startup tips

No matter how successful your business is, sooner or later the time will come when you start to think about retirement, and selling up. For that, you need an exit strategy.

Why you need an exit strategy for your business

When it comes to selling your business, you can't afford to wait until retirement and then hope that you find a buyer right when you need one. If you hope to make enough money from the sale of your business to see you through retirement, you need to start thinking now about building the kind of business that will sell quickly, easily - and for a profit.

What this means is viewing your business as the business it is, rather than as a vocation which allows you to draw a salary each month. Yes, it's that too: but by planning a profitable exit strategy for your business now, you'll make sure that one the salary stops coming, your business will still have made you enough of a profit to let you live comfortably after retirement.

The wrong type of exit strategy for your business

Many business owners make the mistake of starting to scale down their business before retirement: taking on fewer customers, reducing their hours - in short, doing everything possible to make sure that their quality of life increases, and the value of their business decreases.

Make no mistake: a business with dropping customers and the feeling of a business that's past its prime aren't attractive to prospective buyers, who know they'll have to work twice as hard to regain the lost customers and build the business back up again.

A far better exit strategy is to make sure you quit your business while it's still in its prime, and still attractive to both customers, staff and buyers.

Exit strategy essentials for your business

Whether your exit strategy involves keeping your business in the family by passing it on to a child or other relative, selling it to a stranger or passing ownership to a partner, here are some things you need to do:

1. Know the value of your business

The monetary value of your business will depend on a number of different factors: your assets, the size of your customer and client list and the profit you're making, to name but a few. It could be a good idea to have a professional valuation carried out as part of your exist strategy to make sure you know the value of the business before you decide to wind it up.

1. Get your paperwork in order

When the time comes to sell your business, you're going to find yourself required to produce one piece of paperwork after another. Things such as insurance policies, property ownership documents, contracts of employment and mortgage information will all need to be made available to prospective customers, and you'll also need to have full copies of your accounts and customer files. Making sure you have a solid accounting and finance system in place now should be a part of your exit strategy, and will make the process of actually selling up much easier when the time comes.

1. Keep your staff and customers happy

When you're forming your exit strategy remember that you're not just selling the customers and equipment, you're selling the goodwill generated by it too - and will hopefully sell the business along with the existing staff. What that means is that you have to make your business marketable by keeping your customers and staff happy. Resist the impulse to scale back on hours and service and make sure it's business as usual right up to the moment of sale.

It's never too early to think about forming an exit strategy for your business: in fact, having a good exist strategy should be an important part of your business plan. Make sure your business is marketable when the time comes by concentrating on making it thrive now - and making sure it continues to thrive until you're ready to sell.

Robert Moment is an innovative forward-thinking small business and marketing coach and author of Invisible Profits: The Power of Exceptional Customer Service. Robert specializes in teaching entrepreneurs and small business owners how to "Do Business God's Way for Profitable Results". Visit http://www.christianpreneurship.org/ and sign-up for the FREE 5 day e-course titled, Small Business Marketing Plan: A Blueprint for Attracting More Clients.