Much of our focus in Q4 is planning for the next year. This year has been an eventful one, yet again, and reiterates the necessity to plan for the unexpected and maintain flexibility – both in your written plan and your company’s literal ability to respond to change. There’s a lot to factor in as we move forward. Take some time to consider what year end planning means to your business and to ask a few questions.
- Is your business well-grounded in its vision and mission?
- What is your one-year outlook?
- What do you need to accomplish in the next year to move your business forward?
- Do you have a strategic plan for your business?
- 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 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.
- 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?
Start with Your Exit Plan
Why is this 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. 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 those drivers
- A picture of normalcy for your business but 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
- A well-charted course in which you can place your confidence
If you’ve developed and implemented an exit strategy, it’s a great time to assess your progress and make adjustments if needed, to the course you’ve charted. If you’ve not started exit planning, it’s never too early, but sometimes too late.
Begin at the End
A successful journey starts by choosing your destination and arrival date. Planning how to make that happen includes avoiding unwelcome surprises, breakdowns, running out of money, or anything else that might get you off track. It also factors in the time and opportunities to enjoy the experience and better yourself – and those on the journey with you. Begin by setting your exit date and work backwards to determine what you need to do today in order to get there.
Laying the Foundation
As you build your plan, refer to my blog, What Does Your Vision Look Like For the Next Chapter of Your Life? With a target date in place and a vision for the future, you’ll be motivated to jump in and start working on the specifics. There’s a step-by-step process for exit planning that will neutralize the intimidation factor. You’ll be inspired as you see things fall into place and are able to envision your future, your successful exit, and the next chapter of your life.
Next, take our online Exit Planning Assessment to identify where you stand in relation to your exit objectives. Our Value Driver Analysis will help determine the current value of your business and what it must be worth for you to achieve your exit planning financial objectives. Identifying your “gap” and filling it, is obviously a critical and major component of exit planning. This step will also illustrate why you need years to cultivate and protect the value of your business, and therefore, the importance of starting your exit plan now.
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 re-create – your future. Start or re-evaluate your exit plan and start the new year with a renewed hope and excitement about what lies ahead!