Most business owners are so busy with their day to day routine operations that they often don’t think about planning for a business exit, or just as important, reviewing that plan on a regular basis. Therefore, you have worked to get a good exit plan in place. Great! Now how often should that plan be adjusted? There are a couple of factors that will help determine the frequency at which your Business Exit Plan should be reviewed:
Size of your Business
Type of Business
Size of your Business:
It is only natural to realize the larger your business is, the more complex your Exit Plan will be. While the exit plans of small to medium-sized businesses can be complex, more than likely, that is not the case and they will not need to be reviewed as often. At the very least, every business (regardless of size) should schedule an Exit Plan Review twice a year. Going over each detail of the Plan will ensure that any changes that have occurred in the last six months have not affected your overall goals and strategy. Many larger businesses prefer to do a review more often. This could be quarterly or even monthly and can be incorporated into the agenda of the regular business meetings. Of course there are other factors that can facilitate the need for more frequent reviews. Some of these can be excessive growth or down-sizing, or changes to the laws or taxes that relate to your business.
Type of Business
The type of business can have an effect on the frequency needs of reviews as well. If your business has locations in foreign countries or does business with foreign countries you may need to do a review more often. The same goes for some businesses that have supply chains that are complex and/or spread out. Your Exit Plan should set goals, measure results, and provide accountability. Your reviews should address all of these in order to minimize taxes and for your business to grow in value.
Conduct an Emergency Drill
Consider an annual Emergency Drill to ensure that all the stakeholders in your business know what to do and how an emergency will affect each of them. Perhaps an outside source could develop a mock emergency and present the situation to add the element of surprise to the business leaders. As with many things, you can never be too prepared for the unexpected.
While an Exit Strategy is one of the most important pieces you can develop for your business, it serves you best if it is reviewed occasionally, and tweaked to meet the needs and expectations of your business goals.