They say you should be thinking about your exit strategy the moment you start your business. There is every indication that savvy business owners actually do this.

I recently developed and moderated a presentation entitled “Anatomy of an Acquisition” for the Collision Repair Executive Symposium (CRES) at NACE in Detroit. We went through an acquisition looking at both the buyer and the seller’s deliberations through each phase of the transaction.

Will Johnston of Service King “played” the buyer, a regional MSO with 16 locations in this hypothetical acquisition. If you were there, you know that twice within the first 10 minutes Will talked about his exit strategy as it related to growth and ultimately, enhancing the value of his business in anticipation of a liquidity event somewhere down the road. It illustrated the point: the time to think about the future is now.

Currently, the industry looks a bit like the Wild West. The influx of private equity money and high profile acquisitions involving the industry’s largest consolidators has created a strange brew of excitement and anxiety. With it has come a new transparency, even openness to the “little chat” — owners meeting with potential buyers wanting to get a feel for how their business might be valued. (In fact, there are those who are simultaneously talking to consolidators and larger enterprises who may be interested in acquiring them, as well as private equity groups and other investors who can enable them to better compete by growing larger on their own.)

There is nothing wrong with this. In fact, it’s smart. This is how you gather market intelligence. In the meantime, what about the most valuable asset in your business –your people? Unless you’ve been able to keep your employees in a hermetically sealed bubble (aluminum clean room?), it’s likely your team, especially your key people, know what’s going on in the industry. What they may not know is what your plans are, and this can be unsettling.

Owners who openly discuss their exit strategy or a future sale (even years down the road) also recognize that retention of key players is critical to building value in the business. Many forward-thinking owners offer options in the business, or stay bonuses and at very least, performance-based bonuses, to keep key employees incentivized and engaged.

How transparent you are with your employees about your future plans is a matter of personal preference. In the absence of information, employees may fill the void with incorrect suppositions, conjecture or rumors. As a business owner, I’d rather fill that void.

— Marcy