Ben Franklin is credited with saying, “If you fail to plan, you are planning to fail.” And Warren Buffet once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.” These sayings are great reminders for business owners looking to exit.
For most business owners, their company represents the lion’s share of their net worth. It also represents their life’s work and a legacy worth protecting. Getting their exit right takes some planning.
However, coordinating all of the business, management, financial, legal, tax, estate, family, legacy, market and personal considerations is complicated and emotional for owners. And few have the time (or the training) to tackle all of this on their own, while running their business. Therefore many owners procrastinate when it comes to exit planning.
Failing to Plan
Failing to prepare for an exit can result in a business owner …
- being forced by unplanned circumstances to exit involuntarily in a bargain sale, sale to a competitor or liquidation
- wasting time and money on one or more sale transactions that fail to close
- undervaluing their business
- giving up more of the proceeds in taxes than necessary
- prolonging retirement and failing to achieve their retirement goals
- failing to leave a lasting legacy
- burdening their family with matters that they were unprepared for
Whether you intend to transfer your company to family, partners, managers, a third party, private equity or a strategic buyer, exit planning is well worth it.
Eight Benefits of Exit Planning
- Identifies value and transferability gaps – a key starting point
- Makes your company more attractive to buyers
- Increases value for all shareholders
- Produces a smoother management transition
- Minimizes risks
- Minimizes taxes
- Establishes clear priorities, strategies and time frame
- Prevents costly mistakes
On a personal level, exit planning settles your mind and re-energizes you by focusing your efforts and giving your work greater purpose.
Fortunately, you don’t have to learn the ins and outs of exit planning. This is where firms like Exit Strategies come in.
Contact Al Statz at 707-781-8580 or email firstname.lastname@example.org for more information on simple and straightforward business preparation. We can help you create a plan, and coordinate with and introduce you to the other professionals you’ll need. As always, everything we discuss will remain confidential.