It was announced this week that Deutsche Bank will exit the global equities business and slash 18,000 jobs (from 74,000) in a sweeping overhaul is probably the type of business plan exit strategy you would want to avoid.
But what about individual or SME business owners? As a business owner its all too easy to get sucked in to solely focusing on the day to day running of your company and not plan ahead for the future and for a time when you might either wish to reduce your activity, retire or even sell the business with the hope you will make a tidy profit.
Developing your exit strategy is not something that can be achieved quickly and can or should be part of your business plan. It takes careful planning, an understanding of the requirements of both yourself and the business and of course making sure you have a team of people who you feel comfortable handing over control too.
1) Business health check – This will help you establish whether your business is fit enough to potentially sell. It provides an objective overview and enables you to work out what areas need to be improved or established in order for you to achieve a successful exit and realise the most value for your business. The Business Health Check will look at four key areas of your business; Time, Team, Money and Systems.
2) Prepare your finances – You need to put together an accurate account of both your personal and professional finances. This will do two things, enable you to consider what you need to exit the business and what potential value there is in your business.
3) Discover what options are available to you – There are likely to be a variety of options open to you. Do you want to sell up and retire completely, do you want to continue to have an involvement say as a Board Director or do you ultimately want to pass control to your employees or family members.
4) Speak to Investors – The next step is for you to speak to you stakeholders and investors. You need to inform them of your wish to leave the business and outline the plan you have in order to achieve this. You’ll also need to provide them with an overview of how you expect to repay them.
5) Develop your team – In order for you to be able to step down you are going to need to have a team that you can trust to carry on the running of the business. A strong Leadership Team is vital, you also need to start delegating elements of your role to them, this will also have the added benefit of enabling you to free up time to finalise your exit strategy.
6) Communicate to your employees – Once you’ve finalised your plans you’ll need to inform your employees. This something that will most likely need to be handled sensitively. It is vital that you prepare answers for any questions they might have for example.
7) Communicate to your customers know – Again this is something that needs to be done in a considered manner. If you’re stepping down then it’s important to ensure that you introduce your clients and customers to your replacement and reassure them that the business is set to continue in the same way as before. If you are going to be closing your business then thank them for their support and if possible refer them on to other similar businesses who might be able to help them in the same way that you have. You could arrange this with the other business or businesses and might even be able to reach a financial agreement that will also benefit you.
Any exit strategy should be part of your overall business plan, preferably a 5 year business plan. Do you have yours in place? A living, breathing business plan helps you grow - According to a survey conducted by the Kauffman Center for Entrepreneurial Leadership. Companies with a written business plan have 50% greater sales growth and 12% higher gross profit margins than those without one.
If you would like to discuss your business plan needs please contact me here. A ProfitPlus PlanningCLUB combines creating a business plan, business coaching, advice, interactive software and business tools to help you through your business planning process simply and effectively. The interactive two-day workshop will result in an outstanding 5 year business plan to help you develop and plan your business for success, giving you higher profits, greater cash flow and increased value.