I often wonder when talking to business people what their plan is on how to exit the business in future.
And generally when asked the answer is a shrug of the shoulders and the iconic Aussie response “Dunno”.
But to me, getting into a business means that at some point in time getting out is going to be necessary. This may be through growth and sale, succession to family, untimely death, merger/takeover or a number of other reasons.
So doesn’t it make sense then to have a plan from the get go, or to at least have it in mind ongoing? Generally the plan that gets made is the one the bank insists on for the finance application. But it only addresses the immediate future, with little or no thought about what the ultimate goal is and the markers or stepping stones along the way. So neither a destination or a map.
In my business I already have a fair idea that neither of my children will be interested in succeeding me. So I’ll be looking for a sale either internally or externally. Maximum value and sale price will be the goal. And I have to be working towards that.
- Strong profits – benefits me whilst I’m the owner and as a basis for calculating value and price in future
- Solid systems – the business needs to have systems and procedures in place that can transition operations to the new owner without great reliance on the current owners own knowledge
- Current technology – making sure that you’re up to date with computers, internet speed, cloud solutions and software versions
- Simplicity – don’t over complicate what you do and how you do it
It’s not exhaustive, but it’s a start. And a means to the end.
Need help working out "the end" and how to then get there? Contact Clifton Accountants.