“I haven’t decided what I ultimately want to do with my business, or when I want to exit, or how much money I’ll need, or whom to sell to, so how can I plan my exit? Besides, I don’t want to exit right now.” 

 If you’ve said this, or thought it, you are not alone. Many business owners are either overwhelmed with the thought of exiting or are so busy fighting daily business fires that they think they cannot plan their exits. 

Know that in your indecision, you are making a decision. As Winston Churchill once observed, “I never worry about action, but only about inaction.” If you take a passive attitude toward the irrefutable fact that you will–one way or another–leave your business, you are deciding to settle for a least profitable exit for yourself and for your family. You must be planning for business succession. 

Take your first step today. Talk with Ohio business coach and Certified Exit Planning Advisor, Ralph Berge. Call him 440.838.0991.

Perhaps the most important thing to remember is that developing a good exit plan is a multi-disciplinary endeavor. No single professional advisor has all of the expertise needed to design a comprehensive, integrated exit plan. The best exit plans incorporate input from a team of advisors that includes:

·       A business attorney with M&A experience,

·       A financial advisor or wealth management professional who does planning work,

·       A tax specialist who is versed in the latest tax issues, an

·       An insurance professional, and

·       A Business Intermediary who specializes in exit planning. 

Sticking to your exit plan is just as important as having one. You should meet with your advisors on a regular basis to ensure that crucial steps are being completed on schedule.  Nobody likes to pay unnecessary fees, but the cost of developing a good exit plan is usually tiny compared to the additional value received at the time of sale. After all, exiting your business is probably going to be the most important deal of your life time. Don’t just shoot from your hip. 

Ohio business coach and Certified Exit Planning Advisor, Ralph Berge can help. Call him 440.838.0991.

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.

 Without a predetermined exit plan, you will probably:

·       Undervalue your company and leave hard earned wealth on the table,

·       Pay too much in taxes, and

·       Lose control over the process by being reactive, rather than proactive.

 On the other hand, a well designed and implemented exit plan enables you to:

·       Control how and when you exit

·       Maximize company value in good times and bad

·       Minimize or eliminate capital gains taxes

·       Ensure you achieve your business and personal goals,

·       Have strategic options from which to choose, and

·       Reduce uncertainty for your family and employees. 

Ohio business coach and Certified Exit Planning Advisor, Ralph Berge can help. Call him 440.838.0991.

A recent survey showed that the number one reason business exits fail is due to a lack of planning on the part of the owner. A separate study showed that most business owners spend more time planning their family vacations then they do planning how and when to exit their business. Rather than being proactive, most business owners are reactive and “forced” to sell because of burnout, health issues, marital problems, or business conditions without the time to prepare correctly. As a result, most business owners exit their companies at the worst time possible. 

As a result, developing an exit plan is the most important thing you can do to protect the value of your business. 

What is an exit plan or a family business succession plan, you ask? An exit plan is a comprehensive road map that addresses all of the business, personal, financial, legal and tax issues involved in selling a privately owned business. A good exit plan includes contingencies for illness, burnout, divorce, and even your death. Its purpose is to ensure the survival of the business; to provide continuity to your employees, customers, vendors; and to preserve wealth for your family.

An exit plan that includes a realistic corporate contingency plan should be developed so you can be certain that your business can continue if something happens to you. If you have an exit plan that is updated periodically, not only will you be prepared to depart on your own timetable, but your business will also be prepared to survive whether you’re there or not. An exit plan can give you flexibility and peace of mind, no matter what happens to you in the future.

What would happen to—or within—your company if something were suddenly to happen to you? Could a sudden loss of your leadership possibly cause your business to fail? Could it have a significant effect on your company’s ability to maintain financing? What would happen to your company’s customer and vendor relationships? Could your company suddenly experience an internal power struggle, employee turnover, lack of direction, begin to lose money? Will successor management be able to take over at a moment’s notice or will an unprepared successor be thrust into the leadership position prematurely? These are questions that need to be considered because even vigorous and profitable companies quickly change when their leader is no longer present.