Whatever the stage of your business – whether it’s a start-up, fast-growth company or has been operating for years – your strategy should include an exit strategy. Savvy CEOs and business owners are always looking forward, always asking themselves:
- How will you ultimately leave the business?
- Do you intend to sell to family members, employees or an outside buyer?
- How can you continue to make the business attractive to potential sellers?
Business owners who consciously build or maintain their companies with the goal of eventually exiting – rather than those who are too immersed in day-to-day operations to look that far ahead – put people and processes in place that keep the business running smoothly and successfully. This approach increases the equity value both in the short- and long-term. The objective should be to create an enterprise that does not depend solely upon you, the CEO or owner, for its ongoing value and revenue.
The better a business can function without needing the owner there all the time, the more valuable it is to potential buyers. My next blog will discuss some of the strategies to get to this stage.