Every business owner will eventually exit their business – one way or another. Being prepared with a vision of how that will look enables you to create and execute a sound plan that is most beneficial for you, your family, and your company moving forward.
Yet many business owners don’t start planning well ahead of time, even though the exit from their company may be the single largest financial transaction of their life. How you exit will also likely determine your family’s lifestyle as well as whether your estate and family assets are well-protected.
Many owners tell me they expect exit planning to be too complex, that it’s too far in the future to think about right now, or often that they simply don’t know where to start. The good news is that it starts with asking yourself a few questions (see Decisions, below), then read on to learn about resources available on my website to help you gauge your readiness for exiting and provide you with some simple steps you can take to move forward.
Decisions
Do you have answers to the following basic questions? If not, give them some thought, write down your answers, and you’ve got a start on exit planning.
- When do you want to exit your company?
- How will you ensure your estate and family’s assets are protected?
- Who will take over the company when you retire, become disabled or die?
- Do you want to remain in control, or pass the company on to your children or key employees?
Why Do You Need an Exit Plan?
This 2-minute video explains.
Exit Planning: Where Do You Stand?
If you’ve thought about exiting your business but haven’t formally started a plan, you’re not alone. Here’s a simple questionnaire, from which you’ll receive a customized report, that will help you determine where you stand in the exit planning process.
Exit Planning Process
The 7-step approach to Exit Planning was developed by attorney and author, John H. Brown, more than 20 years ago and was adopted by the Business Enterprise Institute. The steps include:
- Defining your exit objectives
- Establishing your business and personal financial resources
- Building and preserving your business value
- Assessing whether you’ll sell your company to a third party
- Assessing whether you’ll transfer your ownership to insiders
- Understanding business continuity
- Protecting your personal wealth and managing estate planning
Want to take a deeper dive? Explore the various aspects of exit planning and where your focus may need adjustment. As a member of BEI’s network of Exit Planning Professionals, I’m able to provide this exit planning assessment tool. Complete it for a personalized report.
Value Driver Analysis
Business value is a primary factor in a successful exit. You must first determine your financial objectives – what must your company be worth when you exit to live the life you envision? Then you must know the value of your company today. Finally, comes the strategy to close the gap.
Complete our value driver assessment to help you decide what you need and want as your primary ownership objectives, quantify the value of your current resources, determine the gap between what you need and what you have, and develop a plan to increase your company’s value and cash flow. You’ll receive a customized Value Driver Report.
Build Your Business and Your Future
Once you have some basic data and make a few basic decisions about your future, you’re on your way. Some business owners worry that exit planning will take too much time away from running their business. But many of the same actions go into building your business and your future. I encourage you to visit our Exit Planning Peer Advisory Board (PAB) to learn how a value-based management approach accomplishes both simultaneously.
The PAB meets every other month and provides a safe space for business owners to share challenges, ideas, and experiences. Then every other month, members meet, one-on-one, with me to take a deeper dive into their individual situations.
Contact me to set up a complimentary consultation to review reports generated from the resources above, to learn more about exit planning and the Peer Advisory Board, or to be a guest at our next PAB meeting.