Exit Planning is NOT the Same as Selling Your Business

Do you remember the old adage, “Nothing is certain but death and taxes”?  Well, add one more item - exiting your business.  The question is:  will it be on your terms?
 
This Number Tells A Sad Story
 
The Exit Planning Institute (EPI) has found that over 75% of business owners who have exited their business ‘profoundly regretted their decision.’  Seventy-five percent! What’s going on here?  Wasn’t the whole goal to create something of value that you could convert to cash one day and retire? Wasn’t that the dream?
 
A Dream Without A Plan Can Become A Nightmare
 
It turns out the dream can only become a reality if there is a plan. Problem is that owners don’t prepare an exit strategy early enough and specifically one that goes beyond the transaction of the sale. Unfortunately, too often business owners keep everything bottled up inside, don’t communicate with key executives or family, and then get to a point where they just say, ‘I’m done’, without taking the time to make sure the outcome is what they want. The business transition minefield is littered with things like ill-prepared children to take over the business, unprotected key employees, cultures that become toxic, or no plan to transfer knowledge and critical relationships. 
 
The Mind Shift Needed for Success
 
Here’s the mind shift that needs to happen with business owners – the exit planning process is 100% separate from the selling process.  Exit planning is conducted over several years and includes things like driving growth, planning for taxes, enhancing business value, developing the management team, grooming a successor, planning your personal finances, and preparing for the next stage of life.  The selling process typically takes place in the last 3-5 years of ownership.  It’s like putting for birdie on a par 5 – you don’t get there in one shot.  You must work to set yourself up for success. 
 
You typically only get one opportunity to do this right. Make it a priority to assemble an exit planning team that can help you think through your moves and create a win-win for everyone.