Published on: February 1, 2017
Whether you are creating a business plan or currently running your business, it is crucial to have an exit plan in place. Often one of the most overlooked elements of what makes a business successful, creating an exit strategy can set you up for an effective exit, regardless of the reason(s) you are leaving. Getting assistance from experienced business lawyers for an exit strategy can help the strategic direction of your company and ensure an easy transition when the time comes to hang up your hat.
Why is having an exit plan so important?
An exit plan is extremely useful when unexpected events such as financial hardship, injury, disability or death occur. It is also essential whether you are exiting due to retirement, selling the business, transferring it to your children, or going public. Regardless of the reason you are exiting the business, failing to have a business exit plan in place may limit options for you and your successors.
Benefits of having an exit strategy in place include:
- Peace of mind, knowing that you can exit your business profitably.
- Preserving the value of the business you have built.
- Creating a smooth transition for buyers, your management team or family members.
- Ensuring income for retirement or in the event of an injury or disability.
- Increasing the current and future value of your business.
- Decreasing the potential tax impact on your estate.
- Creating a strategic direction for your business’ growth.
How do I create an exit plan for my business?
Develop a Business Succession Plan
Creating a sound business succession plan can make exiting your business a smoother process. Different kinds of businesses have different needs, so seeking the counsel of seasoned business attorneys who can provide direction on which options are best for you and your successors is essential. Many business owners are not only financially but emotionally invested in their businesses, and family dynamics can play a complicated role in many small businesses. Having an impartial party such as an attorney to help you determine your goals, needs and options can mean the difference between a successful, streamlined exit and a messy one.
Retirement & Estate Planning
Retirement and estate planning often goes hand in hand with business succession and exit planning, as there are many different strategies that can be employed when exiting your business. Whether you are seeking a more limited role in the business, passing it on to family members, or selling it to your management team, experienced wills and trusts lawyers can provide solutions such as trusts and family limited partnerships that can help to minimize tax liability for both you and your successors.
Ideally, an exit strategy should be planned at the outset of a business and reviewed and updated every few years. In established businesses, focusing on day-to-day operations and competing in today’s volatile economy often take precedence over exit planning, but the sooner a plan is put in place, the better
prepared you will be when the inevitable exit occurs.
Carosella & Associates’ experienced lawyers in Delaware County can create an effective exit strategy that will help you, your business and family attain personal and financial success.