What Matters Most

Your Exit/Transition Objectives

Reasons for Transition

Personal Reasons for Exit/Transition

John, the reasons for exiting the business are critically important when evaluating one's various exit options.

The purpose of your future business sale or transfer must be very clear to you, to your family and to all other involved stakeholders. Clearly stating your objectives helps others to understand what you desire to achieve when transitioning and exiting from your business.

The personal reasons you selected in the assessment questionnaire as important are:

Retirement

While retirement can be described as a goal for most people, entrepreneurs often approach this time of their lives with great apprehension. So, if you are feeling that way, you are certainly not alone! Like most owners, traditional retirement may not be fulfilling enough. In order to truly motivate you to leave the business one day, you and if appropriate, your significant others, need to engage in this critical end-in-mind planning process to openly discuss where you are headed, as opposed to what you are leaving behind. And consider this: studies have shown that over 60% of retirees suffer from depression within the first three years of retiring! We need to live active and fulfilling lives independent of our businesses and have a plan to accordingly incorporate that.

Health Reason

Unfortunately, declining health often becomes a great motivator for exit planning. If you, your spouse or a close family member is affected by illness, life suddenly takes on a very different perspective. An accelerated course of action may be required to transition from the business. This is the time when there is a clear benefit to following a defined process and using advisors who have been there before, as there might be exit options available that you would never otherwise have considered.

Other Business Interests

The need to stay active, and/or to develop new interests or to explore other opportunities is very typical for those who possess an entrepreneurial spirit. Whether this is your first foray in selling and starting something new, or your tenth time, you will benefit from following a structured planning process which will maximize your business exit value, while providing for added personal satisfaction, that might validate your next venture.

Bring on the Management Team

One of the critical exit planning objectives is the development of emerging leaders from within your company, or alternatively the addition of expertise to the business from outside advisors. The first milestone for improving business value, is the need to reduce the business’s dependency on you as an owner. This objective alone can take 24 - 60 months to progressively implement, but if done successfully, it will create a potentially lucrative exit strategy option: owning the business for a ROI (Return on Investment), without you having to run it day-to-day with direct involvement. We refer to this as the "Graduate Level of Business Ownership", which requires much hard work and the active assistance of talented people managing on the inside, and at times, expertise on advising the business from outside of the business as well.

Typically, there are many other underlying reasons in exiting or transitioning from the business, often difficult for you as an owner to easily express or embrace. It will always be important for you to give these reasons your serious attention, and to ensure that these actual issues are clearly addressed when determining your business exit objectives.

We found that regardless of the reasons for exiting, the next step is for you to identify your personal objectives, in order to ensure that your transition or exit is aligned with your ultimate goal.