Why You Should Start Planning Your Exit Strategy Today

It can take longer than you think to polish your company for a sale

Written by Robert Gold

The moment is coming for all of us, says author, entrepreneur and advisor Bruce Hunter — our last day of work. And a shocking number of business owners aren’t prepared for that day.

Hunter, who previously worked as VP of Marketing and later General Manager of Kraft Canada, is now president and CEO of Lighthouse 360, consulting with entrepreneurs to increase the value of their businesses and, crucially, preparing those businesses for sale or to pass them on to the next generation. He’s also author of The Success Cage, aimed at helping entrepreneurs who are feeling trapped by the businesses they built.

“One day you’re going to exit your business,” Hunter says. “The question you’ve got to ask is whether you design your future or you’re just going to let it happen to you.” Hunter notes that 50% of business owners say they intend to transfer their business on retirement—by selling it or transferring it to the next generation—but most have done very little to set that in motion. “The last thing people want to think about is life after work,” he says.

Hunter chalks it up to a phenomenon called the “Perma-Five”: whenever you ask an entrepreneur when they’re going the retire, the answer is always five years down the road. “Five years feels far enough away so that you don’t have to deal with it today.”

But more business owners need to think about how they’re going to exit their business, and they need to do it sooner rather than later. One of the most important things they can do is find ways to extricate themselves from the day-to-day operations. Not only is this good management practice, allowing you to concentrate on the long view€“”looking around the corners and being the highbeams for the organization,” Hunter calls it—but it also increases the value of the business as you get closer to a sale: after all, the one thing that an acquirer won’t get in that transaction, by definition, is you. The more knowledge and expertise you can offload into the business, the more valuable the company is and the smoother the eventual transition.

“It takes 3 to 5 years to properly set up your business for transfer,” Hunter says. “Don’t start preparing tomorrow—start today.”

For more of Hunter’s thoughts, listen to this week’s BusinessCast podcast, which you can access using the player above or download from iTunes by clicking the link below.

For more BusinessCast podcasts, click here.

Originally appeared on PROFITguide.com