Entrepreneurs are go-getters by nature, always looking for new ways to grow the business. But what about that day—maybe soon, maybe further down the road—when all that go-getting becomes letting-go? Are you ready—and is your business ready—to manage that life change?
Whether you are part of a family business or a sole proprietor, there comes a time when you think of leaving. Maybe it’s age. Maybe the weight of routine. Maybe it’s an itch to change careers.
No matter the reason, it’s critical to plan your transition as well as you’ve planned the business. You certainly owe it to yourself: How will you maintain your lifestyle and achieve financial confidence? And you also owe it to the business: Who is the right type of buyer to keep what you’ve built moving forward? Even if you see yourself remaining active for the foreseeable future, it’s never too early to start strategizing how to create the best outcome.
Get Real About Your Dreams
Maybe you want to start another business. Retire and smell the roses. Maintain a part-time role. Switch careers. You need to think seriously about what you want to do, and when and how you want to accomplish those goals. That information sets the foundation for everything that follows: business succession planning, transition planning and financial and estate planning.
Ensure the Dollars Make Sense
When starting the business, you probably figured out, to the last penny, what it would take to open the doors and keep the lights on. Now, do that process in reverse. Sweat the numbers. Realistically determine what it will take to fund your lifestyle and your goals when you no longer have an owner’s income.
Evaluate Your Bench
How prepared is your management team for the big leagues and a future without you? Do you need to increase their training? Expose them to different facets of the business? Or even recruit new talent? To help their transition, start delegating day-to-day responsibilities and give them time to grow into their responsibilities while you’re still around to guide them.
Build Success Into Succession
Nearly three-quarters of small business owners do not have a formal succession plan.1 That’s risky for your business today (what if you were to become incapacitated?) and in the future. Here are some tips on succession planning to help you begin building a blueprint for the future of your business.
Engage a Financial Professional
The tax and legacy planning considerations can be highly complex when transferring ownership of a business. Reach out to an experienced financial professional who can review your current situation and provide advice on various strategies to reduce your tax exposure and optimize your estate planning. Here are some tips on legacy planning to help you prepare for that discussion.
Exiting your business can be the beginning of new and great things for you and the company you’ve built. With the right planning, you can help ensure a successful future for everyone.
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