Many executives are either burdened with the thought of exiting, or are so busy fighting daily business issues that they think they cannot plan their exits. "I haven't decided what I actually want to do with my company, or how much money I'll need, or when I want to exit, so how can I plan my exit? Besides, I don't want to exit right now." If you've thought this, or said this, you are not alone.
Realize that in your indecision, you are making a decision. As Winston Churchill observed, "I never worry about action, but only about inaction." Do not take a relaxed approach toward the inevitable fact that you will, in one way or another, leave your family business. Without the right planning, you could end up getting a less than optimal exit for yourself, and for your children.
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, why is it so critical to decide to act now?
Preparing and selling a business for top dollar takes time (as long as 5 years). If you want to sell to children or employees (two groups who rarely have any money), they'll need that time to earn the funds to pay you for your interest.
You'll minimize the risks if you leave extra time. More time can be used to increase value, design and execute income tax saving strategies, strengthen your management team, and begin a gradual transfer of ownership (not control) to key employees or children.
More time often equals greater reductions in risk. If you don't start early, you probably won't have time to implement the right strategies, and you'll likely end up transferring your business on less-than-ideal terms if you wait too long.
The market may not be paying peak prices when you are ready to sell to another party, and may not operate on your terms. Activity could be non-existent in many business areas. Remember the state of the Mergers and Acquisitions market in 2008 and 2009.
If you plan on leaving your family company, why not choose to develop a sound exit plan and plan now? You've worked so hard to build your business, and to have little or nothing to show for it would surely be unacceptable to you. So take these actions and begin now:
1. Develop an exit planning team to forge a plan with accountability for decisions and deadlines.
2. Work with a financial professional to determine your financial needs.
3. Determine an exit date.
4. Decide whom you want to succeed you.
5. Have your company 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 goals.
The best possible exit path is not difficult to accomplish. Decide to take action now to safeguard your retirement. The failure to act can perhaps be fatal to a profitable exit. So, why wait? It is certainly too important to the success of your business exit, as well as your family and your employees, to leave to chance.
Realize that in your indecision, you are making a decision. As Winston Churchill observed, "I never worry about action, but only about inaction." Do not take a relaxed approach toward the inevitable fact that you will, in one way or another, leave your family business. Without the right planning, you could end up getting a less than optimal exit for yourself, and for your children.
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, why is it so critical to decide to act now?
Preparing and selling a business for top dollar takes time (as long as 5 years). If you want to sell to children or employees (two groups who rarely have any money), they'll need that time to earn the funds to pay you for your interest.
You'll minimize the risks if you leave extra time. More time can be used to increase value, design and execute income tax saving strategies, strengthen your management team, and begin a gradual transfer of ownership (not control) to key employees or children.
More time often equals greater reductions in risk. If you don't start early, you probably won't have time to implement the right strategies, and you'll likely end up transferring your business on less-than-ideal terms if you wait too long.
The market may not be paying peak prices when you are ready to sell to another party, and may not operate on your terms. Activity could be non-existent in many business areas. Remember the state of the Mergers and Acquisitions market in 2008 and 2009.
If you plan on leaving your family company, why not choose to develop a sound exit plan and plan now? You've worked so hard to build your business, and to have little or nothing to show for it would surely be unacceptable to you. So take these actions and begin now:
1. Develop an exit planning team to forge a plan with accountability for decisions and deadlines.
2. Work with a financial professional to determine your financial needs.
3. Determine an exit date.
4. Decide whom you want to succeed you.
5. Have your company 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 goals.
The best possible exit path is not difficult to accomplish. Decide to take action now to safeguard your retirement. The failure to act can perhaps be fatal to a profitable exit. So, why wait? It is certainly too important to the success of your business exit, as well as your family and your employees, to leave to chance.
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