What Happens If I Don’t
Plan for an Exit?
Most exits are unexpected — don’t be caught without a plan
The most common exit path for business owners
is unanticipated and involuntary.
You may think it will never happen to you, but the fact of the matter is that you do not know if or when an unforeseen event will occur that could be detrimental to you or your business. Having a plan for a business exit, even if you are not ready to do so currently, is the best way to protect yourself, your company, your family, and your future.
What are some unexpected ways business owners find themselves needing to exit their company?
Why Should I Have an Exit Plan?
Having a solid exit strategy allows you to plan for both the unforeseen and the expected.
While you are not anticipating exiting via one of the unfortunate circumstances above, you also will most likely want to transition out of your business at some point in the future.
Having a plan that covers both options will allow you to transition out of your business correctly while also maximizing the value of your company.
We like to use the analogy of selling a home. Whether you put your home on the market because of a planned move or due to unexpected circumstances, you can most likely sell it fairly quickly as is.
However, if you invest time and money into cleaning up the home, repairing items that are broken or outdated, and staging it so it’s presentable, you will be able to list it at a higher price and not only get back the money you spent to make it nice but also see a higher profit in the long run.
Who Should Be Involved In Your Business and Exit Planning?
The conversations, decisions, and actions necessary for a solid exit plan may seem overwhelming and time consuming.
However, they are nothing compared to the actions you or other members of your family or company will need to take if you do not make a plan and are caught in an unexpected situation that will require a hasty business exit.
To begin planning your exit strategy, we recommend consulting your financial team. This should include at least a financial planner/wealth manager, business attorney and/or exit planning consultant.
Your team should be working together to have a larger conversation surrounding business continuity, risk management and exit planning; if you have these conversations with your financial team on a personal level, you should be including your business as well, not just personal assets.
From there, you will be able to determine the best exit strategy for you and your business to not only protect it, but also maximize its value and legacy.