What is Exit Planning?
The Short Answer
Exit Planning explained simply
Exit planning is all about getting your business ready for when you decide to leave it. This could mean selling it, passing it to family, or even closing it down. It’s not just about the sale itself, but everything leading up to it. This includes making sure your business is valuable, organized, and attractive to potential buyers. It also involves getting your personal finances and goals in order so you’re ready for life after the business.
Real-World Example
The Coffee Shop Owner
Imagine Sarah owns a popular coffee shop. She wants to retire in five years. Her exit planning starts now. She focuses on increasing her shop’s profits, documenting all her processes, and building a strong management team. She also talks to a financial advisor to plan her personal finances for retirement. By doing this, when she’s ready to sell, her coffee shop will be more appealing to buyers and she’ll be financially prepared for her next chapter.
Why this matters
Exit planning matters because it helps you get the most value for your business when you sell. It also makes the selling process smoother and less stressful. Without a plan, you might leave money on the table or face unexpected problems during the sale. It ensures you’re ready, both financially and personally, for life after your business.
Start exit planning early. The more time you have, the better prepared your business will be, and the more options you’ll have when it’s time to sell.
Start exit planning early. The more time you have, the better prepared your business will be, and the more options you’ll have when it’s time to sell.
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