For business owners who are thinking about exiting their business in the future, there are many things to consider to assure the business transition happens in a smooth manner and accomplishes your personal and professional / corporate goals. Owners are wise to seek the counsel of advisors in this complex and delicate area. Your choice of experienced advice in this area can mean the difference between success and failure to reach your goals. Not only do you need to know which types of advisors to choose but also when to bring them onto your team. This newsletter provides the top three things to consider when building your exit planning advisory team.
This newsletter is written for business owners who may be thinking about planning the exit from their privately-held business but have not yet gotten started with the process. Business owners today are just starting to recognize that there is a unique service to help them with the exit planning process. We offer this information in an effort to help you, the business owner, continue to think positively in the direction of protecting your largest asset by doing this form of planning.
In any competitive endeavor there are two prevailing mindsets – there are those who are playing to win the ‘game’ and there are those who are playing not to lose. Business owners are playing the game of business. Each player in this game has quite a bit at stake because statistics reveal that the majority of most business owner’s wealth is tied to their illiquid businesses. Moreover these business owners are heavily reliant upon the income from their businesses for their lifestyle and livelihood. With so much at stake, owners need to ask themselves whether they are playing this game of business to win or not to lose – the answer can have a major impact on how successful you will be with a transition or exit from your business.
Most owners of privately-held businesses have the majority of their wealth trapped in their illiquid business. What this means is that without a path to turn the value in your business into cash, your overall wealth will continue to stay concentrated in your ownership of your business. So the fact that your business provides for a solid income and lifestyle is separate and distinct from considering how and when you will be able to turn that illiquid wealth into cash. This newsletter is written to help owners see that a business exit plan can be a vital first step towards diversifying your overall portfolio while also protecting the wealth that resides in your illiquid, privately-held business.
When business owners think about transitioning out of their companies, some of the first thoughts that come to mind relate to the sale of their business. In fact, many business owners believe that in order to exit their business they need to sell it to someone else. As a result, the term ‘exit planning’ is often misunderstood and interpreted by owners as a ‘sale’ of their company.