Exit Strategy and Why it Matters

When to develop your exit strategy 

 

The landscape in the debt collection pace is shifting and the pressure of increased regulation, lawsuits, and shrinking margins are all on the minds of business owners in the space.

But, even if you’re not looking to pivot into your next chapter, the sooner you start developing your company exit plan, the better to set yourself and your business on the path to the best possible outcome.  

 

Experts advise that it takes between 3 and 5 years to set up a business for a successful exit. Leave it to the last minute and you’re stopping your company from realizing its true value.   

A significant economic correction could cause ripple effects throughout the economy, leading to a possible recession later in 2022 or 2023 could motivate even more business owners to make quicker decisions on selling their businesses…

 2022 will likely represent a Year of Correction within the financial markets. We are seeing corrections in the stock markets, which are anticipated to continue as the Fed gears up to raise their rates as many as seven times between 2022 and the beginning of 2023. Based on the increase in stock value in 2020 and 2021, driven predominantly by the pandemic and stimulus funding, a market correction forecast is not surprising. However, if the correction is significant enough it can cause ripple effects throughout the economy, leading to a possible recession later in 2022 or 2023. This could motivate even more business owners to make quicker decisions on selling their businesses.  ~ Mark Russell   Managing Partner Corporate Advisory Solutions

 

How to Develop a business exit strategy plan

The first step in business exit planning should be to ask yourself, how long do you want to stay involved in the business? 

Next, ask yourself, what are your financial goals? These will certainly impact which exit strategy you choose. Finally, assess your financial situation, do you have investors or creditors to pay? 

Research the pros and cons of different exit options before you begin developing your exit plan. Once you’ve chosen the right strategy for you, make sure you include detail on what will happen as part of the exit strategy, in your business plan. 

Important considerations for business continuity.   

  1. Your business financials including contracts audit, business pipeline trend analysis, policies and procedures, outstanding AR, litigation audit and risk assessment.
  2. Your investors and stakeholders will be included in the plan and the details of succession communicated
  3. Your leadership team and employees – what will the succession plan messaging be and how will you communicate the plan for a smooth transition.
  4. Your customers, what will the messaging be and how will you communicate the plan for clarity, transparency and minimal impact.

Learn More

The ARM industry has been everchanging.  The recent enactment of Regulation F as well as new technological trends continue to drive business requirement changes. With these changes in full swing, now is a good time to look at a multi-year business plan, and how being intentional about your exit strategy will pay dividends in the long run.  Here a few additional resources to help you plan:

The ARM Industry Reaches and Inflection Point

CAS 2021 Year end Report

Is it time to sell our business An In Debt Discussion Podcast 

To learn more about planning your next pivot listen to the entire Fair Debt Podcast conversation with Michael Lamm here

https://kindredforce.com/podcast/episode-14-planning-your-pivot/

Leave a Reply

Your email address will not be published.