- Client Login
Why Exit Planning is Good BusinessSubmitted by Mike Tarrant, CFP® on April 15th, 2019
We have all heard the adage that most businesses do not survive to the third and fourth generation.
If that is indeed the case, then what is your pharmacy’s ‘transition of care’ plan?
I think many pharmacy owners feel like moving forward with an exit plan equates to slapping up a ‘For Sale’ sign and waving the white flag, but nothing could be further from the truth!
In my 25+ years of experience doing financial planning for pharmacists and pharmacy owners, I have noticed that an exit plan – when done right – is just a good business plan. It can cast a vision that your stakeholders can buy into, propelling the business strategically to new heights.
I can tell you about a successful father/son transition, a father/daughter transition, owner/key employee buyouts, younger pharmacists grooming successors, owners finding buyers when the family would not step in, older owners transitioning to younger key employees groomed for leadership, and of course, those who sold to chains because they needed a fast sale or did not plan for a successful departure and defaulted to their best worst option.
The bottom line is that everyone’s situation is unique, and effective exit planning takes these differences into account.
Consider these common themes from the examples I just mentioned:
- Successful owners did not live on all their profit; they invested in their future.
- Successful owners thoughtfully and intentionally made a personal plan and worked it.
- Successful owners periodically valued the business, identifying key metrics, risk factors, and competition.
- Successful owners communicated the plan to stakeholders—family, employees, key leaders.
- Successful owners hired leaders, not managers, for the next level.
- Successful owners organized their business so they could function more like a consultant and less like the Pharmacist in Charge.
What would it look like if your family, employees, and key leaders knew the goals and objectives of the business and could organize their lives around it?
I suspect they would be excited about the future, embrace the importance of their roles, and ultimately feel more secure and motivated.
In my experience, exit planning results in establishing a clear vision your team can buy into - one that has the potential to produce incredible results! Alone you can go fast, but together, you can go far.
If the exit planning process sounds like the kind of financial plan you want for yourself and your business, shoot us an email or give us a call.
We're here to help.