- The business experiences a sudden, catastrophic loss and all of the owner’s financial eggs are in the business.
- A perfect buyer suddenly appears and makes a fantastic offer, but the owner cannot consummate the sale due to prohibitive (and avoidable, with planning) tax cost and a lack of sufficient independent retirement income.
- An agreement to sell is made with a qualified buyer, but the buyer reduces the offer after finding aged accounts receivable and owner loans on the books. In short, the company’s books were not in order.
- An unanticipated catastrophe hits the business and because the owner failed to have a contingency plan in place, or existing support from legal/financial advisers, the business cannot survive.
- The sole owner dies or becomes permanently disabled, without sufficient (or no) life or disability insurance, no business succession plan, and no estate plan.
- One of the partners dies or the partners have an irreconcilable falling out and there is no clear buy-sell agreement – either of these situations commonly result in expensive litigation, and value erosion.
- The business is struck by a huge, legitimate legal claim with insufficient liability insurance in place thereby irrecoverably impacting the enterprise value and marketability.
- One of the company’s key employees quits, taking the best customers and other employees with him because the company has no non-compete agreement or retention plan to prevent this from happening.
- The owner wishes to retire and sell the business to a family member but there is insufficient time to make the transfer and pay minimal taxes.
- The owner has selected a capable non-family heir apparent, but has no written succession plan in place and the heir apparent cannot realistically fund the transfer.
https://www.exitstrategiesgroup.com/wp-content/uploads/2022/01/exit-horiz-1.png 0 0 Jim Leonhard https://www.exitstrategiesgroup.com/wp-content/uploads/2022/01/exit-horiz-1.png Jim Leonhard2014-07-23 13:33:432016-12-20 15:54:29Is Your Business Prepared for Sale?
Serious potential consequences await owners who neglect to prepare their business, and themselves, for a future sale or transfer. Here are ten exit planning mistakes to avoid:
All of these mistakes can be avoided with a well thought out exit plan developed in advance of a sale and updated frequently.
For more information about preparing to sell and exiting your California-based business successfully, please contact Jim Leonhard at 916-800-2716 or firstname.lastname@example.org.