Want to Exit Your Business? Don't do it without first considering these 4 things.

by Teri N. Benson, CDFA, November 11, 2019

Each business owner has their own personal reason for thinking about an exit. It could be as simple as a readiness to retire or as complex as a health problem. Regardless of reason, the best exit plan is one that happens at the right time for the business owner and the business. We encourage business owners to work with consultants who are not emotionally tied to the business and are qualified to help owners make well-informed decisions for them as an individual.

If you are considering an exit, we recommend keeping these 4 things top of mind as you begin your planning:

Emotional readiness: Can you really walk away?
Transitioning out of a business that you have built from the ground up is difficult for most. You’ll have to disengage yourself from a business you spent years growing and coping with this decision takes a conscious effort. The more you prepare your business for a sale, the more emotionally prepared you will be to make the exit.

Financial Goals: Is it possible?
The harsh reality is that most entrepreneurs don’t save properly for retirement nor do they manage money post-sale carefully. Be sure to consider what you really need to be comfortable for your lifestyle. Well before transitioning your business, it is important to know “your number” -- the sale amount that will not only get you to your desired lifestyle but also keep you there and provide for any legacy goals.

Taxes: How big of a hit will I take?
Discuss your next steps with a tax and estate planner who is familiar with succession and transaction planning. They will be able to advise on the best strategy to mitigate your taxes. Discuss an exit with your planners as soon as an exit becomes an option for you.

Timing: What is your next step?
Will you retire, will you consult part-time, will you travel? Business owners especially find it hard to know what to do with an excess of free time, so it’s valuable to visualize what you want next. After all…isn’t this what you’ve been working so hard for?

Call us today. We can help.

Invest in You. Trust in Us.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author, and not necessarily those of Raymond James. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Questions? Call us.