5 Steps to Exit Your Business
(Are You Ready to Exit Your Business?)
A well designed business plan must ultimately plan your exit. It requires you to look past the everyday to what you would personally like to get out of your business. By developing this clear picture, you will be able to identify what you need for financial independence as well as the systems and processes to deploy in order to help meet your objectives and protect your family.
A good plan will also provide flexibility for contingencies.
We’ll help you assess what steps you need to take. Contact us today!
5 Steps for Assessing Your Readiness to Exit Your Business:
Step 1: Set Objectives
- Do you have a written strategy for exiting your business that is integrated into your personal financial planning objectives?
- How much will you need out of your business net of taxes to sustain your standard of living?
- Do you have sufficient resources, independent of your business to reach and maintain your financial independence?
- Have you established the date you wish to exit?
Step 2: Build Value
- Do you know the current value of your business?
- Do you know the projected cash flow your business is likely to generate over the next 3-5 years?
- Do you have a management team capable of running the company in your absence? Are they incentivized to stay with the company when you exit?
- Do you have systems and processes in place so that your business can run efficiently in your absence?
- Have you implemented effective financial controls to measure and minimize expenses and maximize profits?
Step 3: Identify Exit/Transfer Options
- Will you be retaining for a key employee or family member, selling to a 3rd party, or liquidating?
- Does your successor have the skills and knowledge necessary for continuation of the business?
- Have you estimated your tax liability? Maximized tax efficiencies?
- Have you considered contingencies?
- If you have children interested in your business, have you considered ways to equalize your estate for children not in your business?
- Have you considered family harmony?
Step 4: Evaluate Options
- Have you identified which transfer method or combination of methods works best for your situation?
- Do you have a single point contact person who can coordinate your transfer and collaborate with your team of advisors across all disciplines … tax, legal, and financial?
- Is your team of advisors knowledgeable in business transfers?
- Have you determined what purpose you are moving towards after you exit your business?
Step 5: Implement and Integrate
- Have you determined a timeline for putting your plan into action?
- Do you know who is responsible for what and by when?