As the days grow warmer and flowers bloom, spring brings the perfect opportunity to refresh and renew. While many associate this season with clearing out closets and tidying up gardens, it's also an ideal time to apply that same mindset to your business, specifically, your exit plan.
Whether you are years away from transitioning your business or actively preparing to sell, spring is a perfect time to step back and take a strategic look at your plans. Consider it “spring cleaning” for your business future.
Review
Start by assessing where you currently stand in your exit planning journey. The first step is to estimate the value of your business and ownership interest. This value anchors financial planning and transition strategies, such as the timing, method, and recipient of your ownership interest. Consider whether your legal documents, such as ownership documents, personal will, beneficiaries on life insurance, etc., are current and accurate for your existing situation and future goals. Review your current personal financial plan and how dependent you are on your business. Think about how prepared you and your business would be if you needed to exit suddenly due to unforeseen circumstances—would your business be in a position to be sold, and would you be personally and financially ready to exit your ownership? Throughout this process, consider whether you have the right team of advisors—legal, financial, and strategic—that can help establish a foundation for your future plans.
Reset
Resetting plans involves considering your personal goals, business goals, and financial preparedness. Start by reassessing the who, what, and when of your exit. Who do you envision taking over—family, partners, or a third-party buyer? What are your financial requirements to sustain your lifestyle and legacy? When do you realistically see yourself stepping away from the business? What do you plan to do in the next chapter after you have exited your business? In each of these areas, consider: are your business goals focused on building a legacy transfer or maximizing value for a sale? Stepping back and looking at your personal and business goals and dreams is critical to tailoring an exit plan for now and the future. Furthermore, a well-designed, adaptable exit plan is not a one-time event; it’s a plan that evolves alongside your life and business and should be revisited at least annually.
Renew
Once you’ve taken the time to review your current position and reset your personal and business goals, the next step is to renew your exit plan with a clear, actionable strategy. Begin by engaging your team of trusted advisors—legal, financial, and business—to revisit and refine your plan to align with your updated vision. These conversations may lead to important changes, such as updating shareholder agreements or buy-sell provisions, refining your succession blueprint, creating a strategic plan for the business, or recalibrating your financial plans. With a renewed sense of direction, it’s time to turn ideas into execution. Collaborate with your advisors to outline a focused set of action items designed to meet your goals and create a timeline with defined milestones to track progress and maintain momentum. A renewed exit plan isn’t just about planning—it’s about actively building the future you envision, with the guidance and structure necessary to make it a reality.
A Small Effort Today, Big Dividends Tomorrow
Spring cleaning your exit plan isn’t just about being organized—it’s about being prepared. Whether your transition is just around the corner or a decade away, refreshing your plan can prevent costly surprises and increase your odds of success.
