The Owner Has Left The Building
How To Choose A Business Exit Strategy
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There are only a few exit strategies Ohio business owners can
choose from, and each selection will impact your personal finan-
cial situation for the rest of your life. That being said, all strategies
will require planning and time to implement. In fact, it’s never too
soon to start planning your exit. After all, you will leave your busi-
ness eventually, and it’s better to do so before a life-changing event
forces you out. The sooner you plan, the more options you’ll have.
Evaluating Your Exit Strategy
Maybe you already have a plan for how you’ll exit your business.
But do you know the value of your business? Do you know what
your after-tax proceeds will be? Will this amount, along with your
other assets, provide you with the retirement you desire? After see-
ing how your plans play out on paper, can you retire the way you
want to? If the answer to any of these questions is “no,” you might
need to consider a different business exit strategy.
Picking the Right Exit Strategy
But what if you don’t know which exit strategy you should choose?
How can you make a decision in this important area?
The truth is that it will take time and hard work to make sure you
have the right plan in place. Consider taking the following steps
during the next 12 to 18 months to bring you closer to having a
well-defined exit strategy and succession plan:
• Study the advantages and disadvantages of each exit strategy
and how each one will impact your ability to get to your end goal.
• Estimate the net after-tax proceeds you will obtain from
each option.
• Reflect on how your exit will impact the future of your family and
your company’s employees.
• Have a plan for how you will spend your time after leaving the
business.
• Maintain an open dialogue with family members, key employees
and advisors about your preferred exit strategy and how it will
impact them.
• Select the strategy that best meets your personal, financial and
family goals.
• Give yourself enough time to start the implementation
process early.
Maximizing your value and understanding your exit strategy op-
tions involves more work than most realize. Taking deliberate steps
to prepare for the sale of your business will greatly improve your
chances of a successful transaction. Give me a call at 614.923.6532
to start planning your ideal exit strategy.
By Tim McDaniel,
CPA/ABV, ASA, CBA,
principal,
[email protected]
(Dublin office)
Listen to episode episode 116: “your baby (business) is all grown up ... so what’s next?”
on unsuitable on Rea Radio, to learn more about the importance of choosing an exit strategy
several years before it’s actually time for you to retire. www.reacpa.com/episode-116
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