The ideal way in which to approach the topic of EXIT STRATEGY is by first reviewing one's Life / Personal goals and then determining IF and HOW the Business Strategy and Performance fits into this bigger picture. Once the bigger picture is formed, it is then time to review the importance of a sound business strategy which is specifically tailored to the Goals and Objectives associated with the EXIT STRATEGY:
LIFE & PERSONAL GOALS
As every indovidual in the world is unique so are the infinite possibilities of personal goals, life goals and business objectives. One must first define the playing field of WHAT GOALS dictate the PATH of ALL OTHERS for YOU as the owner / entrepreneur of a busines. These may included, or not, any of the following:-
The issues we are concerned with here are those associated with what to do with one's business assets in pursuit of one's persoanl and life goals i.e. Is the Business the Key to the strategy, does it have an intermediate purpose or does its ownership represent threats to the strategy being achived. Once the goals are defined, the role of the business clear and a view of timing in mind, the canvass is laid out for the creation of the exit strategy.
DEFINING THE STRATEGY
As with any Strategy the simple approach is to determine:-
CURRENT ASSET BASE
The GOAL defined, the next step is an evaluation of the ASSET BASE of the organisation, trust, individual,etc. Assets need to be defined as personal or corporate as their treatment (ownership, taxation, valuation) are likely to be different based on their ownership. Current, past and future performance; market and environmental factors and many other other criteria must be considered in reviewing the asset base.
EXIT ASSET BASE
Utilising the hyperlinked chart you should then consider completing an initial assessment of the role of each asset in the EXIT Strategy, its, valuation, ownership and structure. The process should form your initial assessment with revaluation assessments being performaed at strategic points along the EXIT Satrtegy, thus determining progress towards the end goal in terms of Timing and Asset Valuations (EXIT VALUATIONS).
In order to complete the Asset Assessment accurately a detailed plan is requireed for each Asset. The professional services of IFA's, Lawyers, Actuaries, Valuation houses, Management consultants and Taxation specialists will all be required along the way from time to time. The key activity being a regaular review of the EXIT STRATEGY (possible monthly, but more likely quarterly, dpendant upon the total timescale associated with EXIT).
BUSINESS STRATEGY & PERFORMANCE
The role of the business in the EXIT STRATEGY is, by and large, governed by normal business management tools, techniques and performance measurement / management but the key to the success of the strategy is top gear everything to the target EXIT timing and plan e.g. operating to a 10 year exit strategy, signing a new lease on the company's head office premises for a further 25 years may not be an advisable decision.
Key decisions to be considered when reviewing the rol of the business(s) in the EXIT STRATEGY are as follows:-
Strategies available will include partial exit, partial asset valu extraction, management buy-outs, timebased solutions and, possibly even maintaining control but stepping back from day to day management. Ensure, when selecting strategies, that the route taken is appropriate to the target asset valuation in the EXITS TRATEGY - often timing may have to be sacrificed for value and vice versa, depending upon the overriding goal of TIME or VALUE in the overall strategy.
No two sets of requirements or exit strategies are identical. Each EXIT must have a tailored plan - do not fall into the trap of "what worked for Fred must work for me".
