When planning a vacation, the first step is usually choosing your destination and arrival date. Planning how you’ll get there helps you avoid unwelcome surprises, breakdowns, running out of money, or obstacles that might get you off track. It also includes factoring in how you’ll spend your time so you and those on the journey with you can truly enjoy the experience!

Business works the same way, yet sometimes business owners don’t realize that the key to a successful journey starts with the end in mind. Setting your exit date and working backwards provides a wealth of information regarding what you need to do today to be sure you reach your destination on time and with everything you’ll need upon your arrival.

After decades of working with small business owners on planning for the future, here are a few questions to consider that will help guide you in the year ahead. As you answer them, be sure to include planning for the unexpected and maintaining flexibility – both in your written plan and your company’s ability to respond to change.

Foundations

• Is your business well-grounded in its vision and mission?
• What is your one-year outlook?
• Does it align with your outlook beyond just next year?
• What do you need to accomplish in the next year to move your business forward?
• Do you have a strategic plan for your business?

Finances

• Do you have sufficient cash flow to implement your plan?
• How will you address product costing and supply chain issues?
• What steps have been taken to recession-proof your business?
• Have you completed a data-based budget?
• What will impact your budget differently next year based on the current state of the economy and its fluctuations?
• What is your revenue growth projection?
• What are your salary projections?
• What do you expect to return to equity investors?
• Do you have accurate income data for the current year?
• Have you worked with a tax preparer to do an income tax projection?
• What percent of your current year’s income taxes have been paid? Tip: If you are going to owe more than $10,000, pay half on January 15 and half on April 15.

People

• What will you do to retain key employees and keep them engaged?
• What steps will you take to implement a mindset of ownership thinking and in what segment of your business?
• Who are the key employees you’ll choose and how will they be empowered?

Big Picture/Long Term

• What are your personal goals for next year?
• How will you implement them to maintain a good work/life balance?
• Do you have an exit strategy in place?
• If so, do you have a plan for the steps you need to complete in the coming year to stay on track?

Consider Starting with the End in Mind: Your Exit Plan

Why is your exit a good place to begin? Some of the most successful companies are those whose owners have an exit strategy in place that guides their decisions years before they actually exit.

Going through the process of developing an exit strategy and a tactical plan to put that strategy into action, results in a well-researched, well-thought-out route into the future. Charting a course that leads up to the day you’ll eventually exit is a plan that is often more comprehensive than most business plans – with accountability built in.

A solid exit plan will benefit your business now with:

• A clear picture of the current value of your business, what the value needs to be at the time of your exit, the calculated gap, and what you need to do to fill it
• Identification of your key employees and options for more fully engaging and retaining them
• An understanding of what drives the value of your business and how to optimize the value drivers
• A picture of normalcy for your business coupled with the ability to be more agile, adaptable, and positioned for change
• A record of lessons learned from past and current issues to guide in the construction of contingency plans

Each of these is part of a well-charted course in which you can place your confidence. If you’ve already developed and implemented an exit strategy, it’s a great time to assess your progress and make adjustments if needed. If you’ve not started exit planning, it’s never too early, but sometimes too late.

There’s a step-by-step process for exit planning that will neutralize the intimidation factor. Imagine how motivating and inspiring it becomes when you have a target date in place and a vision for the future! Working on the specifics to get you there becomes your business blueprint, a clear approach towards getting you to the next chapter of your life.

Next Steps

Exit planning doesn’t have to be intimidating and can actually help you build the business you’ve dreamed of years before you actually exit! Contact me for a complimentary consultation to determine the best next steps for your unique situation. If you’re like most business owners, you’re counting on the proceeds from the sale of your business to maintain the security of your lifestyle and that of your family, following your exit from that business. Take this opportunity to create or revisit your plans for your future. This will help you start the new year with renewed hope and excitement about what lies ahead!

Bob Zarlengo is a Certified Public Accountant in Colorado and Arizona, Certified Valuation Analyst, Certified Exit Planner, and holds the Accredited in Business Valuation credential. His four + decades of experience in public accounting and expertise in financial reporting, income and estate planning, and tax compliance fuel his passion for helping business owners achieve their exit strategy objectives. His clients describe him as a trusted advisor who becomes a friend. 

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