"When do I want to leave my family business, what do I eventually want to do with it, and how much money will I need? How can I plan my retirement when I don't really want to exit right now." If you've said this, or thought it, you are not alone. Many business owners cannot plan their exits because they are either burdened with the thought of exiting, or are too busy fighting daily issues in their business.
As Winston Churchill observed, "I never worry about action, but only about inaction." Know that in your indecision, you are making a decision. You may be deciding to settle for a least profitable exit for yourself and for your family, if you take a passive attitude toward the irrefutable fact that you will-one way or another-leave your family business.
Why can't you just wait? If you are an owner who isn't sure about what you want, or when you want to leave, then why is it so important to decide to act today?
In general, preparing and selling a business for top dollar takes time-sometimes as long as 5 years. Preparing the company for your exit will take most of those years. If you decide to sell to workers or children, they'll need that time to earn the money to pay you for your share. Reason being, these are two groups who rarely have any funds.
It takes time to create and implement income tax-saving strategies, build value, strengthen your management team, and begin the gradual transfer of ownership (not control) to key parties or children.
If you wait too long, you most likely won't have time to execute these strategies and you'll probably end up selling your company on less-than-optimum terms. Having more time often equals more reductions in risk and more options.
The market may not yield top prices, or operate on your time line when you want to sell to another party. A good example of this happened in 2008 and 2009. The mergers and acquisitions markets were basically non-existent in many company sectors, and down in nearly all.
For these reasons you should start developing a viable exit strategy and plan accordingly. If leaving a company you've worked so hard to build, and having little or nothing to account for it is unacceptable to you, then start today by taking the following steps:
1. Create an exit planning team to forge a plan with accountability for decisions and deadlines.
2. Work with a financial advisor to decide your financial needs.
3. Fix a departure date.
4. Choose whom you want to succeed you.
5. Have your establishment valued to see if: a) you should sell/transition now; and/or b) it has the value needed to meet your financial and other exit.
It is not difficult to decide to do something soon to create the best possible exit path. The success of your company exit is simply too important to you, your family and your workers to ignore. Why wait? The failure to act can prevent a lucrative exit.
As Winston Churchill observed, "I never worry about action, but only about inaction." Know that in your indecision, you are making a decision. You may be deciding to settle for a least profitable exit for yourself and for your family, if you take a passive attitude toward the irrefutable fact that you will-one way or another-leave your family business.
Why can't you just wait? If you are an owner who isn't sure about what you want, or when you want to leave, then why is it so important to decide to act today?
In general, preparing and selling a business for top dollar takes time-sometimes as long as 5 years. Preparing the company for your exit will take most of those years. If you decide to sell to workers or children, they'll need that time to earn the money to pay you for your share. Reason being, these are two groups who rarely have any funds.
It takes time to create and implement income tax-saving strategies, build value, strengthen your management team, and begin the gradual transfer of ownership (not control) to key parties or children.
If you wait too long, you most likely won't have time to execute these strategies and you'll probably end up selling your company on less-than-optimum terms. Having more time often equals more reductions in risk and more options.
The market may not yield top prices, or operate on your time line when you want to sell to another party. A good example of this happened in 2008 and 2009. The mergers and acquisitions markets were basically non-existent in many company sectors, and down in nearly all.
For these reasons you should start developing a viable exit strategy and plan accordingly. If leaving a company you've worked so hard to build, and having little or nothing to account for it is unacceptable to you, then start today by taking the following steps:
1. Create an exit planning team to forge a plan with accountability for decisions and deadlines.
2. Work with a financial advisor to decide your financial needs.
3. Fix a departure date.
4. Choose whom you want to succeed you.
5. Have your establishment valued to see if: a) you should sell/transition now; and/or b) it has the value needed to meet your financial and other exit.
It is not difficult to decide to do something soon to create the best possible exit path. The success of your company exit is simply too important to you, your family and your workers to ignore. Why wait? The failure to act can prevent a lucrative exit.
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