Have you started to think about what will happen when you sell your business? Most business owners wait too long to consider how they will make an exit, and many remain unaware of their options until right when they need to make a critical decision about their operation.
Additionally, many of the business owners we work with and provide business financial planning services to often run into issues like expecting the business to be worth more than it is or having to leave their business quickly because of an external situation, such as distress, a disagreement, a divorce, or a death.
This recent article from Barron’s included some pertinent advice about business financial planning and exit planning, and we also wanted to provide some of our advice that aligns with this same topic.
- Instead of waiting until you have a potential buyer for your business, come up with an exit plan as part of the business financial planning process. (This should also include potential retirement goals.)
- It takes time to sell a business. Start looking at your options years in advance.
- The first step when you start developing an exit strategy is to work with the right team of professionals who will set you up for success.
- Business valuation plays a large role in the sale of any operation, but this process may also include tasks like getting detailed financials in place and restructuring.
- If you plan on selling your business to a family member, the preparation process will look similar to a traditional sale. This could also affect your personal estate plan.
- Even though it can take some time to sell your business, the right timing is important. Waiting too long can pose certain challenges while starting too early can make certain factors no longer applicable when the time comes to sell.
We understand the basic mechanics of everything that goes into selling a business, and we can help you understand what this process will look like for your unique situation. We offer business valuation services provided by our professional partners, can point you to trusted accounting professionals, and can even help you restructure your business if that becomes a requirement. After your business sells, we are also here if you need to reformat your financial life plan.
If you are thinking about selling your business in the next three to five years, start the conversation now. Our business financial planning team can help you along the way.