To be effective, your exit plan must include these six essential components.
1) It should include a concise statement of your business goals, personal goals, and family/estate goals. This step is essential to ensure that all of the goals are consistent and set the direction for the rest of the analysis.
2) An exit plan should contain a detailed business valuation to establish a baseline value for the business.
3) The plan should help you identify specific ways to enhance the value of the business prior to your exit.
4) A good plan should contain an analysis of the pros and cons of your different exit alternatives such as a third party sale, management buyout, family succession, or liquidation.
5) A good plan should provide suggestions to minimize any capital gains, ordinary income, and estate taxes related to the exit.
6) The analysis should contain an action plan that details the specific personal and business steps you must take in order to prepare for your exit.
Successful business owners will tell you that planning for business succession gives them Peace of Mind. They know their business can survive and provide income and security to their family and employees for years to come.
