Why your business needs an exit plan
This may sound odd, but one of the most important parts of running a business is planning your exit. That may seem counter-intuitive – why would you be planning to abandon something which has been your life’s work? But reality intrudes into the best laid plans: you may become ill, or have other time constraints imposed – or, on the bright side, you may get tapped on the shoulder and be made an offer you just can’t refuse.
Either way, the lesson is clear: you should be constantly prepared to sell or exit your business, even if you have no immediate plans to do so. Lawyer Tony Lalor says that he constantly sees examples of businesses which have been caught unawares:
“The most common mistake is not keeping the books in order – so, when an exit situation arises, significant work has to be undertaken to provide potential buyers with meaningful due diligence material,” he said. “I cannot stress enough the importance of planning ahead and keeping your house in order.”
Tony Lalor is a partner at Mills Oakley, partner of the Australian Owner Manager program. Lawyers from Mills Oakley will be presenting as part of our programs, providing advice on a wide range of matters including tax, business restructuring and how to best protect your IP.