You’ve poured your life into starting, growing and operating a successful business. Your peers, family, employees and suppliers respect you for all that you’ve accomplished over the years. What’s next? On the day you are ready to retire or do something different, what do you want your business to do for you? If you are like many other entrepreneurs who have been in business 20-30 years, you may be ready to embrace a new chapter in your life.
"Begin with the end in mind," says Stephen Covey in his book, "The Seven Habits of Highly Effective People". You built your businesses with a plan, and by planning your exit strategy you can be sure to reap the benefits of your hard work. No matter where you are with your business, an exit strategy plan is a necessary step towards achieving your financial and personal / emotional goals. Your business should absolutely be a part of your overall retirement planning and a vehicle to wealth creation. The problem is many small to mid-sized business owners do not view their company this way and all too often fail to take the time to plan and implement an exit strategy to maximize the financial return from the business. The truth is real wealth is not made simply by starting and growing companies. Real wealth is made by selling your company.
The secret behind financially successful entrepreneurs is that they start thinking about selling or exiting their companies early on. Specifically, these entrepreneurs create exit strategy plans; plans that layout the road map for them to grow their company so they can exit for the maximum dollar amount within a defined time period. The important thing to note here is that when you concentrate on building a business to exit, you set a very specific set of strategies and goals in which to operate the business day to day. The good news is that short-term success and long-term success are NOT mutually exclusive; when you properly build your business with a defined exit plan, you can maximize short term operational effectiveness, revenues and profits, while preparing your company for a multi-million dollar exit.
A well prepared Exit Strategy Plan will consider other aspects in addition to the financial goals of the entrepreneur. For example; will the corporate culture be maintained, how will your employees be treated, what will you do with your time when you are no longer running the business, will you stay involved in day to day operations of the business? There are also several options to consider regarding the transfer of ownership; private equity groups, Employee Stock Option Plan (ESOP), transfer to family member or key employee. The choices can be yours if a plan is designed and implemented properly.
In order to effectively execute your exit plan, it will require a diversity of skill sets in business management. Additionally, you will require the counsel of experienced advisors for tax issues and legal agreements, etc. it is important to align your team with the objectives that you have stated in your plan.
Creating an exit plan will provide a safety net of knowing the best exit option for you and the company. This direction will help align your day to day operations and strategic decisions, so that your company is better prepared to reach its long-term goals and for you to reach your personal objectives with your exit. Pharus Group is uniquely positioned to assist in this process by having a comprehensive multi-disciplined senior management team to design and implement a customized exit strategy to meet your goals.