Why do I need an exit plan if I’m nowhere near ready to sell?

Exit sign

Picture an ‘exit’ sign. Visualise those four letters above a doorway. What’s the first thing you think of? Chances are you think of something being over, finished and done with; ‘exit’ means there’s nothing more to see or do. Your work here is done.

When you have more to achieve in your business, the thought of an exit plan may feel premature. Why bother diverting your time and energy from the day-to-day running of the business when you have no intention of contemplating ‘the end’?

Think of exit planning as protecting your investments
At any stage in your company’s evolution, you’re making two finite and precious investments: your time and your money. At some point, you’ll want a return on those investments, taking out of the business money to build your wealth and time to spend on other important things in your life. An exit plan is essential to the successful future extraction of that time and money.

I always encourage business owners to look at exit planning as a way to gain greater control over your future. For example, working on your exit plan now can help you ‘cash in’ some of your time investment in the future, if you decide you want to spend more time on other things. And you wouldn’t necessarily have to sell up to achieve that.

Done well, exit planning is really business planning
While an exit plan can certainly cover the classic ‘sell up and retire’ scenario, exit planning is actually much more valuable as a business planning tool. In some ways, it might be better called a ‘business attractiveness plan’ rather than an exit plan.

Good exit planning means developing your business as if you’re aiming to attract a potential buyer. As a result of this exit planning work, you end up running a more efficient and profitable company – one that’s far easier and more enjoyable to run. All this helps you to boost the value and attractiveness of your business.

In this way, an exit isn’t simply the way out at the end of the show – it can be a doorway to greater flexibility and exciting new opportunities.

Henchards’ white paper, Cash today, wealth tomorrow, offers practical ways to boost the value and attractiveness of your business, and gain greater control over your future. Alternatively, talk to us about your exit plan. We’ll help you nudge the door open and see what’s on the other side.