I never worry about action, but only about inaction. – Winston Churchill
“I haven’t decided what I ultimately want to do with my business, when I want to exit, how much money I’ll need or to whom to sell. So how can I plan my exit? Besides, I don’t want to exit right now.”
If you’ve said or thought this, you are not alone.
Many business owners are either overwhelmed by the thought of exiting or are so busy fighting daily fires in their businesses that they assume they cannot plan their exits.
If you aren’t sure about what you want from an exit or when you want to leave, why is it so important to decide to act today?
First, recognize that when owners have a passive attitude toward the irrefutable fact that they will - one way or another - leave their businesses someday, they are settling for less than the most profitable exit for themselves and their families.
Second, understand that preparing and transferring a company for top dollar takes time - on average, five to 10 years. Most of those years will be spent preparing the business for the transfer or - if the owner decides to sell to employees or children (two groups that rarely have any money) - giving them time to earn the money to pay for the owner’s interest.
The more time owners have to design and implement income tax-saving strategies, build value, strengthen management teams and begin a gradual transfer of ownership (not control) to key employees or children, the more likely they are to reach their goals.
Third, if owners decide to sell to a third party, remember the market does not operate on their schedule and may not be paying peak prices when they are ready to sell.
If the prospect of leaving your company with little to show for it is unacceptable to you, let’s look at your three options.
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