"How can I plan my business exit? I haven't decided what I ultimately want to do with my business, how much money I'll need, or when I want to exit. Besides, I don't want to exit right now." If you've said this, or pondered it, you are not alone. Many entrepreneurs think they cannot plan their retirements, because they are either so busy fighting daily fires, or so overwhelmed 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 passive approach toward the inevitable fact that you will, at one time, leave your company. Without the right planning, you could end up getting a less than ideal exit for yourself, and for your family.
Why not just wait? If you are an entrepreneur who is undecided about what you want, or when you want to retire, why is it so critical to decide to act today?
Preparing and transferring a company for top dollar takes time (as long as 5 years). If you want to sell to children or employees (two groups who rarely have any money), they'll need that time to find the money to pay you for your interest.
You'll minimize the risks if you leave extra time. More time can be used to increase value, create and execute income tax saving strategies, improve your management team, and begin a gradual transfer of ownership (not control) to key workers or family.
More time usually equals less risk. If you don't begin early, you probably won't have time to develop the right strategies, and you'll likely 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 practically non-existent in many business sectors, and down in most. The market may not pay high prices, or operate on your terms when you are ready to sell to an outside party.
If you plan on leaving your business, why not decide to make a sound exit plan and plan now? You've worked so hard to develop 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. Develop an exit planning team to establish a plan with accountability for decisions and time limits.
2. Work with a financial planner to determine your financial needs.
3. Fix a departure date.
4. Choose whom you want to succeed the business.
5. Have your establishment valued to see if: a) you should sell/transition now; and/or b) it has the value needed to meet your financial and other exit goals.
The most viable exit path is not difficult to achieve. Decide to take action now to safeguard your future. The failure to do this can perhaps be fatal to a successful exit. So, why wait? It is simply too important to the success of your business exit, as well as your family and your employees, to ignore.
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 passive approach toward the inevitable fact that you will, at one time, leave your company. Without the right planning, you could end up getting a less than ideal exit for yourself, and for your family.
Why not just wait? If you are an entrepreneur who is undecided about what you want, or when you want to retire, why is it so critical to decide to act today?
Preparing and transferring a company for top dollar takes time (as long as 5 years). If you want to sell to children or employees (two groups who rarely have any money), they'll need that time to find the money to pay you for your interest.
You'll minimize the risks if you leave extra time. More time can be used to increase value, create and execute income tax saving strategies, improve your management team, and begin a gradual transfer of ownership (not control) to key workers or family.
More time usually equals less risk. If you don't begin early, you probably won't have time to develop the right strategies, and you'll likely 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 practically non-existent in many business sectors, and down in most. The market may not pay high prices, or operate on your terms when you are ready to sell to an outside party.
If you plan on leaving your business, why not decide to make a sound exit plan and plan now? You've worked so hard to develop 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. Develop an exit planning team to establish a plan with accountability for decisions and time limits.
2. Work with a financial planner to determine your financial needs.
3. Fix a departure date.
4. Choose whom you want to succeed the business.
5. Have your establishment valued to see if: a) you should sell/transition now; and/or b) it has the value needed to meet your financial and other exit goals.
The most viable exit path is not difficult to achieve. Decide to take action now to safeguard your future. The failure to do this can perhaps be fatal to a successful exit. So, why wait? It is simply too important to the success of your business exit, as well as your family and your employees, to ignore.
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