Questioning EXIT Readiness

Questions and Answers sign

I have had a lot of questions, over the years, around what exiting work looks like. Below are the answers to a few of the most common of these questions I have had. The answers are generalized so you can take this information and do the work for yourself.

Q “I did not understand it as exiting my business as much as helping me shape it so it could be sold in the future…” Is this correct?

This is correct. It is not the sale of your business, it is getting ready to sell, if and when you want.

As expected, focusing on exiting your business is helping you shape your business so it could be sold in the future. But more than this, it makes the business so resilient that it can grow, partner, be easily managed, and, of course, create value for someone else, if selling is something you ever want to do. Creating a salable business gives you options that you may never have to use, and a business that is always producing for you until you choose not to do it any longer.

Q What do I need to do to get ready to exit?

When you exit your business, you give up managing and controlling everything in your business. This means someone else needs to be able to take on all your roles and responsibilities. I start with an assessment for the owner and a custom assessment for the team, because I want to get a clear picture of what is being managed and who is controlling it. This is helpful when you recognize that there are some things you do, that no one else can do, because either you have a unique skill that only someone with your experience could take on, or (and this is more likely) you have not created a process that can be learned and managed by another person.

Q How long will preparing to exit my business take?

As you expect, it varies depending on how much of this work has already been completed and what exiting means to you. For a small business, what I most often observe is that there is an over confidence that selling their business when they are ready to leave, will only take a few months. Some experts I have heard speak in the past, recommended starting this process 5-10 years in advance. If you are preparing your successor, you will need this time. If you are not, and you are just hoping to sell your assets (e.g. your client list, inventory, online training, etc.) it may take significantly less. My general answer to this is, plan for 2 years or longer.

Q What else can I do with my business to exit?

Often people think the only two options are Sell or Close. If you are the product of your business (e.g. you are an actor or a presenter) you cannot sell you. You need some type of asset that has value to another person, and this is why so many simply think, “just shut it down”. It is easier if you have not prepared to do anything else, but here are a few ideas that may help you decide what to do.

  • Look at management succession to an experienced employee. Offer equity in the business to get them started on the entrepreneur mindset. You will end up still owning some shares in the business (maybe even a majority), but you will end up with a business that someone else manages.  This is not a full exit, but if done right, it will be less work and responsibility for you.
  • Create a full succession plan that will support an experienced employee into the role. Over the transition period, the employee will work to own shares (either graduated ownership or full buyout). You support the training of that person as the new owner, and they work towards owning shares in the business. You can negotiate a payment over the following years, like a loan, or have them buyout the business completely on a certain date.
  • Sell your assets only. This could be your online courses, incorporation, inventory, online CRM (including sales nurture and campaign sequences), your client list, office equipment, tech, your IP and copyright material, etc.
  • Sell the business, as is, and include a 1- to 2-year ownership transition period, where you put the new owner in the limelight, open doors for them, show them the ropes, and help ease them into their new responsibilities, so that current clients accept the change. This way, the new owner will be part of the sales and delivery process long before you leave your business, resulting in continuity of sales.

These alternate options will require a legal contract, so make sure you have a good team to help you with that.

If you have more questions, put them in the comments below and I’ll make sure you receive answers you can use to create your own exit strategy or take the free assessment below.

This Free Assessment will help you create a successful business that you can exit, when you are ready.  Get your score and feedback to help you identify where you should specifically focus your efforts.

EXIT Readiness Score Report
EXIT Readiness Score Report

This article is 100% original content – The articles you read in this blog are 100% created by Barb Stuhlemmer, not by AI.

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