Exit Strategies for Owners

Will your business take care of you, when you are no longer active, as well as you are currently taking care of it? Below is a real-life story:: 

Years ago, there was a man with a very successful business: let's say he re-chromed automobile bumpers (yes, truly a number of years ago). When asked what his exit strategy was, he pointed to his son and said, "there is my exit strategy, in the office.  He will take over when I leave, and continue paying me throughout my retirement." Several years later, I again visited this man at his business.  I asked him where his son was. Sadly,he told me  that his son had left six months ago, soon after our last meeting.  When I asked him why, he told me that when he went he (for the first time) approached his son about when he would take over the business, the son's response was," Dad, we never talked about this. I don't want to take over this business. I just need a job. I see how hard you work, and I have no desire to being doing this when I reach your age". Unfortunately, the business owner stayed in the business until he died; he had no market for his business and couldn't afford to quit. Quite simply, he didn't have a "Plan B".

How much will you get for your business when you are ready to get out?  Who will buy it?  What happens if you cannot sell it for what you want, or more importantly, what you need? When, if ever, can (or should) your child takeover? What about your employees? What's your plan B?

Is your business the biggest asset you have? Do you know what it is worth?  When will you know? How do you determine the value of your business?

What would happen to your business if you died or became disabled? How would it affect your family, employees, customers?

Do you have a partner? If the partner died, would you find yourself partners with their spouse? Attorney? Trust officer? Lazy child?  Will they want the same salary your partner had?  Can you buy them out, and how much willl it cost?  If you have family in the business, can they operate it as well as you?

Are you going to leave your estate, including the business, to your children equally, so you can "be fair"? Do you know that sometimes being fair may be the most unfair thing that you can do?

Some of these questions you have thought about, while others have never occured to you; may it's too much to think about so you just go back to work. Waiting until you have time or are ready to get out of the business is too late.  Please contact us. We can work with you and develop a process to address these areas, and save you the time to keep working on the business. Don't make a do nothing decision. 
 

 Here's another thought:
 

 Suppose you find yourself stuck in your car while crossing the railroad tracks, and a train is coming.. You have three choices:
 

1. Get out of the car and get to safety.

2. Stay in the car and hope something will happen to prevent the train from hitting you.

3. Decide to do nothing for now.
 

As you can see, option 2 and 3 will have the same result.
 

There is no such thing as not having a plan. Doing nothing is a conscious choice.