Navigating the Exit Maze: Why Early Planning is Your Best Way Out

Starting a business is exhilarating! You're pouring your heart and soul into your idea, fuelled by passion and the dream of success. But amidst the excitement of launching and growing your venture, there's a crucial aspect many entrepreneurs overlook: the exit.

Now, before you panic and think we're suggesting you jump ship before you've even set sail, hear us out. Planning your exit doesn't mean you're not committed to your business. In fact, it's quite the opposite. Thinking about your exit strategy early on can be incredibly beneficial for your business's growth and your own peace of mind.? Ultimately you will need to exit somehow, whether you just fold it up, pass it on to your family, management or staff, list it on a stock market or sell it.

Why Plan Your Exit Early?

• Clarity and Focus: Having a clear exit strategy will guide you as you define your goals and make strategic decisions over time. This doesn't mean the tail wags the dog and you only thinking about your exit.? It means your planning will be improved by having the end goal in mind,
• Increased Value: By considering your exit early, you can focus on building a sustainable and profitable business that is more attractive to potential buyers or investors. This means focusing on key aspects like strong financials, a loyal customer base, and a solid brand reputation.
• Preparedness for the Unexpected: Life throws curveballs. Having an exit plan in place allows you to navigate unforeseen circumstances, such as health issues, economic downturns, or even just a change in personal priorities.
• Peace of Mind: Knowing you have a plan for the future, whether it's selling your business, passing it on to family, or taking it public, can reduce stress and allow you to focus on enjoying the entrepreneurial journey.

What Does an Exit Strategy Look Like?

An exit strategy isn't just about deciding to sell your business one day. It involves considering various factors:

• Your ideal timeline: When do you envision exiting your business? 5 years? 10 years? Or even longer?
• Your preferred exit route: Do you want to sell to a third party, pass it on to your family management or staff, liquidate it, or go for an IPO (stock market listing)?
• Have a plan B: If your preferred exit cannot be achieved, what would the next best option be?
• Financial goals: What financial outcome do you hope to achieve from your exit?
• Personal goals: What do want to do after the exit??
• Personal impacts: How this will affect you and those around you (e.g. change in status) and do their personal goals align with yours?

It's Never Too Early to Start

Even if your business is in its infancy, it's never too early to start thinking about your exit. By considering your options and planning ahead, you'll be better equipped to make informed decisions that will benefit your business and your future.

Measure Yourself and be Tough on Yourself

Once you have agreed on your strategy you need to identify the value drivers – the things that you need to get right to increase your potential valuation and reduce the risk of hitting due diligence challenges.

At Evoco we created a value-drivers dashboard and review this at every board meeting, making sure we were honest and hard with ourselves on our performance.? We would then agree the actions needed to help us improve before the next board meeting.?

Focusing on these value drivers really helped us plan strategically and execute effectively.? Had we not exited they still would have been the right things to do.

Our Journey 2 Exit Approach

At Exiteers we have developed our own method to guide you from the early stages through to a successful exit.?? It is a visual, 16-step process drawing on all our experience of working on building businesses, integrating acquisitions and working on the sell-side and buy-side of acquisitions.

It's like having a roadmap for your business journey, ensuring you stay on track and make choices that support your ultimate destination.

We’d love to hear your thoughts, do you agree, do you have experiences to share?

#startups ?#entrepreneurship #strategy?

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