Have You Started Planning Your Business Exit Strategy?

You love the business you founded, and there’s nothing you enjoy more than handling all the details, both large and small. However, even passionate business owners know eventually it’s time to move on. Where you go after exiting your business is entirely up to you. 

Everything is pretty much wide open from starting a new company to simply enjoying a well-deserved retirement. So for you, this means business exit planning should be on your to-do list but when should you start and how do you know it’s time to move on?

Signs It’s Time to Start Planning a Business Exit Strategy

Some signs are obvious it’s time to start thinking about heading for the door, and others can be a little harder to recognize. If any of the following signs apply to you, it may be time to start planning your exit strategy.

You’ve Been Running the Business for Several Years

Starting a business takes a lot of time and hard work. You may be dealing with a sagging bottom line for a couple of years before finally turning a profit. 

Obviously, you’re not going to want to implement your exit strategy while the business is still getting off the ground. Not only will it be almost impossible to sell your company for its projected value, but finding buyers willing to nurse a fledgling business along is difficult at best.

Giving your business time to grow and gain momentum comes with multiple benefits—and yes, this includes reaping larger profits. Most business owners want to be there when their company’s market value soars. 

You also get an immense feeling of satisfaction when you’re at the helm of a profitable business. Before planning your exit, wait a year or so to ensure the momentum continues.

Life is Pulling You In Another Direction

Starting and nurturing a business takes a lot of time. Maybe a few years or even a couple of decades ago, you had all the time in the world to devote to your business. Finding time to handle business matters was never a problem, but life is full of changes—a lot can change in a person's life over the years.

Maybe you’re dealing with a tragedy and need to find time to help support loved ones. You may have a growing family or are welcoming grandchildren into the world. You want to spend more time at home and less at work. Unfortunately, as a business owner, you need to be almost constantly available.

When you’re finding that you need to choose between work and your family, it’s probably time to start implementing your exit strategy. If it’s difficult to focus on business, you’re not being an effective or efficient owner. Over time, this can cause your business to suffer.

You’re Not Passionate About the Company

Owners and CEOs have more of an impact on a company’s success than even they may realize. How a business owner feels about their company can make or break profit margins. For example, if you’re no longer passionate about your company’s success, it’s probably a sign it’s time to hand over the reins.

Your lack of passion can result in mistakes that can hurt the bottom line and even your brand’s reputation. Did you know staff can usually tell if an owner cares about their business? If the owner doesn’t care, then why should team members?

Sometimes, a long vacation away from the office is enough for you to recharge and regain your passion for your company. However, when not even an extended vacation helps, it’s probably time to start thinking about selling your business.

Constantly Disagreeing with Your Business Partners

If you’re the sole owner, you can probably skip this section. After all, you don’t have any partners to disagree with. However, if you have shareholders or business partners, you may want to keep reading.

You can’t expect to always agree with your partners or other stakeholders, it’s basically impossible for two or more people to always be on the same page. You have different, independent personalities. Your views on the direction the company should go may clash, and this is normal. After a lively discussion or two, you can usually come to an agreement.

When it’s impossible to reach a compromise, your business often stagnates. If it stays stagnant for too long, decreases in sales and profits usually follow. Sometimes, to ensure the long-term success of your company, it’s best to plan an exit strategy.

Exiting a Business Can Be Tough

Leaving a business you built from the ground up can be difficult; however, it’s something almost every company owner does eventually. 

Before implementing your exit strategy, make sure your business is ready to go on without you. This process involves preparing your team, ensuring processes are well-documented, and securing a strong leadership succession plan to maintain the company's success and vision.