This is a prudent and often overlooked question for business owners. As the events of the past 5 years have demonstrated, there are many factors that are outside of our control that will ultimately affect your business.
These threats could be economic, competitive or technological in nature. The collapse of the housing market for an architect, the outsourcing of jobs overseas for a manufacturer or the e-commerce business model for a book store are all recent examples.
A good exit plan continuously looks for and evaluates these threats on an annual basis. It puts contingencies in place that will allow an owner to either overcome them or exit their business before its value is significantly diminished.
This requires an honest and objective evaluation the business itself, the industry in which it operates and overall economic trends. Due to an entrepreneur’s emotional attachment to their business it is often difficult, if not impossible, for them to do this evaluation themselves. A good exit planner will help a business owner “see the forest through the trees” and make prudent decisions before it is too late.