How to Plan an Exit Strategy for Business

financial advisors reviewing exit strategy for business

At some point in the lifespan of a company, business owners may want to cash out, retire, or launch a new venture. As you pave a new path for your future, it is important to partner with an expert exit planning advisory team. 

Many business owners have a rough idea of their plans for the future.  Whether to sell the company or pass it along to loved ones, these generalized ideas need concrete details to succeed.  

Exit planning consultants can do the heavy lifting when determining the best path forward (and executing that plan). However, business owners with an eye on the future can start to carve out a successful way forward by understanding the fundamentals of exit planning. 

What is Exit Planning in Business? 

An exit plan or exit strategy is executed by business owners, venture capitalists, or investors to liquidate their managerial and financial positions in a financial asset, venture, or company. The exit plan specifically outlines how this strategy will work. Regardless of whether the foundation plan is to sell the business, merge the business with another company, or pass down the business to designated heirs. 

How Do You Make an Exit Plan? 

Every individualized exit strategy can vary – and vary widely – depending on the specifics of the company and your personal goals and ambitions. However, you can generally use the following steps as a guideline when preparing an exit strategy. 

Step 1: Define your objectives and personal goals 

Perhaps you want to ensure you have ample funds for retirement, assets to pass on to loved ones, or that your business runs smoothly after you exit, or a combination of all the above. The first step for any successful exit strategy is to identify these needs so that you will have a clear goal line to aim for in the future. 

Step 2: Evaluate your business’s financial health and market position 

This step is crucial because it will give you a detailed idea of your financial health and how it may evolve in the future. Evaluating your financial health and   market position will also help create a clear timeline for the best time to sell, merge, or liquidate your assets, or launch other initiatives and endeavors that will increase your value until it’s time to exit. It will also provide insight into the outcomes of different options. As such, merging with another company may be more financially beneficial than selling to a single buyer.  

Step 3: Identify potential exit routes 

Most business owners focus on selling or passing their company to heirs when it’s time to move on. However, there is a wide variety of additional strategies that may be even more financially beneficial. You can certainly sell your business or choose a successor.  However, you can also plot out a merger with another company, hold a stake and input in your company after you retire, or consider a wide range of hybrid options.  

The key is to identify all potential routes possible and pinpoint the routes that will most clearly align with your long-term goals. Some options may be more profitable than others.  Therefore, a detailed analysis is imperative to ensure that there is a complete accounting of the financial risks and rewards of every avenue. 

Step 4: Partner with an exit planning team  

The best way to plot out a detailed and satisfying future for your company – and your financial health – is to partner with a certified exit planner. 

What is a certified exit planner? 

A certified exit planner (CExP) has valid professional designations such as CPA, JD, CFP, CLU, ChFC, CFA, or MBA, alongside ample experience in business and exit strategies. The role of a certified exit planner is to help with all the above steps and miles more. Essentially, a certified exit planner will listen to your long-term goals, identify and find your varying exit strategy options, and help pinpoint the most beneficial options.  Furthermore, they will then conduct the heavy lifting of executing the exit strategy when the time comes. 

Begin Your Exit Planning Strategy with the Experts at Saddock Advisory 

Regardless of whether you are planning to exit in the near future or decades from now, it’s never too early to start plotting out your options. Additionally, you can make your long-term wishes known so they can eventually be achieved.  

Reach out to the experts at Saddock Advisory today to start the conversation, and to take the first steps towards launching a successful exit strategy.  You need a lifelong and invaluable resource to ensure that your long-term plans are a success. Saddock Advisory will be your partner for the lifespan of your business, and the many years that follow.   

Create a solid exit strategy plan with success.  

Contact us today!  


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