For most business owners, leaving their business is likely to be the biggest transaction of their lifetimes—and the one that will have the biggest impact on their financial and emotional future. Yet more than 80% of owners have no written plan and nearly half have done no planning at all, according to the Exit Planning Institute. Why? Too often, it’s because they don’t know where or how to start.
Addressing this issue is important, particularly on the front end, while there’s still time to plan. It can save time and money in the long run, and help insure you get the maximum value for the company you worked so hard to create. Remember: some 75% of businesses that are for sale never sell. Those aren’t great odds. Exit planning can help.
Many confuse exit planning with succession planning, but they’re not the same. Succession planning is the process of identifying successors, and providing training and experience to successfully transition leadership and/or management within a business. Exit planning—which includes the critical element of succession planning—is a much more comprehensive analysis of all the factors that impact owners, their businesses and, just as importantly, their families.
Though exit planning is complicated, its goals are simple: to maximize the value of the business at the time of exit, minimize the owner’s tax liability, and simultaneously help the owner achieve their personal, family and financial goals. The process starts by identifying the owner’s goals and objectives in the areas of business value, personal and financial resources, life after the sale or other transaction, family considerations, and many others. It also includes contingencies for the four D’s: death, divorce, disability and departure.
Read the full article at Camm Morton: Why every business owner needs an exit plan
Guest Post By: Camm Morton, owner of VR Baton Rouge