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The New Year is a time for resolutions.
If you have been thinking about an eventual exit from your business, you should consider the opportunity to make this resolution - I will develop an exit strategy plan in 2009.
Exiting a business requires a commitment to a special planning process. With all of the years of ‘sweat equity’ that went into building your business, you deserve an ‘exit strategy plan’ that will protect that hard-earned wealth. Your exit strategy plan will likely take months to develop and years to execute. This is particularly true if you are not ready to leave the business today but would prefer an exit that occurs over many years.
Remember that a business exit isn’t necessarily the sale of a business. Rather, it is the coordination of information relevant to protecting the wealth that is ‘trapped’ in your business. Your objective with an exit strategy plan is to apply the planning information to your individual situation to assist you in reaching your personal goals.
Focusing on the following steps and writing down ideas that come to you will help you begin your Exit Strategy Planning. Taking action on those ideas will advance the development and execution of your plan throughout the year.
Set exit goals, write them down, and stick to them.
Figure out what you really want from your exit and write it down. You may be thinking about a plan to transfer the business to a family member. Or perhaps you will plan to transfer it in a tax-efficient manner to an Employee Stock Ownership Plan (ESOP). Or maybe giving some stock to charity (while receiving a tax break today) is the answer.
On the other hand, you may want to stop working right away and sell for the highest price. Or perhaps you need some capital to grow the business to achieve the lifestyle associated with your future desired exit.
Whatever you goal may be, you’ll benefit from applying clear thinking to your exit strategy plan through the process of writing down your goals.
The following guide may be helpful in organizing your thoughts:
I want to achieve ______________________________________________ with my business exit.
Examples:
Get most money.Time and money freedom.Continue running business but diversify my estate.Pass to children in the business.Gift to family members.Pass on to employees.Build business to accommodate future exit.Pay the least amount of taxes possible.Keep control as long as possible, and diversify along the way.Reduce Estate Tax exposure.Leave a legacy.The reason that this is most important to me is:_________________________________________
I would like to achieve these Exit Strategy Planning Goals by ______________( Day/Month/Year)
The way that I’m going to achieve this is by: ___________________________________________
Examples:
Reading the Building Value Newsletters.Writing out my goals.Examining whether my goals are achievable.Analyzing my options for liquidity.Making changes in my daily routine to accommodate this exit strategy plan.Discussing my options with my advisors.Put this Worksheet in a file folder titled ‘Exit Strategy Plan’. This is the beginning of your efforts towards being proactive in protecting the wealth that is in your business. Show this plan to a trusted advisor(s) and/or spouse and review it every month or quarter so that you can begin to adjust your work responsibilities and your mindset to accommodate your Exit Strategy.
Conclusion
New Year's resolutions serve a purpose of reflecting upon the past years’ trials, tribulations and accomplishments, while also turning your attention towards the year ahead and the opportunities that it will bring.
Resolve to make 2009 the year that you become proactive with protecting the wealth in your business with a focus on Exit Strategies.
858.345.4435
Make 2009 Your Exit Strategy Year
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Copyright Henberger Group Inc.
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