Exit Planning On Your Terms: Questions and Answers

Recently I received a question about a post I made on LinkedIn and thought you might be interested in my answer.

When is the best time to start your exit strategy for your business?

The best time to start an exit strategy is when an owner launches their business. That way, they start on the right foot focusing on building and growing their business so that it can eventually be transferred almost turnkey to a new owner. Most owners don’t do this.

The next best time is three to five years before the owner wants to transition out of the day-to-day operations or sell their business. This gives them time to implement new practices and possibly fix existing problems, so their business is more appealing to a potential buyer.

The benefit to the owner/seller is that they know they are well prepared and can confidently begin negotiations.

The advantage to the buyer is to reduce the risk; the potential buyer knows what they’re buying. Reduced risk can possibly increase the price a buyer is willing to pay.

It’s a win-win for the seller and the buyer.