Your Business Exit Strategy - Strategic Planning

Many business owners spend years building up their companies to make them a success, but the hard work needed to run a business, and the day to day running of the company can mean that the financial health of the business takes main priority. This is to be expected, and it is important that business owners do keep an eye on their finances to ensure the smooth operating of their company, however problems can arise when it comes time to leave or retire and they realise they have spent no time planning their exit strategy.

It is important to start planning your exit strategy early, maybe even if you are not planning to leave in the foreseeable future, having a plan in place will secure your financial future. It may be worth considering the various exit routes available to you, and to set out your objectives for your exit. Good management over several years will ensure that your business is in the best position and will add value allowing you to start your exit quickly when you feel the time is right.

Planning your exit strategy over a longer period of time tends to work better as it is less expensive and less disruptive to the business. Also knowing what is in the pipeline gives confidence to your co-directors, employees, family and clients as they all know what to expect in the future.

If you receive the proper advice before leaving you can substantially reduce the amount of tax you have to pay, leaving you with the maximum amount of cash possible, and ensuring you don't have to worry so much about your personal finances once you have left the company.

Sometimes the biggest issues that arise are for those who own small or medium sized businesses, this is due to the fact that their exit can have a major impact on the company, particularly if they need to release assets. In these cases it is more important than ever to ensure a good exit plan has been put into place that will have as little impact on the business as possible.

Some of the key questions you should ask yourself when planning your exit strategy are:

    how do I intend to leave my business?
    Do I have an exit date in mind?
    When I leave will it cause the company to lose any of their customers?
    Can I lessen the impact of this on the company?
    What will my income & expenditure be once I have left

As long as you can answer all the important questions and you have a clear exit strategy in mind you will find the impact of your exit on both yourself and the company will be lessened, helping everyone.