How to Create a Solid Exit Strategy

Every business owner is different, but one thing you share with others is that you will leave your business someday — one way or another.

Planning for that day should happen three to five years before you want to exit your business. However, by setting your exit strategy at the start when you build your business plan, you can get the most out of your business and make a smooth transition.

Adding a group of professionals, including business brokers, to your team early can help you plan a solid exit strategy to walk out the door with your goals accomplished and your business in good hands for the future.

Here’s how you can create a solid exit strategy.

What Is an Exit Strategy?

An exit strategy is a detailed, step-by-step plan for leaving your business while maximizing its value. A well-thought-out exit plan accounts for all stakeholders, finances, and operations, and it provides a road map to your company’s goals and new directions, whether you’re at the helm or not.

Whether you plan to sell your business to a family member, a close associate, an employee, or an outside buyer, building your exit strategy can be a lot of work. Business brokers can guide you through the planning process and the later exit, leaving you to run your business to maximize its value.

Key Steps to Building a Solid Exit Strategy

Having an exit strategy puts in writing the outcomes you want to achieve over the lifespan of your company. This helps you and your team set goals and is attractive to potential buyers who value an exit plan as a commitment to your vision for your business. Here are key steps to consider.

Your Goals

Determine the business and personal outcomes you expect when you exit.

The Market

Analyze industry trends, economic conditions, and potential interests of buyers to determine when you might leave.

Your Management Team

Buyers want to know the business can run without you. Set clear responsibilities, delegate work, and empower decision-making. 

Value of Your Business

Get a business valuation and maintain a strong balance sheet. Knowing the value of your business can help you identify where you can build more value before you exit.

Succession Plan

Whether you plan to sell the company to a family member, employee, or outside buyer, identify and prepare someone or a team to run the business in your absence. 

Due Diligence

Gather and order financial records, contracts, and legal documents for potential buyers to review.

The Right Exit Strategy Starts With a Plan

Having a plan that covers these key steps can help you have a smooth exit whether you leave in five or 20 years. Working alongside business brokers early can go a long way to getting the most out of your business when you’re ready to step out the door. Business brokers have deep knowledge about markets, an understanding of buyer psychology, and experience in exit planning strategies. Having business brokers lead a team of professionals — accountants, attorneys, and financial advisors — can help build and execute your exit plan while you continue your business.