Within the broad business world, the term “exit planning” has become more and more important over the years. As many Baby Boomers reaching retirement age are selling their businesses, this kind of thing is becoming more common in the last few years, requiring experts who know this landscape and how to navigate it.
At Utah Business Consultants, we’re here to help. We have a step-by-step exit planning process that will help you properly value and expeditiously generate buyers and a positive purchase agreement. One thing we’ve noticed, though? Not everyone in the finance world defines exit planning the same way, and when this is applied badly, it can lead to exit planning efforts that fail. Let’s go over the simple definition of exit planning, how different parts of a business or outside consultants might interpret this definition, and how to ensure all parties are on the same page if you’re looking to create an exit plan.
In the broadest sense possible, exit planning refers to the process of developing a strategy for transferring or selling a business. In some cases, this refers to a succession strategy that passes the business on to a new generation. In others, it could be a sale to employees, another entrepreneur, or even a larger company. In still others, an exit could refer to an orderly dissolution.
The above seems simple enough, but various entities inside or associated with a given business may have slightly varying definitions of exit planning and how they serve clients in this realm. Let’s look at a few of these actors:
As the savvy businessperson will note when reading the section above, exit planning requires coordination of the groups we listed. If each entity involved in a potential sale or transfer is operating independently and without central guidance, plans will come crashing down. Perhaps the single largest factor in a good exit plan is ensuring you have these different entities all on the same page well in advance, so that when it comes time for an actual sale or transfer, everything is in place.
For more on how we can help here, or to learn about any of our business exit planning services, speak to the pros at Utah Business Consultants today.