Making an exit plan for your business is as important as business owners overlook it.
In the following, we have compiled some helpful tips for you:
You should make a sheet stipulating the ideas that you have. In this regard, following is a template that John M. Leonetti shares in his book Exiting Your Business, Protecting Your Wealth: A Strategic Guide for Owners and Their Advisors:
Undoubtedly, writing down your goals clarifies and motivates you to set minimum exit points and backup plans and stop losses and fallbacks.
It would help if you answered some questions that ascertain your readiness for suitably exiting your business.
Here is your to-do list for marking your ideas:
We have brought a sample quadrant chart for you:
Take your time to weigh your options and decide where to exit. By doing this, you may come across better options that can benefit you in the long run. Notably, just like starting a business, exiting it needs its due planning and concentration.
To delve deeper, some critical considerations in this regard are the following:
It is not mandatory to sever all ties with your business at once. You can consider options like an ESOP.
ESOP is an Employee Stock Option Plan (ESOP), according to which you can continue to own a portion of the business as an employee in the form of shares, and your stake will continue until at the particular time you can recapitalize it and monetize your interest in the business.
In this way, you will benefit from the business’s growth and be a shareholder in its future.
You can, by doing this, yield control of the business but retain your job.
While making your exit decisions, make sure you take into account that some payments will miss your calculation.
Moreover, you should not seal your exit plan unless you have made sure that it will be able to suffice for your immediate and future liabilities.
Since you know your wealth is tied up in the business, you understand that the process is worth the time and investment. So, being proactive with your planning increases your potential for protecting your wealth.
Firstly, he organizes all of your data
In addition to that, he aggregates the work from other Advisors and report back to you with an updated written exit strategy plan.
Thirdly, he runs the income and expenses projections to determine how your post-exit lifestyle will be maintained.
A mergers and acquisitions advisor will provide consultation on current market conditions for external and internal transfer.
Some other Considerations:
Planning an exit strategy is as important as it is taken casually. A hurried or badly planned exit is quite likely when you are inclined to severing your ties with your business at the earliest opportunity. However, in the long term, it will prove quite costly. So, it is advisable to give it due effort so that your future is more protected.
