You can’t prepare for what you don’t plan for. Planning your business exit well ahead of time can lead to success. There is a wide assortment of reasons that business owners don’t plan for their own exits. One of the biggest reasons is being caught up in the day-to-day aspects of running the business. Other reasons and fears include having to regain business value lost during the economic downturn, fear of conflict, family dynamics, no personal plan for the future, employees can’t handle the business, and co-owners with different goals.
Learning about and planning your business exit well ahead of time has multiple benefits including gaining control over the process and addressing those concerns. A good exit plan involves matching your goals and objectives with the best sale or transfer options and the exact method with which to achieve a successful transition. Not having an exit plan can risk your business’s future and the financial security of you and your family.
Not planning for your exit in advance can result in not being able to afford to sell your business and retire. Part of your exit planning needs to address whether you will be able to live out your years in comfort. Can you do what you have dreamed of doing, and what if the proceeds from your business aren’t enough? Advance planning can address these questions. Taxes and fees can be addressed and minimized at this time as well.
A last-minute exit will minimize your options. These exits can come about through burn-out, disability, illness, or death. These untimely events can result in your business value being significantly diminished. It is also much less likely that the business will be able to continue without you, which can impact you and everyone who is dependent on the business for their livelihood.
A family business is much more likely to stay intact with an exit plan in place. The majority of family business owners think their business will pass on to the next generation without any planning. This isn’t true. Fewer than 30% of family businesses successfully transfer from the first to second generation. Family businesses can create additional challenges. Planning one’s exit can allow for grooming one’s successor and preventing strained relationships within the family. A careful exit strategy will help ensure family harmony, legacy, and a sound financial future.
Plan your business exit well ahead of time. It will help give you the best options and meet your financial and personal goals. Having the plan in place will also give you peace of mind. Determine the best strategy for your business and situation with your business advisors. Put your plan in place with Shoffner & Associates, counselors to small business.
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Freya Allen Shoffner, Esq.
Shoffner & Associates
Counselors to Small Business and Families.
Give Freya a call at (617) 369-0111 TEXT US (413) 207-6219 or email fashoffner@shoffnerassociates.com
