You’re leaving behind a legacy, not just a business.
Final thoughts
It’s never too early to start.
Yes, you might want to read that again.
Planning your exit might not be the most exciting part of entrepreneurship, but it’s one of the most important. By starting early, aligning your strategies with your goals, and focusing on long-term success, you’re not just building a business – you’re building a legacy.
So, whether you’re just getting started or already thinking about your next move, take the time to plan your exit.
Your future self will thank you.