In his presentation to XPX, Rob described what he calls the “U.S. Ten Year Transfer Cycle” and explains why this transfer cycle is so important to business owners.  Rob points out that in the past three decades (the 80’s, 90’s and whatever we end up calling the first decade of this century), we have experienced a very similar economic pattern that seems to be moving in a ten year cycle. This cycle accounts for our most recent recession that began in 2008 and, hopefully, we seem to slowly be escaping.

This means that the current market is primed for buyers and will remain a ‘buyers’ market’ until 2012. Around that point, financing should flow again from banks to potential buyers, generating higher prices for companies and resulting in more of  a seller’s market. Of course there are no guarantees, but assuming this is the case how should business owners prepare?

It’s January of 2010 and many business owners are simply relieved to put 2009 behind them. Not many industries had a good year, especially given reduced credit from banks, dropping real estate values, high unemployment and no economic driver on the horizon to indicate sustained economic growth in the near term.

The question now is ‘What can you do differently to get your company, or your clients’ firms, out of this rut?’ We suggest taking the pulse of the market – including your suppliers, customers, employees and key stakeholders. The process of gaining insight can range from simple informal conversations over lunch with customers, structured online surveys for each of your employees to complete or organized strategic conversations with the company’s key stakeholders. Regardless of which process you choose, the key point is to open the lines of communications and understand how you are performing now and what you can do to improve for the future. It is vital to understand that these insights, ideas and even criticisms may help you uncover the nuggets that can help you survive or, hopefully, thrive in 2010.

There’s no better time to start the feedback process, analysis, and goal setting than right now – it is January after all.

That’s what exit strategy planning is all about; it’s creating a finish line for your business. If you are raising venture capital for a start-up, you know the investors are going to want to know how and when they are going to cash out, whether by merger or IPO.  Every owner should have an exit strategy, if simply for their own sanity. “I’ll do this for five years, then evaluate”…”I’ll prepare my business to be sold to a competitor in seven years”…”I’ll pass it on to my children after they get out of college”…”I’ll sell to my management team”…by developing a plan you will aim your business in that very direction.

Of course, these days many owners are just looking to survive. Their banks are more demanding, their customers are paying more slowly, their suppliers are hounding them for payments.  It is hard to focus on the future, the finish line, when you can’t see past this week. But without an exit plan in place, the decisions you make today may actually be pulling you further away from your goals.

So, if you do not have an exit plan, make it your personal goal to create one or get an advisor to help. Your plan will help you align your resources to get the business where you want it to be, ensure you have the right management team, and that you are targeting the correct market segments. Your company’s technology, brand, customer base, systems, processes, business model, and other intangible capital will all be affected by the exit plan. Your personal exit plan will cover your personal finances as well as transitions in your lifestyle  (”What are the tax implications of your exit options?”  ”What will I do when I am no longer running my business?”) – even more reason to think through and plan for your exit.

Remember, to get to the finish line successfully, you’ll need a plan.