Happy Exits
Certified Exit Planning Advisors support business owners as they prepare to transition from “owner” to “retiree.” Exit strategy should begin with clarifying a vision for the owner’s next chapter. The best exits happen when pull factors are as strong as push factors.
Five Not-So-Simple Steps for Exiting Your Family Business
Exiting a family business is one of the most significant transitions you’ll ever make. We recommend you give yourself five to 10 years to properly plan for your exit while getting your successor, and organization, ready for so much change. Whether you’re retiring, seeking new opportunities, or reducing your risk exposure, planning your exit strategically can ensure you maximize value and maintain family harmony while leaving on your own terms.
Here are five not-so-simple steps to create your happy exit, with a link at the end to download a free resource that will help you think it all through.
1. Know Why You’re Exiting
Before making any decisions, get clear on your reasons for exiting. Are you being pushed out by challenges like burnout or health issues, or are you being pulled toward new opportunities, travel, or family time? The best exits happen when pull factors are as strong as push factors.
2. Choose the Right Exit Plan
For those who have decided to keep ownership in the family, your next step is structuring the transition. A family transfer typically happens over time, using company cash flow to buy out your shares while the next generation steps into leadership.
Keep in mind that there are several paths for exiting the day to day operations of your business. Our free download (link below) discusses the pros and cons of each.
3. Determine Your “Number”
Your business’s market value is important, but so is understanding what you personally need from the sale. If retirement is your goal, calculate how much you need to generate enough passive income. If you want to reduce risk, determine what portion of your wealth should remain tied to the business.
4. Decide on Your Future Role
Do you want to walk away entirely, or are you willing to stay involved? Options include remaining as a shareholder, serving as an advisor, or financing part of the sale to ease the transition. Flexibility creates options for you, and the next generation.
5. Pick Your Spot on the Exit Matrix
Your final step to a happy and lucrative business exit is to pick your spot on the Exit Matrix, which corresponds with two factors:
How important is it that you maximize the cash proceeds of a sale?
How long are you willing to stay on post sale?
We walk you through much needed deeper thinking in The Exit Checklist, our complimentary download. As helpful as this eBook is, it won’t replace a consultation with a Certified Exit Planning Advisor. Reach out to me directly at lisa@lisa-bosse.com.
Free Download
Planning your exit is too important to leave to chance. Download The Exit Checklist to take control of your transition, maximize your business’s value, and set yourself up for a successful next chapter.
