If you are at the height of your business success or you are slowly closing in on key competitors, you may have never considered your eventual exit. Or perhaps you have started to ponder your retirement, picturing what life may look like after work. With most baby boomers reaching retirement age and an increasing number of small to medium-sized enterprises considering future sale, it is more important than ever to start thinking about exit planning. But what does exit planning really mean – and where can you begin?
This is a question that puzzles many business owners who spend most of their lives working to build a successful company that endures the test of time. It can be difficult to imagine walking away from the years of hard work and passion dedicated to helping one’s business flourish, a situation that can sometimes lead business owners into deep anxiety, fear and depression. Others quietly consider retirement, asking themselves how and when can I retire? Will my company fall apart without me?
Research from the MGI Australian Family and Private Business Survey shows that 75% of business owners do not have a well-developed exit plan. Without adequate planning, a large number of business owners will only receive a fraction of what their business is worth. The goal of an exit planning professional is to help you avoid this situation at all cost and achieve an exit that will fund your desired future lifestyle.
WHAT DOES ‘EXIT PLANNING’ MEAN?
Exit planning is the creation of a comprehensive road map that allows business owners to successfully exit a privately held business. A thorough and well-developed plan will take into account and answer all business, personal, financial, legal and tax questions involved in its sale. Its purpose? Maximize the value of the business at the time of the exit, minimize the amount of taxes paid, and ensure that the business owner is able to accomplish all of his or her personal and financial goals in the process. It’s as easy as that – however, many business owners envision it to be a long and complicated process and delay it as long as possible. If you plan to retire within the next five years, it is best to start considering your exit in stages, understanding the key processes that will lead you to your ultimate succession.
HOW DO I START THE PROCESS?
Ascend Business Partners has devised a systematic approach to help business owners start working towards succession. Our “Seven Steps to Successful Succession” will increase the value of your business and improve profits while ensuring owners feel ready to step down when the time comes.
To learn more about creating a well-designed exit plan, please visit our recent blog article here. To your successful succession!