You Don’t Need An Exit Strategy IF / by Kerri
Most business owners have not put a lot of thought into planning for their eventual exit from their business. Many many owners, of established as well as startup companies, don’t see any value in planning for an exit that is years if not decades into the future. If they can’t see immediate benefits and consequences for their actions and decisions, they leave it for ‘someday’.
You may not need an exit strategy if you intend to die at your desk and leave a mess for your family and team to clean up.
So let’s suppose. Do the following points describe you?
You Don’t Need an Exit Strategy IF You:
- Want to liquidate your business upon closing even if it means getting only pennies on the dollar
- Want to maximize your tax bill to the state and Uncle Sam, minimizing the return to your family
- Do get to sell in the end (maybe a firesale) and you enjoy paying your technical/transaction advisors at their highest premium fees
- Are willing to walk away from 30-50% of the value of your business
- Are willing to let the business lose clients when you depart
- Don’t feel responsible for your employees after you’re gone. Will they still have a job, will they move, will they have to take a pay cut?
- You and your business are not a community partner, in donations, sponsorships or time, and your closing will not hurt the community
You Don’t Need an Exit Strategy IF Your Family, Your Spouse, or Your Children:
- Can and will jump in and run the business your way, without any need for some development and succession planning in advance
- Can salvage or sell the business on their own while you are indisposed
- Do not need or expect the business to be liquidated in some way to secure their future
- Do not expect or deserve a return for all the sacrifices they made for you to build that business
These statements are a bit exaggerated. ‘Yes, But my situation is different…’ is not enough. Without a Framework for your exit; you, the business, your team, your family, your finances and your future will all be shortchanged. Is that your intention? Is that your plan?
- Everyone needs a Master Plan – for their business and their life
- Every owner needs contingency planning – ideally before you opened the doors to your business – sooner rather than too late
- Every owner needs to start exit planning early – years earlier than any transaction advisor every required of you
- Exit planning and execution take time and a team to maximize your return and optimize your exit transition
If not now, when?
Call us for your free consultation.