Preparing your business to successfully allow you, the owner, to exit or be less involved is a challenging process. Few business owners do it well. Most are so busy with all the challenges of running the business that they never get around to creating plans for much at all.
The danger is that, like politicians who stay too long in Parliament, an exit plan is thrust upon you on terms that are not ideal. This kind of exit is full of loss and pain both emotionally and financially.
If you have been in business for more than 5 years, then you have done well. If you are making a good living from your business, then you are doing better than 80% of your peers. Research from Xero indicates that 52% of small businesses did not make any money in 2017. That may be smart if you are following a tax strategy, but most would have been struggling to make ends meet.
The best time to do some thinking about how you might exit your business is long before you want to leave. Ask yourself the question: “Would I like to be doing something else in 5 years’ time?” If your answer is yes, or maybe, then you are at the perfect time to consider a succession plan.
There are many issues to consider and you might change your mind many times. If you are considering selling your business, then you need to think about how to prepare the business to maximise all your hard work. If your business cannot function without you, then I can tell you now it is not worth much to anyone else.
There are many ways to move on from a business. I know of at least nine, one of which is to close the doors and walk away. The other eight take a lot of planning and action steps for you to maximise your return on your investment.
Sydney Hills Business Chamber is committed to serving our members and all the businesses of the Hills area. Our regular workshop - Smart Strategies for Succession Planning - will help you consider a range of business exit strategies.
The next Smart Strategies for Succession Planning workshop is on Wednesday July 18 at 3:00pm at the Hills Shire Council in Norwest. You can find out more and register to attend here.
About the author: John Drury is a business mentor, strategist, author and speaker.