FINANCIAL FOCUS: Planning your business exit: Start with the end in mind
If you own a business, you’ve probably spent countless hours thinking about how to grow it, manage daily operations and serve your customers. But have you thought about how you’ll eventually step away from it? While it might seem premature, planning your successful exit from your business is one of the smartest moves you can make as an owner.
The reality is that most business owners have 80% to 90% of their net worth tied up in their companies, according to the Exit Planning Institute. That’s a significant investment that deserves careful planning to protect. Unfortunately, 70% to 80% of businesses put on the market don’t sell, and about half of all business exits are involuntary due to unexpected circumstances like health issues, family emergencies management disputes or economic downturns.
Exit planning is more than preparing for retirement. It’s taking control of your future and ensuring you can transition away from your business when and how you choose. You can start with the end in mind – a proactive approach that can inform your current business decisions and help increase your company’s value and marketability.
Begin by articulating your personal goals for both the transaction and your life afterward. Maybe you want to sell only a portion of your business, stay on as a paid consultant or use the proceeds to start your next venture. Understanding your vision helps shape everything else.
