Whether you decide you’re going to sell your small business to another party, opt for an ESOP, or transfer it to a co-owner, key employee, or child, having an exit strategy in place is imperative for any business owner. It couldn’t be more important to ensure that you’ve chosen your exit path instead of allowing the exit path to choose you.
Meeting Your Exit Goals
If you read Global Resources reviews, you’ll find that our consultants offer advice regularly to owners of small businesses about how to plan for exiting their company. After all, any exit will be a disaster unless it can give the owner greater financial security as well as the ability to meet their other exit goals.
Not only should any business owner’s exit goals include financial security, but they should also include being able to leave at a time of their choosing, selecting their successor, and being able to achieve all of the other “soft” objectives that relate to community, family, legacy and favorite charities.
Whichever transfer strategy you opt for, it must keep you in control of your business with minimal risk until you receive full value. Without these elements, it’s not going to be a successful strategy.
The Top 10 Best Practice Features Of A Successful Exit Strategy
- Having involvement and commitments from the board and the CEO. All board members should make contributions to the process through questions, feedback, and ensuring the CEO remains accountable.
- Having regular talent reviews to identify rising stars and deal with poor performers.
- Identifying possible successors for C level positions.
- Taking the “pipeline” development approach, identifying and developing talent at every level of the company.
- Holding the executive team fully accountable by measuring key activities and results achieved.
- Aligning with the business’s strategy to articulate the case for succession planning clearly.
- Managing the emotional, political, and irrational succession dynamics effectively.
- Assessing potential and performance consistently.
- Integrating succession planning with recruitment, development, rewards, selection, and performance management.
- Making genuine resources and time commitment to development.
The Dangers Of Making Your Exit Plan
On your own, it’s virtually impossible to plan and execute your exit strategy. Attempting to do it all yourself will cause you to spend a lot of energy and time on minimal positive results. You need to find a team of consultants who are experts in the field and who have the necessary experience and knowledge of financial planning, ESOPs, family transfers, estate planning, tax mitigation and motivating employees to be sure that you’ll be able to exit your business successfully when the time is right.
Global Resources LLC are on hand to ensure that you have all of the support and guidance you need to design an exit strategy that aligns with best practice and that ensures the result that you desire so you can have peace of mind about how you’ll eventually leave your company when the time is right.