What is a business EXIT PLAN??
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- Опубликовано: 19 июн 2024
- A long time ago, when I set up one of my first limited companies, a good friend of mine gave me a piece of advice that has always stood by me. Always have an exit plan! In today’s video I’ll explain why this is so important, the implications of not having one and a few thoughts as to how you can put the wheels in motion to sort this out.
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Exit Plan Chapters:
00:00 - Introduction
01:12 - The Story
09:07 - What is an exit plan?
17:05 - Writing an exit plan
#smallbusiness #smallbusinessowner #exitplan
Knew one business who had a chap doing all their programming. He died at his desk and no one knew the passwords. Also in a different business one shareholder was locked up, and to make him negligible, a share issue was done so instead of 50%, he then only owned 5% - it was done all properly, he was given notice in the nick, but did sod all. If had used a proxy it might have not happened, but he didn't.
Glad to see you mention key-holder insurance. I don't think I've actually seen it for years.
Interesting! Yeah, things can go horribly pear shaped 😬. Useful info! 👍
A very sad but always relevant story. Also you have to consider if you don't get on & need to separate things out (same goes for if buying a house or getting married you have to cover off the worst case situations & hope it's never needed).
I speak from experience that passwords, accounts, job details/rough costings ordered/invoiced etc need to be somewhere & not in your head.
In a similar vein some points can be taken for those in employee roles and those who have employees, detail what the role entails, how things are carried out so if the worst happens someone else can pick things up and not have to bother the person who was in the role (assuming they are around but indisposed)
Yup - all very valid points Sarah! 👍👍
I know of more businesses that have been a total disaster with partners as opposed to successful relationships. I would never entertain it without a rigid contract.
Yup, don't know if I'd do a partnership again - other than family. But even then there are still risks. 👍
This is so useful, will be sure to consider this asap.
No worries! Glad it's of use!
Great video Andy. I've just wound up a partnership, and although the partnership was formed without a partnership agreement, we wrote and sign a dissolution agreement, so that it was clear that what assets were being transferred to my ownership (which also gave us somewhere to record the amount of money changing hands), and confirmed I had the permission to ask suppliers to transfer our trading accounts to my sole name.
My partner wanted to sell much earlier than I had expected, and fortunately I had the money to buy them out, but things might have been difficult if I had not been able to do so. We discussed when we might end the partnership at the outset, but didn't write this down or formally agree to it, so it can as a bit of a surprise when they wanted to end it early.
I've been involved in contract negotiations for many years while employed. One of my keep principles was "Before you sign any contract, make sure you know how you can get out of it if you need to".
Also I have owed and still own a number of assets jointly with other people (not land or property). I decided that my default position would be that if I died I would leave my share of any such assets to the co-owners equally, and my Will states this. Leaving them to my partner, who would have no use for the assets and no interest in owning them (and who is well provided for financially) would just create a headache for her and for my co-owners, so it made sense to me to leave my share to be split between the people who faciliated my ownership of the assets.
Not taking a wage is a bad idea. If the business can't pay you a wage, it's not a viable business. I subscribe to the views set out in Mike Michalowicz's book "Profit First". Mike is strict on the point that the business owner gets paid first! My view is slightly different which is that the owner should only get paid once suppliers, employees and the tax man are paid, then, if there is anything left, depreciation money can be put aside, stock bought and investments made. I've never been a fan of borrowing to build a business, but if the business can easily sustain the repayments and there is a very postive business case to borrow, then it seems a reasonable risk to take.
Cheers Tony! Wise words and some very sensible decisions there. Wage-wise - different schools of thought. Back in the day, if it was a choice between taking a wage or taking on more staff we'd almost always take on more staff (if we could afford to live without the wage). But depends on circumstances etc. Obviously eventually you need to prove the business *can* afford to pay you a wage (even if you don't take it). 👍👍
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May Allah guide you and help you with whatever u do
Very kind. 🤗