When Developing a Business Exit Plan
It takes a lot of love and sacrifice to build a business. Many times, it is the investment of a lifetime. Whether you plan to sell your business in an acquisition at some point or pass it on to a successor, a thoughtfully curated exit plan makes sense regardless of your exit strategy. In developing the right exit plan for your individual situation, it's critical to begin with the end in mind, regardless of whether it's easier said than done.
learn why it’s never too early to think about exit planning
An exit strategy provides a comprehensive roadmap for business owners so that they can exit on their own terms. Exit plans often cover matters such as personal, financial, legal, and tax-related issues when ownership changes in a privately owned company. Putting a plan of action in place allows for a clear and effective transition. In other words, it makes no difference whether the business wants to move today or several years from now. Exit planning is often delayed until the transition is imminent. A lack of advance planning in these cases often results in missed opportunities.
When developing an exit plan, consider the following points:
Do you want to sell your business to an entity or an individual?
When would you like the transition to take place?
Can you tell me how much your business is worth and how much you would like it to sell for?
Upon the sale of the business, how much money would you receive after taxes?
Can you live comfortably or retire with the final monetary gain after taxes?
various business exit strategies and their benefits
When crafting and refining your exit plan, these are a few of the most critical questions to ask. An optimal outcome is influenced by a number of factors that are unique to each situation. The sooner you outline your exit plan, the more time you have to refine your succession plan. As you create the plan, you can modify it as necessary. It happens because transition time enables you to activate the next steps in the plan. In the process of growing a business, a plan can provide much-needed clarity and direction.
All aspects of a business must be run with true intention if true wealth is to be created. Business owners find fulfillment in business development by investing time in the creation of a meaningful and lucrative experience. As entrepreneurs, we will never be able to recover the time we invest. However, we can ensure that this time is well spent planning for the next chapter and season. While planning for the end can seem overwhelming, if this process is managed along the way, a thoughtful ending can lead to an intentional and renewed beginning.
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