This is where a solid exit strategy comes into play. If you don’t have one, there’s no time to waste. Some business owners come up with their strategy while drafting their original business plan. But, a solid strategy can be put into place later in the game as well.
Think through the following questions when putting together your exit strategy, and talk to an exit planning professional or business lawyer to be sure your strategy will work out in the long run.
Who Will Take Over?
One of the most important aspects of a solid, successful exit strategy is figuring out who will take your place upon your exit. This is critical for the future of your business. Will it be a family member, one of your kids? What about a partner who’s been in the business for a long time? Or are you looking to sell to an outside investor?
Considering your plan for moving forward must include serious thought about who will take over and whether or not they’ll be capable of carrying out the goals you have for your business. Put some time into this as the rest of your exit strategy may depend on it.
What’s Your Goal?
Once you’ve decided who will take over, think about yourself. Where do you see yourself living out your retirement, Lititz, Pennsylvania or Los Angeles, California? Your choice of residence determines the amount you’ll need to have set aside. Don’t forget to consider taxes.
What about the lifestyle you hope to live? Would you prefer a simple, laid back retirement or a luxurious retirement traveling the globe? If applicable, consider your spouse and his or her savings, pensions and retirement plans. Will he or she be able to contribute to your retirement plan or will the entire plan rely on your savings?
By taking an honest look at the lifestyle you hope to live following your business exit, you’ll be better equipped to plan for the finances required to make that dream a reality.
Will You Remain Involved?
Are you prepared to cut all involvement from your company, leaving it completely in the hands of someone else? Or, do you see yourself sitting on the board, or even working part-time? If so, for how long?
One of the most important parts of an exit plan is taking an honest look at your goals. If you’d like to totally cut ties with the business, that’s fine; just decide that up-front and build your plan around that goal.
The choices you make now, prior to retirement, are critical and will cut down on the confusion as the time draws nearer. Answer the questions above and start considering your exit strategy today.
