Business Exit Planning

Business Exit Planning – Planning with the End in Mind

There comes a time for every small business owner to exit their business. Properly positioning your business to be sold can be one of the most rewarding aspects of being a business owner, but also one of the most challenging. Failing to plan for the sale or succession can lead to a disappointing, and sometimes catastrophic, ending to what has been an otherwise successful and fulfilling business career.

When it comes to developing a business exit plan, those who have worked with some kind of business or strategic plan in the past are at an advantage. Regardless, putting together a workable exit plan is not an impossible task.

Start with a self-evaluation of your personal and business needs, goals and realities. The three areas to consider are:

Owner Readiness

Company readiness

Wealth preservation

Owner readiness

Are you personally ready to sell? Selling, or even planning the sale of your business, can be a very emotional event. Giving up something that has been part of your identity and self-image for what may have been decades is never easy. Start to prepare emotionally by asking yourself: How will I feel when I sell my business?

The planning process should allow you to identify and consider all business exit or succession objectives and alternatives. If you are considering the sale or transfer of ownership to a family member, there are additional issues to be addresses as opposed to sale to a third party.

Company readiness

Evaluate your liabilities and personal obligations. Here we are talking about current loans, future tax liabilities, legal obligations and even future financial commitments. Ask yourself what funds will be needed and available to meet these obligations both during and after the sale of the business. This assessment will help determine if you are financial position to sell, or when you will be.

Wealth Preservation

Complete a long-term financial plan. The financial plan generally looks at current assets and any assets created from the sale of the business. These assets are then compared to a number of factors like inflation, lifestyle, age and return on investments to determine if the assets will be sufficient for you to retire comfortably as a result of the sale.

How to start

Taking the first step is not easy. One of the reasons why business owners’ delay or neglect entirely the exit planning process is that they are not sure how to start the process or who to call for help.

We can provide you with a no cost, no obligation evaluation of your business and personal financial situation to identify and explore potential business succession and exit planning opportunities.

Our Business Succession Evaluation is a tool to provide you with a comprehensive, confidential analysis of your current situation or existing business plan by a qualified business planning expert. The process begins with considering your business and financial objectives and goals.

Contact us at Checkbox to get your plan in place.

Sources:

Six Steps to Small Business Success

Jenkin, R. The 10 Trillion Opportunity