Prepare To Exit

Exiting a business with financial success takes knowledge and planning.

Change is an inevitable aspect of every life cycle. With business, the final evolution can take a variety of forms. You may be ready to retire and pass the business on to a family member. Perhaps your goal is to sell to outside investors and use the proceeds as a retirement nest egg. Or the business may have declined so much that the best exit is a legal dissolution of your company. These tools and resources will help you manage the big decisions ahead for a successful transition.

Why you (and your business) need an exit strategy

A recent survey found that less than 30% of family-owned businesses have a succession plan in place. While most business owners would like to see their business remain in the family, less than 30% of family owned businesses will be passed on to the second generation and only 12% will be passed on to the third generation. Read More on Why you (and your business) need an exit strategy
Defining your goals and expectations for the exit plan

The starting point in developing an exit plan for your business is to define your long-term personal and professional goals. Of course, there are many competing interests to consider in the process. In addition to your personal goals, you need to include key employees, partners, and family members in your decision making. To maximize the effectiveness of the Exit Plan, all of these parties should have input into the development of the plan. Read More on Defining your goals and expectations for the exit plan
Goals and expectation of others in the exit plan

The details of your exit plan have an impact on many stakeholders. These interested parties include the business owner’s spouse, children, company employees, and possibly business partners. Each of these groups has specific needs and expectations to consider as you prepare your Exit Plan. Read More on Goals and expectation of others in the exit plan
How much do you need to retire?

For an exit plan to be successful, one of the first things you need to do is to complete an assessment of the owner’s financial needs in retirement. In preparing an exit strategy, the goal of this calculation is to determine the amount of money the owner will need to get from the business upon exit. Read More on How much do you need to retire?
What are the most common exit strategies?

There is no one ideal method of exiting a small business. Unfortunately, most small business owners begin their retirement exit strategies by reviewing the legal and tax consequences of the alternatives. When this happens, they end up with a plan that is technically solid but will often not meet their personal goals and needs. Read More on What are the most common exit strategies?
Selecting the right successor for your business

Many believe that management succession planning is only necessary if the business owner wants to ensure that his or her company continues after retirement. Obviously, management succession planning is important for those who want to pass the business on to their heirs, sell the business to a management group, or if the owner wants to reduce involvement in the day-to-day operations of the business while maintaining ownership. Read More on Selecting the right successor for your business
The CEO Owner’s personal challenge – how to let go

The single biggest challenge in the implementation of a succession plan happens when the CEO Owner transfers decision-making authority to the next generation of management. He or she built the business from its beginning. They have put many years of hard work into the business and its success can largely be attributed to their decisions. Read More on The CEO Owner’s personal challenge – how to let go
How to retain key employees during the transition

Transition in ownership of a company creates a period of instability for its employees. While they may be happy for your ability to move on to the next chapter in your life, they do not know what the impact of this change will have on their life. Will the new owner keep all of the current employees? Will there be changes in pay and benefits? What will the changes in culture be? Read More on How to retain key employees during the transition
What does the buyer want to see in your business?

After you have made the decision that you want to sell your business, the next step is to consider the buyer’s point of view in purchasing your company. When looking to buy a business, most purchasers are looking for ones that have a predictable level of risk and reward. They are looking for a company that will generate a predictable cash flow with the potential for future growth. Read More on What does the buyer want to see in your business?
How do you value your business?

If you have made the decision to sell your business, one of your biggest challenges will be to determine its value. Most entrepreneurs have worked hard for several years to build their business, and it is often the most valuable asset they own. Read More on How do you value your business?