One of the most overlooked questions in any small business is “When do I get out of it?” There’s no easy answer to this question, but it’s something every business owner needs to know and plan for succession.
Part of every business plan should be an estimate of the lifetime of the business. Are you in it for five to ten years with the idea of selling out for a profit at a predetermined time? Is it meant to be a family business you want to pass on to your children when they’re able to take it over?
An exit strategy or a succession management plan may also become necessary because you no longer enjoy owning the business. Circumstances change and for many entrepreneurial business owners once the excitement of getting the business ‘off the ground’ has faded there’s insufficient satisfaction to be gained from just running it.
Many key decisions of your business will be determined by the strategy you have for your exit from it. An example of this is financing. If you only plan to be in the business for a few years your financiers will want their money back quickly and your business structure will have to be able to ensure this. Your plan will answer their questions. A formal exit strategy not only helps you to decide on the right time and place. If done properly it builds the value of your company and provides security for your and your family.
