Wednesday, April 23, 2014

10 Reasons To Have an Exit Strategy For Your Business

10 Reasons to Have an Exit Strategy for Your Business. 

Plan to profit when you exit your business.  It just did not seem right that a successful business would not be worth anything when it was time for the owners to exit. An enormously successful client planed to just dissolve their enormously successful business when the time came for them to stop working and enjoy the beach life. They reasoned that since they are the business that no one would buy it from them. 

A business broker explained to me the value of the business and why others would be eager to purchase it.  Yes, while in a way they are the business, others would jump at the opportunity to purchase the business and would profit from this business too. The broker explained that the purchaser in these type of situations would typically want a one year consulting agreement with the current owners to receive the proper training. So yes others would pay to take over your business and keep it going.  So you can see you need to have a strategy to exit and profit from the business you built and know what your options are.  

Below are 10 reasons to have an exit strategy for your business:

  1. Plan to succeed and then cash out at some point
  2. Plan to retire/move on
  3. Create a business that is sustainable and salable 
  4. Have a succession plan for your heirs and/or key employees
  5. Know what the market will give you for your business
  6. Don't leave money on the table
  7. Investors want to know there is a way to cash out
  8. Have a plan in the event you become disabled
  9. Enable yourself to get away from day to day operations to pursue other opportunities
  10. Know how to get out if the business fails

Most people plan their retirement. Entrepreneurs too should plan their retirement and/or how they will move on to the next business idea.  What is your exit strategy?

The CPA Superhero wants you to succeed. If you want the CPA Superhero to help you feel free to contact me using my information below. New potential clients can have a free half hour initial consultation.  Tax planning for your retirement involves a consultation fee.

Jeff Haywood, CPA
The CPA Superhero

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These posts contain general information that does not fit every situation, they are not all inclusive, and as always for your tax situation everything "depends on facts and circumstances."  In addition, the world and IRS requirements are always subject to change.  So call me to talk about your specific facts and circumstances and what you want to accomplish.