Succession was the topic for our latest Deep Dive webinar which we hosted earlier this week. More than 150 people registered for the event, highlighting how…
Whatever the intention, ‘exit planning’ sounds conceptually simple, but in practice it tends to take far more to achieve it than may be expected from the outset. Whether the objective is to withdraw troops from a war zone, ‘exit’ from a business, or return from ‘lockdown’, they all need careful planning and the consequences of getting it wrong can be significant.
The key points are therefore to ensure that it is carefully planned, suitably in advance, to maximise the chances of achieving a successful outcome. Whilst the expression ‘exit planning’ is normally reserved for few events with limited application, it will become far more commonplace as our exit from lockdown will impact on a significant proportion of the population, one way or another.
The underlying approach to any exit planning should always be followed, including time to consider the wider implications of actions and inactions and their knock-on effects.
Objectives, intentions and timeframe
The key criteria are to start with a clear objective/intention and timeframe. Again, this sounds simple, but in practice careful consideration of the steps along the way and related matters should also be taken into account.
A business owner may want to sell his or her company and retire, but should both happen at the same time? Is it the intention for each to occur in one go? The implications of having worked long hours every week for many years and then stopping abruptly may not have been fully considered – the feeling on the following Monday morning may be financially great, but what about the loss of connectivity with staff, the business and the way of life that has been so integral for so many years? How will all the time now be spent and what will be the implications on family life?
Once the objectives have been established (and agreed where appropriate – although different stakeholders may have alternative views and there may need to be quite an exercise to gain agreement or a compromise is reached), it then needs to be considered whether they are realistic, and in what timeframe. For example, whilst many people would clearly like ’lockdown’ to be removed completely, as soon as possible, there will also be people who have a different view. Many may want a more phased approach – those businesses that have seen demand for their products or services rocket during the crisis, or those that will take some time to be able to get back on their feet, and others that have actually preferred working from home.
From a business perspective an owner may need to recognise that there are aspects of the business that are dependent upon them – whether in terms of relationships with customers or suppliers, technical know-how or management and strategic skills. Removing all of this from the business without suitable handover is unlikely to be attractive to a purchaser of the business and these points may be so significant that they become a deal breaker.
Consideration of the practical aspects then needs to be undertaken. Rushing this stage will mean that the side-effects are likely to be missed. In the same way that a business owner should consider and prepare for the change on their whole life, post-lockdown planners will need to mind-map the implications of actions and check that potential downsides are limited. Logistically, many businesses won’t just be able to ‘start again’ straight away with supply chains having been disrupted or broken, or people and equipment being in different/wrong places.
A business owner won’t be able to hand over everything in one go, it will need undertaking in stages, and so will our exit planning from lockdown.
How can we help?
Whatever you are intending to do or exit from, ensure that you spend sufficient time planning for it in advance, taking input from experts and those that may have done similar things before. Whilst we may hope for a rapid exit from lockdown, let’s encourage and ensure that there is adequate planning beforehand.
We have created a guide to exit planning, with pertinent questions that need to be asked. As always we are here to help, so please do not hesitate to contact us if you have any questions.