You’re an entrepreneur. You had a dream and a vision for your business and made it a reality. It’s your passion and you’ve worked hard for years to make it successful. But eventually, you’ll leave that business – voluntarily or otherwise.

You want your exit to be as carefully planned and executed as all your other business decisions. It will be one of the most important financial events – and likely the largest financial transaction – of your life. Upon exit, you want to receive the maximum amount of money so that you can accomplish your personal, financial, income, and estate planning goals. And you want to leave your business at its best. After all, it’s your legacy. Therefore, it’s imperative that you understand and take steps to maximize and protect the value of your business long before you plan to leave it.

Exit planning is a process that addresses the what, who, when and how elements of leaving your business. It enables you to define your objectives, calculate the value of your business, and build your team of trusted advisors. It creates focus, provides for accountability and defines timing of the steps in your exit plan. It charts a comprehensive course that you can begin to follow years before you plan to leave your company, confident that you’re on track to optimize your financial position upon exit.

If you think exit planning sounds like a daunting process, you’re not alone. There are a variety of reasons that business owners don’t create an exit plan.

• They fear the unknown.
• Their objectives are not defined.
• The owner’s identity is tied to the company.
• They think they are the only ones who can run the show.
• The owner never wants to retire.

However, that doesn’t change the fact that exiting the business is an eventual reality for every business owner. Obviously, the more thoroughly you plan, the more successful your exit.

The Exit Planning Process identifies the gap: where you are today and where you want to be – and defines how you get there. Once you have a plan in place there will be no more guessing about the value of your company. You’ll start to develop a well-executed exit plan to increase the value of your company. This process takes longer than you think. The more you plan – and the sooner you start – the more successful your exit will be.

One of the key steps of the Exit Planning Process is to maximize and protect the value of your business. Many factors affect its value. Top drivers include:

• A stable, high-performing workforce
• Sustainable systems
• Diverse customer base
• Good facility appearance
• Realistic growth strategy
• Key performance indicators (KPIs) in place for financial controls
• Cash flow, profitability, revenue, low debt
• Attractive business sector
• Having an exit plan

Obviously, optimizing the value of your business is not a quick and simple process. How should you start? Simplified, the exit planning process involves identifying your exit date, defining both short-term and long-term goals, developing your advisory team, clarifying your objectives, and creating the plan.

You might also consider joining our Peer Advisory Exit Planning Board. I facilitate a group of business owners who meet bi-monthly for discussions about challenges faced in the exit planning process, and ideas for addressing those challenges. Board participants also receive one hour of individual consultation with me every other month.

Don’t delay! Take steps now to start maximizing and protecting the value of your business so that you are well-prepared financially when the day comes that you step away from your business and into the next phase of your life.

Robert J. “Bob” Zarlengo has more than four decades of experience in public accounting. He is passionate about helping business owners achieve their exit strategy objectives. His clients include entrepreneurs, business owners and retirees. In addition to exit planning, his consulting services include financial reporting, income and estate tax planning, tax compliance, and transition planning.