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Planning your business exit strategy

While some people can’t wait to retire, others just see it as sometime in the future.  Often business owners find the idea appealing, but the “how” or “when” are challenging details to work through, especially when the demands of day-to-day business get in the way.  Building a good exit strategy isn’t something that should be taken lightly, nor is it something that a business owner should look at only one-to-two years before he or she is ready to transition their business.  For maximum value, business owners should start planning their exit from the day they start their business.  It is, however, vital to set down the “how” a minimum of five years in advance.  And, to really get the maximum value out of your company, it is very important that it can be sold without you.  Or put another way, if you are the core of the business, or "the brand," it is going to be tough to sell your business.

When a business owner looks to sell their business, there are a number of options to consider. These include selling it internally, through a merger, or to an outside party.  Each one will likely put a different value on your company.  And each one comes with its own pros and cons.  Looking at your options and having years to develop the proper strategy will glean the maximum value out of your company. 

 

Is the selling price of the business the most important piece of leaving?

Not really. It is what you walk away with that really matters.  If you sell your business but the taxman eats up most of your hard earned profits, then it really takes away from the money on which you have to retire.  What is most important is what we call your “walking money.”  There are a number of different ways that we ensure a client walks with as much money as possible. We try to put the money in the hands of the person that built the business, not Uncle Sam who keeps trying to take what you’ve built.

 

Is there more to think about than selling price and “walking money”?

Of course.  Many business owners have a huge level of identity wrapped up in their business.  It could have been passed on from a family member.  They could have invested their life savings in it.  Or they could have bought and built it up , created jobs and really enjoyed their experience.  There are a whole host of behavioral aspects to selling a business. This is why it is all the more important to think about how and to whom you are going to sell your business.

If you are looking to sell your business soon, or want to start planning for an exit, give us a call!  We offer a one-hour complimentary consultation.

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In accordance with the Investment Advisors Act of 1940, NO information contained within this website pertains to asset management, returns on portfolio or market related financial guidance. All information included in case studies are in broad scope and do not reflect any changes in portfolio values. We do not guarantee financial returns.