Benefits of Business Exit Planning
In the last issue (#47), we detailed A 20-Step Business Exit Planning Process. In this issue we discuss the Benefits of Business Exit Planning.
"An intelligent plan is the first step to success. The man who plans knows where he is going, knows what progress he is making and has a pretty good idea when he will arrive." Basil S. Walsh
Benefits of Business Exit Planning
In Issue #46 – The Overall Goals of Planning Your Business Exit, we identified three goals for successful exit planning: 1) successfully selling your business; 2) transitioning to the next stage of your life (whatever that may be depending on your choices); and 3) learning how to control your own destiny. Let’s look at specific benefits for each of those goals.
The earlier you start the process of planning for your business exit, the greater the likelihood of achieving financial independence. Don’t delay. Get started today!
Successfully selling your business
As mentioned throughout our newsletter series, only about 25% of small businesses ever sell. The primary reason businesses don’t sell is the failure of owners to plan for the sale of their company. Planning your business exit provides the following benefits:
- Makes you consider your choices upon exiting your business
- Prepares you for life after business ownership
- Prepares you mentally to make the tough decision to sell (whenever that may be)
- Provides a path to your next stage in life (whatever that may be)
- Enables you to control the timing of your departure
- Sets realistic expectations of your financial situation after selling your business
Learning to control your own destiny
As it relates to controlling your own destiny, the exit planning process offers these benefits:
- Help you understand your exit options (selling to children, employees or third party)
- Helps identify ideal timing while also understanding timing trade-offs
- Helps minimize taxes and maximize net proceeds from the sale of your business
- Provides a contingency plan if something unexpected happens to you
- Provides an estate plan to minimize the tax effects of leaving your assets to your family
- Provides wealth preservation plans
- Helps protect your legacy as it relates to other stakeholders including family and employees (and possibly creditors, customers and vendors)
- Provides piece of mind for you and your family and other stakeholders
Business exit planning integrates your business, personal and financial plan
The earlier you start the process the greater the ……
