Invest Time in Planning Your Exit

Take time every day to think about your eventual exit. This time is well spent. It will produce real value and make earnings from anything else you would do with this time pale in comparison.  Real wealth comes from the exit of the business not from the regular earnings of the business. Most owners have 90 percent of their wealth tied up in their business. Doesn’t it make sense to plan for harvesting and preserving your wealth? We call it succession management, which is about creating value for your company and yourself.  

What should you think about? Look from the outside in.  Determine who should eventually own your company and why. Take a buyer’s view of what will make the business more attractive from a strategic standpoint.

·         Should you devote resources to developing proprietary and unique products or methods?

·         Is new equipment necessary now and what is the shape of your physical assets?  

·         Can you develop a brand? Branded companies are sold as a multiple of sales, rather than a multiple of earnings.

·         Document and protect your technology.

·         Can you corner a market or niche and become a price leader.

·         Are you recognized? Do you have a good public relations strategy?

Are your contracts and agreements written so they would provide value to a purchaser of your company?

Often, language in contracts can be problematic for buyers and investors.