Like sands through the hour glass, the eventual winding down of your business (or your role in your business) is inevitable. But even if your New Year’s resolution is not to commence the move towards exiting your business, planning your escape should not be left until it is unavoidable due to age, health or circumstances. The best time to consider viable exit options is not 12 months or even 2 years before you intend to leave, but within the first 5 years of establishing your business.
The most appropriate exit strategy will depend a lot on the structure of your business, but the usual options are:
1. Selling your business
If you are not interested in creating a family dynasty to rival the Murdochs and one of your business assets is a good reputation then selling is a desirable outcome. To make this strategy viable your business needs to develop more than a good reputation, it needs genuine saleability. That means you can easily sell your business because it is not comprised solely of YOU. A business that is selfsustaining is one that someone will pay money for, but achieving that status is easier said than done. In 2013 we can help your business take off the training wheels and ride solo.
2. Winding up your business
Whilst this strategy is generally more appropriate for sole traders or solely web-based businesses, it can be worth considering if only for the easy, fuss-free process. If you are satisfied with the income generated throughout the life of your business and do not need it to provide a retirement nest egg, then with the help of your professional advisers, it really can be as easy as taking your bat and ball and going home.
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3. Passing on the reins of your business
You want to hand over your successful business to the next generation of family, friends or employees. Sometimes the changing of the guard may involve some complex restructuring. You might want to consider a degree of ongoing involvement and/or arrangements for a continuing salary or pension. Like all business dealings (especially with family and friends): get it in writing. The deal may have been struck over several beers, but it is not enough. We can sort out the formalities, so the beers you enjoy during 2013 are not the disputes of 2014.
Make it your 2013 New Year’s resolution to plan an exit strategy that will leave you financially and emotionally secure. If you make the resolution we can do the hard work to keep it.