WHAT IS YOUR EXIT STRATEGY?

By
Education & Training with Performance Development Strategies

We are a nation of small businesses. And many of our small businesses are privately held or family owned. Hopefully these business owners for the business to carry on after they have left the business. Sadly, many have not made any plans and by not doing so they are planning for their business to fail one day.

Suppose you started your business years ago and you have built a profitable business for you and your family. Your children are now working in the business. What will happen when you exit? Many parents do not have a plan in place for when they exit the business.

There are number of steps that should be taken to prepare. These include legal, financial, and preparing the next generation to take over if they want to work in the business. In the first two areas you should work with an attorney and financial planner who understands tax laws. This is particularly important if you have other children who will not be working in the business.

Now whether you seek succession of your business to your children or whether you seek to exit through sale you need to develop a strategic business plan. Your plan will need organizational vision, values, and mission.

If your business has no vision, then it has no future. How do you see your business five to ten years from now? What business are you really in? Who are your real customers? If you know the answer to these questions and you include it in your vision you have taken an essential first step. You should then be clear on your values. Core values are vitally important to customers and employees. Next, you should follow through with goals and action plan for achieving those goals.

Your business plan should be clear cut and convincing to an outside party. This could include banks and other strategic partners. Ask yourself how you would fare if you had to present your business plan to Shark Tank.

Coaching

You also need to develop your children for leadership roles. You are mistaken if you think that they will grow into it or that they will work it out themselves when the time comes. Put a leadership development process in place now. This process should include on the job challenging assignments as well as formal development. Such process will help you and them to discover their strengths and weaknesses and develop their skills. It will also help in the mutual discovery of who fits into what role. Remember, you need one president and CEO. A pre-conceived notion of who that would be may lead to disappointment or failure if a leadership process is not developed beforehand.

Many people spend more time planning a two-week vacation than they do the future of their business. You spent your career building your business. Make sure that it carries on as you intended.  For a similar blog on our website see DOES YOUR FAMILY BUSINESS HAVE A SUCCESSION PLAN?

Is it time for you to plan a strategic succession plan?

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Comments (35)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Grant my exit strategy was put into place last year, by eliminating all my debt.  The present stage is to just produce at a level I am comfortable with, and continue that until as long as I enjoy it. 

Nov 01, 2021 04:54 PM
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Grant- I love it when I read of children joining their parents in this business. If I were a Broker and had worked hard to build a brand and good business, I'd love to know that it was going to live on. 

Nov 01, 2021 06:19 PM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

George - that is an important exit strategy.  It is included in mine too.

Kathy - yes true.  We both know Active Rainers who have done that too.

Nov 02, 2021 05:59 AM
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Grant,

What a thoughtful post on exit strategy.  We have talked about it, and have not stopped getting into new projects, and we are in the midst of one.  The thought is to sell it, or will our half to family.  A

Nov 02, 2021 10:38 AM
Hella M. Rothwell, Broker/Realtor®
Carmel by the Sea, CA
Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea

Getting into real estate WAS my exit strategy.  Now I should plan my exit from the exit.  

Nov 02, 2021 11:08 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Grant Schneider - Congratulations on your well-deserved feature!  Boy did you hit it on the head in your last paragraph. Some people spend more time planning a two-week vacation than they do on their exit strategy.  I often wonder what happened when I see a "Going Out of Business" sign.  

Nov 02, 2021 02:15 PM
Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Grant,

This is tricky, because few others have your personality and aptitude. Time to break out the Myers-Briggs & some other tests to see, who comes close. If anyone wants to take over. Kids often have other plans & finding someone else can be hard too.

Nov 02, 2021 04:34 PM
Debra Leisek
Bay Realty,Inc Homer Alaska - Homer, AK

this is such a good post and it is someting I roll around in my head now and again.

I say  I need an exit strategy... then the phone rings or the text dings and I'm off to sell something or solve someone else problem.  

Thanks for making me think about it. 

Nov 03, 2021 12:12 AM
Dr. Paula McDonald
Beam & Branch Realty - Granbury, TX
Granbury, TX 936-203-0279

An excellent post on a very important topic. As a small, boutique brokerage, it is imperative that this is in place.

Nov 03, 2021 03:46 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Ron and Alexandra - that is something that is an alternative.  Some don't have the option and they look for buyers.

Hella - that is an exit strategy I realize being a solo.

Sheri - yes, now that is a sad sign for a business that has a good customer base.

Dorte - yes that is all correct.  I do break out assessements as a matter of fact.

Debra - it is something that we all must think about.

Paula - your clients will certainly want to know.

Nov 03, 2021 05:20 AM
Dan Hopper
Dan Hopper - Gold Way RE - Westminster, CO
Denver Broker / Real Estate Advocate

One of the most important "goal" one can have... and exit strategy.  Regardless, of what business you own...  . Nothing is as exciting than to be able to "sell" your business.

Nov 03, 2021 03:45 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I don't have just one thing in mind but few for later in my life. Great blog!

Nov 03, 2021 05:51 PM
Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,GRI,SRES, Brea,CA, Orange Co

Great information...I'm in the process of implementation right now...and I can tell you it has changed somewhat over the years...still a little fine-tuning on my end. I've been a REALTOR though the decades, 50 years this past March...time to turn things over! 

Nov 03, 2021 10:19 PM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Dan - for sure and that is why business brokers exist.

Laura - sure you have time.

Lynda - that is a good long run.

Nov 04, 2021 03:10 AM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

Great information, Grant Schneider. The future is coming. If we are not ready for it, there will be consequences that may not be in our best interests and not favorable for any business endeavour in which we may have an interest.

Nov 04, 2021 10:32 AM
Toby Barnett
KW North Sound - Marysville, WA
Toby Barnett

Enjoy this career so much over the next 12 years as I can then do it has a hobby and at my leisure :)

Nov 04, 2021 01:27 PM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

John - exactly.  One way or the other we will exit.

Toby - that is certainly a very good choice.

Nov 05, 2021 03:15 AM
Toby Barnett

Been selling for 13yrs now and with our family goals its definitely achievable in then next 12.

Nov 05, 2021 10:49 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

As independent contractors in real estate it offers several options. If a successful marketing strategy had been getting results such as a large number of referrals, then bringing in a team member with the understanding that it will be theirs at some point, then it is just the finances that need to be resolved.

Otherwise, it is a matter of just sailing away into the sunset

Nov 05, 2021 06:27 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Grant, think I have a great exit strategy, and worked on it for years.

Nov 07, 2021 07:06 AM
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Well said Grant! I was involved in a family business for many years! We had a plan, but as Mike Tyson said "everyone has a plan until they are hit in the mouth!" We all need a backup plan

Nov 08, 2021 10:14 PM