Many executives are either overwhelmed 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 leave, so how can I plan my retirement? 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 attitude toward the irrefutable fact that you will, in one way or another, leave your family business. Without the right strategy, you could end up settling for a less than optimal exit for yourself, and for your family.
Why not just wait? If you are an entrepreneur who isn't sure about what you want, or when you want to retire, why is it so critical to decide to act now?
Basically, planning and transferring a business for top dollar is time consuming-sometimes as long as 5 years. Preparing the business for the transfer will take most of that time. If you choose to sell to employees or children, they'll need that time to find the money to pay you for your interest. Reason being, these are two groups who seldom have any funds.
It takes time to design and execute income tax-saving strategies, build value, strengthen your management team, and start the gradual transfer of ownership (not control) to key workers or workers.
If you wait too long, you most likely won't have time to implement these strategies and you'll likely 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 be paying peak prices when you are ready to sell to another party, and may not operate on your schedule. Activity could be non-existent in many business areas. Look at the state of the Mergers and Acquisitions market in 2008 and 2009.
If you're going to be leaving your company one day, why not decide to create the right exit strategy and plan accordingly? Start now, and take these steps to secure your retirement.
1. Develop an exit planning team to forge a plan with accountability for decisions and time limits.
2. Work with a financial professional to decide your financial needs.
3. Determine an exit date.
4.. Decide whom you want to succeed the business.
5. Have your company assessed to see if: a) you should sell/transition today; and/or b) it has the value needed to meet your financial and other exit objectives.
The most viable exit path is not hard to achieve. Choose to take action now to secure your retirement. The failure to do this can potentially be fatal to a lucrative exit. So, why wait? It is certainly too important to the success of your business exit, as well as your children and your staff, to ignore.
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 attitude toward the irrefutable fact that you will, in one way or another, leave your family business. Without the right strategy, you could end up settling for a less than optimal exit for yourself, and for your family.
Why not just wait? If you are an entrepreneur who isn't sure about what you want, or when you want to retire, why is it so critical to decide to act now?
Basically, planning and transferring a business for top dollar is time consuming-sometimes as long as 5 years. Preparing the business for the transfer will take most of that time. If you choose to sell to employees or children, they'll need that time to find the money to pay you for your interest. Reason being, these are two groups who seldom have any funds.
It takes time to design and execute income tax-saving strategies, build value, strengthen your management team, and start the gradual transfer of ownership (not control) to key workers or workers.
If you wait too long, you most likely won't have time to implement these strategies and you'll likely 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 be paying peak prices when you are ready to sell to another party, and may not operate on your schedule. Activity could be non-existent in many business areas. Look at the state of the Mergers and Acquisitions market in 2008 and 2009.
If you're going to be leaving your company one day, why not decide to create the right exit strategy and plan accordingly? Start now, and take these steps to secure your retirement.
1. Develop an exit planning team to forge a plan with accountability for decisions and time limits.
2. Work with a financial professional to decide your financial needs.
3. Determine an exit date.
4.. Decide whom you want to succeed the business.
5. Have your company assessed to see if: a) you should sell/transition today; and/or b) it has the value needed to meet your financial and other exit objectives.
The most viable exit path is not hard to achieve. Choose to take action now to secure your retirement. The failure to do this can potentially be fatal to a lucrative exit. So, why wait? It is certainly too important to the success of your business exit, as well as your children and your staff, to ignore.
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