Once an entrepreneur has become established and they have built their business to a point where it can become self-sufficient or the infrastructure is strong enough to withstand a transfer of power, there are many questions that should be asked. Exiting a business that you have built is not a decision that should be made quickly, so take a moment to ponder the following questions before making a choice that could adversely affect your destiny.

Here are the top questions some authors on exit planning suggest entrepreneurs ask before exiting a business:

1. Is The Business Ready For My Departure?

Entrepreneurs often make the mistake of stepping away from their business too quickly, before the business has had a chance to grow to a point where exiting is feasible. Most business experts recommend taking at least two years to properly evaluate the marketplace and their business’ place in the landscape. Business trends that can torpedo everything you’ve built can emerge seemingly overnight and scuttle even the best laid plans.

In order to get the best sale price for your business or pass it down to the next person in line, you need to be able to show all of the correct paperwork. Entrepreneurs will often try to execute a rapid transfer, but you need a great deal of time to ensure that your exit goes smoothly. If you are planning on being able to exit your business within a month or two, you should reconsider this plan.

Putting together the correct plan for exiting your business takes years of careful preparation. Do not allow yourself to be swayed by those who present you with plans that entail walking away in a more expeditious fashion.

2. Who Is On My Team?

Before you exit your business and pass it on, you should know what members of your current team are going to remain in place after the transition has been made. You will also need a team that can help you through the transitional period. This means hiring experienced business attorneys, accountants and appraisers. If you are inexperienced in these matters (and even if you aren’t), you should bring in a consultant to provide valuable advice.

Having a team to guide you through the process of exiting your business gives you the help you need in avoiding a variety of common pitfalls. You should also know which members of your current team wish to remain on board after the transition period has been completed. Some team members may wish to exit as well, in order to pursue new opportunities. Others may decide that they wish to remain a part of the company, but may be concerned about potential changes to their role.

3. Is The Timing Right?

In the business world, certain periods are much more tumultuous than others. As a result, the timing may not be right for you to step away from the business that you carefully shepherded through its infancy and watched grow into what it has become. A lot of entrepreneurs choose the wrong times to sell their business or hand it down to the next person in line.

If you are trying to exit your business during a period of decline, don’t. In order to think like a true entrepreneur, you must strike when the iron is hot. The best time to exit your business is when things are on an upswing. Stepping away when you are at the peak of your powers is incredibly difficult, but necessary.

When you decide to remain at the helm during a period of prosperity, this is thinking with the mind of a business owners, not the mind of an entrepreneur. Make sure the timing is right before handing your company off to the next person.

4. Can The Business Continue To Thrive In My Absence?

Is whoever you are passing your business down to ready to handle the responsibility? Is there a strong infrastructure in place that will allow them to succeed, even after you are gone? A business that has become entirely too dependent on its owner is one that is doomed to failure, should they ever decide to exit.

The best businesses are the ones that can still run at maximum efficiency if the owner is not there. Take a moment and consider times in the past when you decide to step away. When you have gone on vacation, was the company able to run properly or were there a variety of hiccups? Or were you never able to go on vacation because you were worried about potential complications?

No one wants to see everything they have worked for crumble the moment they step away. So make sure you know for certain that the business can continue to thrive and grow without your constant presence.

5. Can I Stay On If Needed?

After control of the business has been transferred over, the new executive or executives may need your help to ensure that the transition goes smoothly. Are you willing to remain on board, albeit in a smaller, more advisory type of role? The person who you are handing the company down to could want your help and they may have a certain level of trepidation during the early going.

Before exiting your own business, be sure that the new regime has the ability to hit the ground running. If not, then you may need to stay attached for a little while so that the transition period is not as rocky. Staying on and becoming a consultant can help ease the growing pains for whoever you are passing your company down to.

Recommended books on exiting a business:

Finish Big by Bo Burlingham
The Exit Strategy Handbook by Jerry Mills
Sell Your Business for More Than It’s Worth by Michelle Seiler-Tucker
Final Act of Onwership by Jerry Baltus
The Art of Resignation by Steven Feiner

What questions do you wish you asked yourself before exiting a business? Share yours in the comments:

The post 5 Questions Entrepreneurs Should Ask Before Exiting A Business appeared first on The Entrepreneurs Library.

7 Important Things You Need To Know When Selling Your Business

Selling your business may be the hardest challenge you have had to deal with as an entrepreneur. It’s lengthy, and troubling, and even infuriating at times. And it gets worse if you think that the issues will be resolved once the deal is done. But this isn’t so. As an entrepreneur, you need to have a clear idea about how you will handle this phase.

Here are 7 important things you need to know when selling your business

Take your time to make the decision. Whether you are planning to sell your business to spend more time with your family or invest in a bigger venture, you need to think about your decision for a hundred times. Sometimes, the length and complications of the process disgusts the best entrepreneurs and makes them rethink their decision.

Keep your focus on the reason you want to sell in the first place; and plan ahead.

Detach from the business. Well, you have put in money, time and effort to make your business grow. But think it from the buyer’s perspective – would you buy a business where the owner needs to invest 20 hours a day to run the daily operations? Or, rather one where the owner has the freedom to take off days and go on holidays?

Make sure the business runs smoothly; even without you being part of its daily operations.

Appoint professionals for the task. If you haven’t handled a business sale before, you may have no clue about the process. And if you have, the same may yet be true. It involves legalities, figures, numbers, and an array of documents. And it’s impossible for you to handle it all without specialized knowledge and experience.

Appoint a legal professional as well as an accountant specializing in this particular field.

Learn how to deal with the stress. Appointing professionals isn’t going to help you with the stress. Your legal team will unearth problems you never knew even existed. Your accountant will ask for figures you never knew anyone required. And dealing with it all will often feel too exhausting.

Cultivate a positive attitude; always remember that the professionals are for your help.

Set a realistic value. Every entrepreneur thinks of their endeavor as the best in the market. And this reflects in the price you set when you decide to sell your business. The only problem is – the buyers may not have the same opinion about it. Well, it’s true that they want to buy your business, but they want to do it at a reasonable price.

If you think you are biased, opt for an objective opinion before you decide on it.

Be wary of debts and documents. If you have adequate time to plan before you sell your business, you have the window to get rid of any debts you have incurred. Otherwise, it will lower the amount you get after the sale. Also, pay attention to any documents you have signed in the past that adds to your liabilities.

Discuss every detail with your lawyer and accountant; and get their advice about these.

Assess your team’s capabilities. If you have put together a winning team, it will prove to be one of your assets when you sell. But if your team comprises of family members, who take their paycheck just because they are family, or of employees who will never find another opportunity, you are in trouble.

A buyer will evaluate the capabilities of your team; do it beforehand and take measures.

Selling your business is a big decision; you need to plan from the day you decide to do it.

Are you planning on selling your business in the near future? If so here are some expert books that I recommend you read:

Walk Away Wealthy by Mark Tepper – Listen to my interview with Mark here
Final Act of Ownership by Jerry Baltus – Listen to my interview with Jerry here
Sell Your Business For An Outrageous Price by Kevin Short – Listen to my interview with Kevin here

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