"How can I plan my company exit? I haven't decided what I ultimately want to do with my company, how much money I'll need, or when I want to retire. Besides, I don't want to exit right now." If you've said this, or pondered it, you are not alone. Many business owners think they cannot plan their exits, because they are either so busy fighting daily fires, or so burdened with the thought of retiring.
Realize that in your indecision, you are making a decision. As Winston Churchill stated, "I never worry about action, but only about inaction." Do not take a relaxed approach toward the irrefutable fact that you will, in one way or another, leave your family business. Without the right planning, you could end up settling for a less than optimal exit for yourself, and for your children.
Why should you start now? Why is it so important to act now? As an entrepreneur who isn't certain about what you want, or when you want to leave, why not just wait?
In general, preparing and transferring a business for top dollar is time consuming-sometimes as long as 5 years. Preparing the business for your exit will take most of those years. If you choose to sell to workers or children, they'll need that time to earn the money to pay you for your share. Reason being, these are two groups who seldom have any assets.
Allowing more time can let you create and implement income tax-saving strategies, build value, strengthen your management team, and start a gradual transfer of ownership (not control) to family, or to key workers.
More time often equals less risk. If you don't start early, you probably won't have time to implement the right strategies, and you'll probably end up selling your business on less-than-optimal terms if you wait too long.
For example, do you remember the state of the M&A market in 2008 and 2009? Activity was almost non-existent in many business areas, and down in most. The market may not pay peak prices, or operate on your terms when you want to sell to an outside party.
If you plan on leaving your business, why not choose to make a sound exit plan and plan now? You've worked so hard to build your business, and to have little or nothing to show for it would certainly be undesirable to you. So take these steps and start today:
1. Create an exit planning team to create a plan with accountability for decisions and deadlines.
2. Work with a financial professional to determine your financial needs.
3. Fix a departure date.
4. Choose whom you want to succeed you.
5. Have your establishment valued to see if: a) you should sell/transition today; and/or b) it has the value necessary to meet your financial and other exit objectives.
The most viable exit path is not hard to accomplish. Decide to take action now to safeguard your retirement. The failure to act can potentially be fatal to a lucrative exit. So, why wait? It is certainly too critical to the success of your business exit, as well as your family and your employees, to leave to chance.
Realize that in your indecision, you are making a decision. As Winston Churchill stated, "I never worry about action, but only about inaction." Do not take a relaxed approach toward the irrefutable fact that you will, in one way or another, leave your family business. Without the right planning, you could end up settling for a less than optimal exit for yourself, and for your children.
Why should you start now? Why is it so important to act now? As an entrepreneur who isn't certain about what you want, or when you want to leave, why not just wait?
In general, preparing and transferring a business for top dollar is time consuming-sometimes as long as 5 years. Preparing the business for your exit will take most of those years. If you choose to sell to workers or children, they'll need that time to earn the money to pay you for your share. Reason being, these are two groups who seldom have any assets.
Allowing more time can let you create and implement income tax-saving strategies, build value, strengthen your management team, and start a gradual transfer of ownership (not control) to family, or to key workers.
More time often equals less risk. If you don't start early, you probably won't have time to implement the right strategies, and you'll probably end up selling your business on less-than-optimal terms if you wait too long.
For example, do you remember the state of the M&A market in 2008 and 2009? Activity was almost non-existent in many business areas, and down in most. The market may not pay peak prices, or operate on your terms when you want to sell to an outside party.
If you plan on leaving your business, why not choose to make a sound exit plan and plan now? You've worked so hard to build your business, and to have little or nothing to show for it would certainly be undesirable to you. So take these steps and start today:
1. Create an exit planning team to create a plan with accountability for decisions and deadlines.
2. Work with a financial professional to determine your financial needs.
3. Fix a departure date.
4. Choose whom you want to succeed you.
5. Have your establishment valued to see if: a) you should sell/transition today; and/or b) it has the value necessary to meet your financial and other exit objectives.
The most viable exit path is not hard to accomplish. Decide to take action now to safeguard your retirement. The failure to act can potentially be fatal to a lucrative exit. So, why wait? It is certainly too critical to the success of your business exit, as well as your family and your employees, to leave to chance.
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