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An Exit Strategy – Do You Have One

According to a study by Northeastern University’s Center for Family Businesses, about 70% of family businesses have no succession plan in place and less than one in three maintain operations into the second generation. We find that most business owners are not working towards an exit strategy because they do not have a succession plan.  This typically occurs because they:

  • Don’t know where to begin
  • Have everyday battles that are competing for their time and attention
  • Are working in the business rather than working on their business
  • Are not sure how much their business is worth
  • Do not know how to begin maximizing company value for a future sale date
  • Have not identified a successor(s)
  • Do not know who to turn to for help

What does it look like for your family and business if you die or become disabled without a succession plan in place?  If you have a plan, what if the plan is unworkable?  What if there is no funding in place to carry out the plan?  What does it look like if you want to call it quits and retire?  Can you? As a business owner, you will leave your business someday voluntarily or otherwise.  When that time comes you will want to receive the maximum amount of money in order to accomplish your personal, financial, income and estate planning goals.  Succession planning is often thought of when two streams of thought begin to converge.  The first stream is the feeling that you want to do something besides going to work every day.  You simply no longer get the same kick out of doing what you do or would possibly like to do something different.  The second stream is the general awareness that you are either approaching financial independence, making significant strides toward reaching that goal, or can achieve financial independence through the sale of the business.  When these two streams converge, thoughts flow toward exiting the business.  This is when a Succession Plan should be in place and you should be able to leave when you want to, on your terms and on your schedule. Contact Terry Staley or a MarksNelson professional to help you get past your roadblocks and assist you with the development and implementation of a succession plan.  We work with a team of advisors to help you develop objectives, assess the value of your business and determine ways to maximize value, selling to a third party or possibly transferring the business to others, plus contingency and estate planning.

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Linda CampbellView all posts by Linda Campbell

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