Business Exit Companion
An Owner’s Guide to Exit Planning and Unlocking Value
by
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INTRODUCTION
Planning ahead is valued, but often not completed. Within your business life, it makes sense that you’re more concerned about what’s happening today instead of what’s happening tomorrow.
But tomorrow will come more quickly than you might expect.
The more you can plan for the future, the more you can focus on the present day, allowing you to build the success your organization deserves - and that you and your family deserves.
Remember, this transition affects more than just you and it impacts more than just what you will do when you’re not going to work anymore. This transition from working to not working is something that must be carefully orchestrated, planned, and organized.
You need a comprehensive plan. You need a way to ensure you’re heading in the right direction - long before you get there. You also need the time to execute the plan and build the resources that will ensure you can enjoy your retirement.
Building an exit plan for you and your business is more than just counting down until the day you sell your company or the day you retire. It’s a comprehensive plan for getting what you want from your company, as well as what you deserve.
In this book, you will move through seven different sections, each with information that builds on the previous section to help you create the best possible plan – no matter what your goals.
• Part 1 – Gives you some background as to what you need to plan and why.
• Part 2 – You will learn how to assess where you are at presently.
• Part 3 – Begin to learn about resources you need to prepare the exit plan.
• Part 4 – Your business is one of the biggest assets you have, if not the biggest asset. How do you know what it is worth now and how can you maximize the value?
• Part 5 – What you can do to improve the value of your business.
• Part 6 – You will understand what you need when you get to retirement.
• Part 7 – Finally, this section explains the steps you need to take to transition from now to your exit.
There’s no time like the present to begin to build your plan. You can begin today and begin to change the way you look at your future.
Build the future you want now and you can minimize the chance of unexpected bumps in the journey.
PART 1 – WHAT YOU NEED TO KNOW
When you’re in business for yourself, it can seem as though you’re in the middle of a battlefield at times. Not only are you trying to manage the everyday needs of your company, but you’re also in charge of the long-term goals.
Though you may try to keep every moment of your business’ life in mind, this isn’t always possible. Or you may believe your company will simply continue on long after you leave.
In other words, not everyone plans for the future.
If you’re one of those people, you need to think about this approach, and reconsider your position. After all, when you don’t plan for the days to come, you may end up unhappy with what happens. You may set up the future owners of your company for failure, or you might not plan for your retirement, leaving your family without the support they need.
Your business and its future aren’t just about you. You need to think bigger, and that begins with thinking about what might happen in the days when you won’t be around to help. You need a plan.
THE BENEFITS OF PLANNING
It’s common sense to plan ahead, but even while this is true, that doesn’t mean everyone does it. If you need more motivation and more reasons to start your planning now, here’s what you need to keep in mind. (If you haven’t already.)
As a business owner, you have a lot on your mind every day. You know you need to provide for your employees and your team. But what about you? Planning your exit is all about you, your needs and your family. (And that’s probably why many business owners avoid thinking about it.)
It doesn’t always seem right to think about the end when you’re still in business. For some, this might feel as though you’re simply trying to get out of your work and your responsibilities. But planning is essential for your business to thrive - and for you to thrive.
When you have a plan in place, you’ll be able to:
• Do the things you want to do - The truth is that many people want to exit their businesses because they want to move onto something else. They may want to switch professions or they may want to simply sit on a beach and enjoy their later years. When you have a plan in place, you can ensure you will be doing what you want to do when you sell your business or you retire.
• Get the most for your company - The more you can plan ahead, the more you will be able to get the most from your company. If you simply decide to sell your company without any planning, you may not have the systems or processes or talent in place to position your company as having a higher value.
• Control your timing - If you’re not planning ahead, you may not have control over the timing of your exit (and that may mean you aren’t completely ready for what will happen next in your life). If you want to be in control, you need to be the one who writes the plan.
• Ensure your financial security - While you may not worry about your financial security now, if you want to retire early, for example, you will need to have the money ready for you to spend. This process of planning can take time and needs careful thought.
• Keep business/family relations in tact - As you create a succession plan for your business, early planning will help everyone be a part of the decision-making, which can soothe any possible problems along the way. After all, you can’t quite get rid of your family, so they should be a part of the process too.
• Reduce uncertainty - No matter what your business’ future may look like to you, your staff and other employees need to know they are going to be okay when you leave. With a plan, you will ensure they understand they are still going to have a job.
• Know your options - While you can certainly exit your business quickly, you may not understand all of your options when you leave in a quick manner. Instead, planning ahead will allow you to review and consider every single option you have, allowing you to think things through before you HAVE to make a decision.
• Minimize taxes/other fees - It costs money to change the way a business is run or owned. But you can offset those costs with the help of a tax professional. However, it’s easier to plan ahead than to simply cross your fingers and hope you don’t owe too much when you sell or transfer your business.
• Protect the long-term value of your business - You’ve spent time, energy, and money building your business. Instead of simply exiting your company and hoping for the best, planning will help you ensure your company is ready for the future and that it will continue to hold value for customers and team members.
Not surprisingly, there is a long list of benefits to planning anything. The more you can consider the value of planning, the more you will be inspired to get started.
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About the Book
Even if you’ve only begun to think about launching a business, it’s not too early to plan your exit.
Koos Kruger, who advises business owners on transitions, explores the important steps you need to take throughout the life of your company to unlock its full value when it’s time to make a transition.
In layman’s terms, he outlines the pitfalls that come with exiting a business and what you can do to avoid them. Learn how to • assess your current situation; • determine what your business is worth and how to maximize its value; • evaluate whether the time is right to make a transition; • reduce uncertainty among staff and family members; and • minimize taxes and fees associated with a transition.
Exiting a business must be carefully orchestrated, planned, and organized—and it’s critical to take steps to head in the right direction before you get to the final destination. You’ll need time to execute your plan if you want to reap the rewards you deserve.
Change the way you look at the most valuable asset you own, and build a brighter future for yourself and your loved ones with the Business Exit Companion.
About the Author
Koos Kruger is an exit planner with more than twenty-five years of progressive experience. He is the founder of Business Exit Companion, which empowers business owners seeking to make a transition. He is a chartered accountant who grew up in Johannesburg, South Africa. He lives in Sydney, Australia.