Do you have an exit plan in place for your small business? Is your exit plan formally written down or is it something that is just in your head?
Do you pull your exit plan out and review it more than once a year?
I believe that the majority of small businesses do not have a formal exit plan written down.
Here is why I believe not having an exit plan in place is very dangerous for a small business.
No Vision or Goal
The old saying goes “start with the end in mind”, and it’s very applicable to your small businesses. Having an exit plan written down that you can reference allows you to focus on a long-term goal.
As a business owner your actions day in and day out should support your exit; if they don’t delegate those tasks and focus on what really matters in your business.
Most businesses don’t have a formal exit plan written down because it never crosses their mind that they will have to exit the business someday.
An exit plan does NOT mean that you need to sell your business, in fact, there are many options that an exit plan could entail. A few popular options for exiting your business are to bring on an equity partner, go public, or pass it on to family.
Your exit plan will change dramatically over the life of your business. So you should start with an exit plan right from the beginning, no matter how simple it is.
Pull out your exit plan once or twice a year and read it. Does it still sound valid? Have things changed? If so, modify your exit plan and continue to review it a few times a year.
Turmoil if You Leave Unexpectedly
Some of the best business advice I have been given was to “run your business where you could walk out the door, get hit by a car and pass on, but your business would still thrive.”
It’s a sick thought, but the mentality behind it is very powerful. If your business can survive without you then you can exit, if not, you certainly can’t.
If you left the businesses unexpectedly do you have a contingency plan in place? Would your departure from your business cause turmoil or would your business thrive?
If turmoil would ensue why is that? If you can identify the “why” in the last question then you have identified some things you need to work on.
Come up with a contingency plan for your departure from the business, as well as every other position on the organization chart.
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