Many business owners spend their entire careers growing and developing their companies. But what can business owners do to plan for when they no longer own their business?
According to the 2016 Business Owner Survey conducted by the Business Enterprise Institute, Inc., 79% of business owners plan to exit their business in the next 10 years, however only 17% of business owners have a written exit plan. Those numbers indicate a reluctance to prepare for something that is sure to happen – 100% of business owners will exit their business, one way or another.
While the thought of exiting your business can seem overwhelming, it doesn’t have to be. It reminds me of the age-old question, “How do you eat an elephant?” …One bite at a time.
Getting Started
Exiting the business that you’ve spent time to build can be an emotional and exciting time, and it can impact your personal, financial and professional situations. You may wonder if it is possible to develop a plan that will successfully address all these areas. These intertwined sections can be addressed in one simple way – a comprehensive plan, developed with the guidance of a team of qualified advisors.
The key to building this comprehensive plan is to consider all the unique qualities that you and your business possess. First, establish your goals for yourself, your family, your business and your employees. Next, evaluate the progress you’ve made towards those goals and where you’ve fallen short. Then, identify action items that can move you closer to reaching your goals. Finally, assign responsibility for reaching those goals on a timeline that meets your needs.
A team of trusted advisors should be with you through every step of this process, helping you uncover opportunities and strategies to address specific aspects of your business exit, moving you closer towards your goals.
Let’s take a closer look at each stage of the process:
Establish Goals – Define what is important to you
To have a successful exit, you must establish goals surrounding what your exit will look like for you. It could be that you want a comfortable retirement where you never have to work again; or perhaps you would like to sell your current business and start a new company doing something completely different. Your goal could be to find a successor who will protect your business’ reputation and mission – the possibilities are endless! However, whatever goals you determine for your exit are personal objectives that only you can make.
As you determine which goals are important to you, you may discover there are roadblocks to pursuing those goals. For example, many business owners determine they want to transfer their businesses to family members or employees they trust. Sometimes, those family members or key employees either cannot run the business – due to a lack of skill or interest – or will not run the business the way those owners anticipated. Creating processes that address these roadblocks will be crucial for achieving your personal exit planning goals.
Plan for the Future by Understanding the Past
What steps have you taken toward a successful exit, and what were the results? What went well by moving you toward a more successful future, and what didn’t? An honest assessment of your past steps and progress can give you great insight into which action steps might be likely to move you toward your goals.
Find the Experts and Create the Plan
Exit Planning requires coordinated input from multiple advisors (CPA, attorney, financial advisor, and insurance professional) to confront the various aspects of your exit. Gathering the advisors you may need to implement your exit plan can be difficult, especially if you don’t work with these types of advisors regularly. One way to seek out and gather these experts is to ask them how their expertise supports a comprehensive exit strategy, and to provide examples of how they’ve worked with other professionals to create well-rounded results for clients in the past.
The leader of your advisor team should gather the advisors necessary to help you create an exit plan that works toward your wants, needs, and goals. They are responsible for getting all advisors to meet their deadlines and fulfill their obligations. If you already work with a few advisors you trust, you’ll likely need them on the team, but you may also need new experts.
Implement the Plan
Your action plan for implementing your advisor team’s solutions is where the rubber meets the road. You’ll want to make sure that your planning work and the solutions and action steps you identify move forward thoughtfully.
Establishing your goals, creating a process, seeking out experts, and implementing solutions can be time consuming and expensive if you do it alone. If you’d like to discuss how you can begin to determine which goals matter to you, build a process to pursue your goals, and find experts who can help you, please contact us today. We’re here to answer your questions and support the outcomes you want.
