Business Owners: 4 Reasons Why You Should Have an Exit Plan in Place

Sales, marketing, and keeping up with daily personnel issues always seem to be at the forefront of every business owner’s mind. However, long-term planning should be on your to-do list as well. Part of that planning is creating an exit plan or a succession plan. Although that day may seem far off now, it will sneak up on you sooner than you might think. Below are several reasons that you should start the planning process now—long before you need it.

  1.   It helps you choose the right business structure now.

Part of planning your exit means determining whether your business will continue after you are ready to retire. If you are the business, meaning that you have a sole proprietorship with few or no employees, the company may be done when you are—and that may be fine with you. However, if you want to sell the business as part of your exit strategy or pass it to a loved one, another business structure likely makes more sense. This could include a limited liability company, a corporation, or a family partnership. Any of those structures will make a sale or transfer possible.

  1.   It gives your people more security in their future.

Employees like it when their higher-ups, including the owner, have a “big picture” plan in place. It gives them purpose and security in their job. If they know you are planning to pass the business to a family member instead of just closing up shop, that will allow them to commit to the company in a more meaningful way. On the other hand, if you are planning to close the doors when you retire, your people can plan accordingly if they know that ahead of time

  1.   Planning often means you can get more out of your business.

Planning ahead for a sale of your business, for example, will force you to keep records and information that a buyer will want at all times. That type of data is actually useful for more than just buyers. Inventory records, accounts receivable, and other information can indicate whether you are struggling to get paid by certain types of customers, which products are the most popular, and a lot more. All of this information can also help you create a valuation for your business too. Assessments that can be done with short notice are great if you need an emergency exit plan, but they are also valuable if someone makes you an offer that seems like a good deal too.

  1.   Planning for retirement.

A business owner’s most significant asset is often their company. You may count on the continued revenue or the sale to fund your retirement. You may also need to know how the value of your business will play into your estate plan.

The right exit plan for you may not be clear right now, but you can talk to the professionals at Legacy Planning Law Group to help get some ideas, thoughts, and insight on what you should be doing to plan your exit. Contact our team by calling 904-880-5554 and get more information.

Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.

Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.