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	Monthly Business e-Tips	Vol 6 Issue 4

Planning for a Future Exit, Part 2 – Teamwork Works

"None of us is as smart as all of us." – Ken Blanchard

The point of exit planning is to position your company as a great opportunity. An exit strategy has various aspects: legal, financial, operational, and emotional. Once a business owner has decided to plan an exit strategy, a team of trusted advisors must be assembled to assess each dimension. Make sure you choose people who will work toward your best interests and can be honest with you.

Your team may include your current CPA and attorney, or you may need to identify professionals who have specific experience with exit planning. In addition, your team should include a valuation specialist, financial planner or wealth manager, insurance agent, and investment banker or business broker depending on the size of your company. A relationship with a good business broker will guide the timing of your future sale.

One person should coordinate the team, construct a plan, and work toward the milestones that dictate the next stage. That individual will hold onto the big picture and protect your well-being through all the transitions. Usually the business advisor or coach fills this role.

A long-term focus (five or more years) will put you in the best position to exit. I cannot stress enough that sufficient time gives you power and control over the exit process. Planning insures that you are not a victim of circumstance.

Here is how an exit team works together:

• Valuate the business early. Evaluate your business, management, and financial health now to get a realistic view of its current worth. Plan to increase its value over the next few years. ProfitPath is a process designed to help you through this exercise. Communicate the results with your other advisors.
• Keep thorough financial records. Consistent and well-documented cash flow is a key attraction for potential buyers. Two years of financial reports are essential. Strategize with your CPA and business advisor to increase profitability.
• Set up for an easy exit. Review legal and tax issues for the exit sale as well as for unexpected events, your retirement, and your heirs. Buy-sell and other agreements will keep you safe for a future sale or transfer. Strategize with your attorney, CPA and financial planner for the best tax outcome.
• Review all your processes and procedures. Provide the new owner, family members, or employee ownership with the tools needed to succeed. Work with your advisors to identify systems that will strengthen your business.
• Maintain visibility in the marketplace. Protect your stellar reputation and solid, varied customer base. Strategize with your team to monitor and enhance your position in the marketplace.