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Three surefire ways to get your exit plan on track


03 Jun 2015

Do you have an exit plan? Staying focused with clearly defined targets is crucial to securing a happy retirement, so make sure you follow our three step guide to getting your exit plan on track.

Exit Plan

Do you have an exit plan? It’s the first question any business adviser or potential investor will ask, and it’s surprising how few owners have a firm plan in place. For many, running a company is more than just a job, it’s a whole way of life, and thinking about the future can be a daunting prospect.

Matters can be further complicated when one or more partners are involved – as is often the case with medical practices, care homes and the like. However, having a clear direction and targets in mind are crucial for continued success, especially if you dream of retiring with money in the bank.

Follow these three simple steps to keep your goals on track.

Communicate

It may sound simple, but communication is key. Some owners might assume they’ll pass the family business onto the next generation, without actually discussing it, leading to confused panic when it emerges that interests lie elsewhere.

Similarly, business partners may find it awkward to discuss individual end goals or formulate plans for disaster management, i.e. what would happen if one partner became seriously ill or passed away.

It’s important to be open and honest with all parties, otherwise your exit plan will be up in the air. Be precise about the finer details and agree on the best way forward. Once you know what you’re working towards, the rest will fall into place.

Delegate

If you’re planning to sell the business, you can’t make it revolve around you. Buyers will simply walk away if processes aren’t in place for a smooth transition, so it’s critical that you remove yourself from the day-to-day running of things and empower staff to take more responsibility.

Laying out a clearly defined management structure will show that the business is well positioned to carry on without the principal owner(s), making it a much more attractive proposition.

When valuing a business, we don’t simply inspect the property and look over the books – we look at all aspects of the operation. If you can demonstrate that key members of staff are in place and have a firm understanding of things, the company will become more valuable. Staff training should be regularly updated, and best practice guidelines constantly reviewed.

If one party is exiting a partnership, such as a General Practice or Veterinary surgery, it’s vital that the remaining partners are confident in their ability to maintain things, so all contracts and processes need to be written down and clearly defined. Too often, business owners walk around safe in the knowledge ‘it’s all up there’, but going on autopilot will only take you so far. If you never pass information on, the business will suffer in the long run.

Anticipate

Unsolicited calls are often made by business brokers, keen to see whether you’re looking to sell, wishing to expand or wanting to move premises, so it’s important to have a firm footing on where you are as a business.

If you don’t discuss things, share information or have a clear idea of where you’re heading, you’ll miss opportunities and put the business at risk. At Andrew Forbes, we regularly value companies that have no intention of selling in the short term – they just want clarity on their current valuation and areas where they need to improve.

Having a well thought-out and clearly defined exit plan is imperative if you want to one day reap the rewards of the effort you’ve put in to build the business up. It’s the age-old adage: Fail to plan, plan to fail.

For more information on our valuation services and how we can help you plan for the future, please contact us online or call 0117 968 8844.

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