What will your financial needs be once you retire?
While many are lucky enough to have an adequate pension plan that will provide for them post-retirement, you might not classify yourself amongst these. Don’t let this realization overwhelm you too late in the game. Consider what your needs will be based on the lifestyle you intend to lead following your retirement, and begin planning accordingly.
When do you intend to exit your business?
Having a time frame for your exit will allow you to plan accordingly, and help sell your business for its maximum value. For further information on this topic, see our simple tips on how to successfully selling your business.
Who will replace you once you have moved on from the company?
Are you intending to sell your business to family members, employees, or to an outside buyer? Determining who will take over you business once you are out of the picture will:
· help minimize any potential conflicts that may arise, particularly within your family
· help you identify how to allocate your time and efforts in training an adequate successor
· ensure your business will survive without your leadership
Do you know the true value of your business?
Business owners often have an inflated view regarding the value of their business. The true value of it however is dependent upon what buyers are will to pay for it. By not considering this factor you may be leaving your business to chance, and allowing inordinate amounts of value to be overlooked. It’s important to engage in professional valuation services to obtain a clearer picture of where your business stands and the range of prices it will go for.
Are you doing everything possible to maximize the value of your business?
Obtaining a professional valuation will not only tell you the true value your business is worth to the market, but it will also give you a clearer picture of what you can do to increase this value. Often such suggestions are quite simple to follow and can increase the price of your business tremendously. Don’t sell your business for the minimum – let it be bought for its maximum value.
Are you using the right team of advisors to help you through the exit planning process?
If you have never exited a business before the process will overwhelm you, and attempting to do it all yourself can cost you significantly. A good exit plan requires a number of different experts in their field to guide you through the process. A typical advisory team will include an accountant, a banker, a financial adviser and lawyer. Because these professionals have no emotional involvement in your business, they will be able to remain focused on the prize, and provide their guidance without bias.
By not creating an exit planning strategy you risk being hit by the door on your way out – literally. Don’t build yourself up for failure simply due to lack of planning. By beginning your exit planning process early on not only will you ensure its continuity once you have stepped out of the picture, but you can rest assured you will receive the adequate compensation for all the time and sweat equity you’ve invested into your business.