By Brady Marlow, CFP®, AEP®, CAP®, CPWA®, CExP, Wealth Strategist
Many business owners are so consumed with growing their business that they have trouble planning for a successful exit. Not just how to eventually exit, but how to do it successfully.
So how can you turn planning your exit into profitable, value-building action steps for your business?
First, let’s consider why you might be avoiding the development of a written succession and exit plan.
- It is unnecessary because the future is unknown.
- You do not have time.
- You already have it in your head.
- It’s too soon.
It is never too soon. Building your business to sell from day one will increase the value of your business and empower your employees. Even if you never intend on selling your business, reducing owner dependency is a powerful way to diversify your wealth.
Starting with exit planning building blocks now will help you visualize the future, give you more time, get ideas out of your head and thereby create alignment among your team.
3 Easy Steps to Begin Business Exit Planning Today
- Conduct a mock due diligence. Astronauts conduct test run after test run. Now, the due diligence checklist may not be as extensive as a Mars trip checklist, but if you have ever been through the due diligence phase, it can sure feel like it. This process will get your house in order and ultimately create more efficiencies in your business.
- Write a “Break Glass in Case of Emergency” guidance letter. What if you don’t show up for a day, a week, a month? Does your business have an operational continuity plan? Does your spouse or family know where all the keys and secrets are located? Do them a favor by listing advisors, other critical relationships, procedures and your general guidance on how you would like the business run.
- Ask yourself these four questions: When do I want to exit or change my relationship with my business? Who will own my business next? Who will operate my business next? How much money do I need out of my business? Then, write your answers down.
Congratulations, you have just started your written exit and succession plan.
Need more guidance? The Wealth Strategists of Carson Private Client are well-versed in guiding business owners toward a successful exit strategy. Schedule your Carson Private Client consultation today!
Brady Marlow is not registered with Cetera Advisor Networks LLC