With the New Year upon us, business owners are thinking about goals for the coming year. These will surely include business growth and profitability. One of the longer term goals most commonly shared by owners is to successfully exit their businesses over the next 10 years. Most business owners have a sense of how much longer they want to remain as owners of their businesses, and the New Year is a perfect time to take control of the planning that can insure a successful exit.
In our experience, it takes a typical business owner 6 – 12 months to fully develop an Exit Plan and then 3 – 5 years to implement the plan. That means that for many owners looking to exit their businesses within the next 10 years, their best chance at a successful business exit begins today.
The first step in creating a written Exit Plan is for business owners to establish their personal goals. There are usually three types of goals that we see owners consider as they begin the exit planning process:
- Foundational Goal: When planning a business exit, the foundational goal is financial independence. This means transferring ownership and receiving enough money to enjoy a secure retirement.
- Universal Goals: Universal goals generally apply to all business owners and include leaving the business when they want, for the money they need, and to the person or people they choose.
- Values-Based Goals: What do you want for your business legacy? Are you concerned about the business’ continuing impact on your community? Do you want to preserve the company culture? Do you have charitable goals? For some owners these issues are critical. For others they are secondary to financial concerns.
Thinking about the goals that are most important to you is a critical first step in establishing a plan that will allow you to exit your business on your terms. It will also allow you to consider the big picture – how your exit will affect you, your family, your business and your community. By clearly establishing your priorities, you will have completed the first step in successfully exiting your business.
If you’d like to discuss your goals for your business exit and the steps that follow to create a thoughtful plan for the future of your ownership, please contact us today. We can help you map out what will be most conducive to the success of your business, your family, and yourself as you approach your business exit.