Exit Planning for Business Owners
The day you start or acquire a business is the beginning of your exit from that business. Whether you retire, die or become disabled, you will exit your business at some point. The only questions you can address are “when” and “how.” Exit Planning is the process to address these questions. Our Exit Planning Attorneys will help you plan for the single most critically important financial event of your lifetime – the transition out of your business.
The end result of the Exit Planning process will enable you to answer "yes" to the following seven questions:
- Do you know your exact retirement goals?
- When do you want to retire?
- How much retirement income do you need to live as you and your spouse desire?
- Who would you like to sell or transfer your business to?
- Do you know how much your business is worth today, in cash?
- Do you know the best way to maximize the value of your business, minimize taxes paid and preserve your business and personal wealth?
- Do you know how to sell your business to a third party and pay the least possible taxes?
- Do you know how to transfer your business to family members, co-owners or employees while paying the least possible taxes and enjoying maximum financial security?
- Do you have a plan for your business to continue if the unexpected happens to you?
- Do you have a plan to secure financial independence for your family if the unexpected happens to you?
Like Business Succession Planning, you have an Exit Plan today. Do you know what yours is? It is contained in your Will, any Trusts you may have, your Shareholders’ or Operating Agreement, your retirement plan and how you own your assets. Many people discover they have different and conflicting Exit Plans based on different documents they have signed and how they own their assets.
At its core, “Exit Planning” involves the following planning areas:
- Maximizing and protecting the value of your business;
- Business continuity so your business can operate without you;
- Ownership, control and management transfers related to your business; and
- Personal wealth and estate planning.
What does it take to create an Exit Plan?
- First, you must have a trained facilitator to work directly with you, the business owner, who drives the exit planning process and coordinates with your other business advisors to ensure that the plan is uniquely tailored to help you meet your objectives and that the plan is implemented properly. Our Exit Planning Attorneys are specifically trained to facilitate this process.
- Understand that there is a proven planning process. Learn as much as you can before you make final decisions.
- Commit to see the process through.
- Document your decisions and create a written plan and checklist.
- Hire an experienced team of professionals – Attorney, CPA and financial or insurance representative (at a minimum) to work with the facilitator to help you through this process. These professionals should more than pay for themselves by putting money in your pocket. If they cannot, you have the wrong team.
Setting objectives is the most critical part of this process. You can't know you're on the right track if you don't know where you are going. You must also realize that the different people necessary to make your Exit Plan possible have different objectives that your Plan must consider. The goal is to create an Exit Plan that every necessary person agrees to support and implement.
Exit Planning is not a one-time process. Your Plan is a living document that must be continually measured and adjusted as your circumstances and objectives change.
Click here for an overview of our Exit Planning Process.
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