Many business owners dream of the day they can exit their business. We find that there are at least 7 steps in the process of learning to control how you leave the business. The first step is to understand the ways in which you can leave.
We believe there are only four ways you can leave your business
- Selling to an outsider or third party.
- Passing your business to family members.
- Passing your business to managers
- Liquidating your business.
The unfortunate fact is most business owners don’t exit their business the way they would like to. When it becomes time to leave, their preferred exit doesn’t occur because they haven’t done pre-planning and haven’t taken appropriate actions that allow them to leave their business.
At Stage 2, we help those who want to plan an exit from their business and guide them with the appropriate steps along the way. Preparing to leave your business is often a multi-year process with multiple steps that should be taken to make an exit more successful.
Planning a business exit is often accomplished by following some or all of these following steps:
1. Deciding the best avenue to take when leaving your business.
2. Deciding whether you want to exit your business or become a passive owner of the business.
3. Systemizing the business so others can run it after you leave.
4. Having adequate management in place so you have a choice of who to pass the business to.
5. Planning to make the business profitable enough so new owners can afford to pay the price you want.
6. Having “stay bonus” plans in place for your key people.
7. Identifying and implementing key performance indicator measurements.
8. Memorializing mission into all aspects of the company.
9. Including tax planning for your exit.
10. Integrating financial planning before and after you leave business.
11. Understanding what’s next for you after you leave your business.
The more systematic your business, the easier it is to use the exit you choose. We believe that if planning and implementing an exit would make your life better there are best practices that can make the transition more efficient and profitable for you. Implementing these best practices will often make a transition smooth and efficient.
For those who are interested we offer a complementary exit planning report. Click on this link or the button below to find out more about this offer.
