Exit planning should be a key part of every business owner’s life. It usually takes 3-5 years, from planning to exit, to leave a company. In tough times, it might seem like exit planning should take a backseat to other endeavors. However, a wise exit plan can prepare you for whatever lies ahead, offering flexibility when the economy is in flux. Here’s what you need to know as you design your company’s exit plan.

Address the Finances
Steady cash flows make successful businesses. Now is a great time to rejuvenate your model to ensure you have a sustainable cash conversion cycle. Eliminate discretionary spending, and weigh which assets might be liquidated. Consider merging roles where doing so is possible without compromising quality or stressing quality team members. If possible, delay capital additions. When acquisitions are unavoidable, look at the cost of these investments as compared to their long-term value.

Review the Books
You must make projections and forecasts, then compare them against actual cash flow at regular intervals.

Continue to monitor operating costs and other financial expenditures, not just revenues and sales. It’s also helpful to seek out flexibility in the terms for any necessary financial obligations. Keep a close eye on accounts receivable and payable. Review the aging summary report for both at least weekly so you can take swift corrective action when the circumstances demand it.

Investigate Taxes and Finances
Many owners can’t bear the thought of taxes and complex financials, but ignoring these issues will not make them disappear. Cultivate strategies that manage losses, or segregate them to a single tax year. Modifications in the CARES Act may help, so make sure you have expert insight.

Know That History Repeats Itself
Economic booms never last forever. When projecting and forecasting profits and losses, draw on the lessons of the past. It’s always wise to have a cash buffer in place in the inevitable event of a future downturn. Develop succession plans for key roles, since these roles may shift during uncertain times.

Manage Vendors, Customers, and Suppliers
Consider using early pay-off discounts to get customers to fully pay financed purchases. A cash on delivery system can also help you avoid the problem of inventory going out without cash coming in.

You may need to evaluate your economic yield against the human power and losses associated with certain customers that demand significant resources. Be mindful also that vendors have taken significant financial hits. They may be willing to trade in less conventional ways, such as offering discounts for full upfront payments.

Keep Your Team Happy
Happy employees are loyal, even during tough times. They play a key role in maintaining and improving cash flow, customer relationships, and daily operations. In many cases, a buyer won’t even consider an investment without knowing there’s a strong set of team members, especially managers, in place. Your staff adds value. So treat them well. They are an investment in the future of your company, especially during tough times.