Exit strategies for business support the lifestyle you choose, independence you can preserve, income that will last abundantly, and an estate to preserve family and philanthropy. Healthy strategies toward sale of a business are also vital to communities that want to protect and increase employment. Everyone wins when we can get this right.
Exit strategies for business ...since 'opening day'
A business owner was sharing with me the challenges that arise for an owner thinking to exit their business -- and when they should begin this journey.
Exiting the business was on Sue's mind from the first day she opened it! Somehow she knew her role in building the business was to sell it. She told me people have been shocked at her perspective; they say there's always too much to do, and never time to think of preparing for sale. But Sue has been wise. She built a business for a purpose and service in community, and kept in mind she would someday need to unlock this value so she could move into retirement when she chooses.
Dozen reasons to delay preparing your exit
While a business owner may want the pride and joy of unlocking their fortune as they sell and exit the business, what forces may lock them into never selling? Here are a dozen reasons people have told me through the years:
- I'm busy today and don't want to stop.
- I can't afford to retire -- I don't have enough money.
- My wife said I can't retire -- that we don't have enough money.
- I don't know what I'd do with myself when I eventually sell my business.
- I'm waiting for my children or team members being ready to head the business.
- I haven't prepared a way to mentor my children or team to take over the business.
- I've checked, and my business isn't attracting the price I want, what I feel it's worth.
- I've don't want to stop paying some of my personal expenses from the business.
- I want to keep my health coverage ....which is inside the business.
- Someday if I get a major health problem, then I'll sell. (ouch!)
- My family or partners can sell or close this down after I die.
- No one else can keep this business going like I can.
Popping the cork with exit strategies for business
Are you thinking what I'm thinking? We could discuss any of these excuses for delay, and come up with solutions to protect the owner(s), their family, as well as the community value of this enterprise and its employment. None of the above factors needs to bottle-neck sale of a business. With preparation personally and corporately you can attract value and terms you're willing to accept.
Consider some stories I'm sharing among learning modules on this website (GuaranteedIncome4Life.ca) and many of them are also in my book, A Lifetime Of Wealth -- And How Not To Lose It. http://www.ALifetimeOfWealth.info/
Two of our stories to celebrate results
Tom wanted to sell his business. Buyers weren't offering the price Tom felt he needed. We looked at income strategies to fulfill lifestyle and bucket-list goals to age 95+ ....based on offers he had been receiving. This gave Tom and his wife the freedom to negotiate with less pressure about the price. (See more at http://www.ALifetimeOfWealth.info/)
Beth cleaned up her share of bottle-necks and gained $3Million after tax. With this she secured income-mandates with $2Million while targeting $1Million for a venture among her children. Beth freed herself to travel widely and enjoy life as she chooses, while also being an angel and mentor for the next generation's enterprise. (See more at http://www.ALifetimeOfWealth.info/)
Alternatives to avoid (don't get stuck in these!)
Fred in his role as controller said the business would never sell because the owners wanted nearly double what the market would pay. The owners' personal identity, comfort in showing up at work, habit of drawing large sums of money out at will, and an absence of other things to do in life, contributed to an out-sized opinion of what they felt their business was worth. If we hadn't found other ways to approach these gentlemen their business might have folded worthless.
Another told me that at 82 years of age he'd never sell his business. He said, "I have to keep working another 9 years because then all my staff will have retired and I can close this place down." I admire his kindness and the loyalty he and his staff have for each other. But instead of coasting to the end of the track, what of the larger picture if fresh hands could build existing strengths into new product lines and wider geographic footprint!
Death and delay are not the best exit strategies for business. Such will sabotage the value you can unlock for your own life and for family and estate. And remember the other families whose work, home payments, lives today and future, depend on how successfully you can prepare a healthy exit.
Designing your own exit, and a team to build results
What can you learn about exit strategies for business which can assure the value you need and the lifestyle you want to enjoy?
Have you envisioned how you want to be enjoying life beyond this business? If that's what may be holding you back I've added other resources on this website to help people create the story and envision the future of your dreams.
Is a certified financial advisor aligning the life you want with the wealth you've created? Can they build and nurture your confidence in a life-income that will serve you forever?
Consider your family, team members, friends and professional advisors -- everyone who can be a resource for you. Are you consulting these people to equip you and ensure you're moving ahead with strategies and solutions to secure the results and the life you seek? (Also see video discussion here.)More in our learning modules at: guaranteedIncome4Life.ca Amazon or Kindle: "A Lifetime Of Wealth -- And How Not To Lose It." “Subscribe” — see on this page — to get upcoming insights and updates. Brian Weatherdon, MA CFP CLU CPCA MDRT