Monday, 19 March 2018

Information and commentary for the small business banking industry

Why succession and exit planning is important for small businesses

26 Jul

Every business owner dreams of successfully exiting their business. The right people have bought it, or have taken it over, and a great sale price was achieved. The way to ensure that your small business customers achieve a successful exit is down to planning. It’s actually never too soon to start thinking about how they want to exit their business, and you can help them do this.

They key is making sure the business is always in good shape to sell, rather than waiting until they actually want to leave. An unexpected offer might pop up, or something might happen to the business owner to prevent them from continuing. Whatever the reason, it’s important to plan for that eventuality and have all their ducks in a row.

Documenting all processes, having up-to-date cash flow and net profit forecasts on hand, customer loyalty programs and efficient systems are all essential to measuring the health of a business so it can be analyzed for sale. If the business is passing to another person – such as a family member – they should be properly trained and groomed to take over.

When all is said and done, successfully exiting a business comes down to planning, so talk to your small business customers about getting their plans in place sooner rather than later.

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