b'Exit strategy 4.8 Exit provisions will be needed to enable the authority to realise its investment in the company (and thereby extract value) and to protect its investment if the company fails to perform in accordance with the agreed objectives.The key issues to be considered are: when does the exit occur and how does the exit occur? These are matters which are effectively under the shareholders control, and can be dealt with in the relevant corporate documentation (such as a shareholders or members agreement). Establishing a need 4.9 One of the starting points in any trading activity is to establish the need and market for the service involved. The level of planning associated with establishing this will depend on the nature of the trading activity. It is generally true that smaller, more marginal trading will require less planning. A substantial commercial operation will need significant scrutiny and justification. A good starting point is to ask how the need has arisen. Was it the local authoritys idea to provide these services, or has a request been made by the public? Why are the services not already available to the public? A local authority will always want to demonstrate the wider public benefit to the community in undertaking these activities, in line with its relevant strategies. The business plan 4.10 A local authority engaging in trading using section 95 must produce a business case. It is also highly advisable to produce a business plan which builds on the business case. This is a document that demonstrates that the relevant commercial issues have been considered. Included in this might be a definition of the services to be provided, the potential clients for those services, the costs associated with their delivery, the necessary organisation of the work and any income that might be generated. Business planning has significantly improved in local government over the last decade or so, and it is essential to good trading practice. The business plan should be updated annually to reflect changes to the commercial environment. DCLG guidance on developing a business plan must be considered. Risk assessment and analysis 4.11 It will be up to the local authority to determine what the risks are in relation to any particular activity. However, many of the risks will be similar for different activities and one idea would be to brainstorm these at an early stage of planning. Risks might include the:55'