If you’re a business owner beginning to think about the future of your business and your role in it, then let me suggest that there is no time like the present to begin developing your exit strategy. A successful exit strategy is confirmation that your business has value independent of your leadership and management.
Though there are multiple factors that impact your ability to withdraw, one of the most important elements of a successful exit strategy is developing personal wealth independent of the business. You will not get serious about turning over business ownership and management to successors until you know you’re your personal financial security is not in doubt. If you are dependent upon business cash flow you will not aggressively embrace the risk associated with competition and growth. You will not empower family successors or key managers to assume leadership or make important operating decisions. If you’re transferring to family members, the transfer of management and leadership can become problematic as conflict and power struggles ensue. Successors become frustrated with being second-guessed and not having the opportunity to learn from their mistakes.