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Monthly Business e-Tips Vol 3
Issue 3

Where Will You Be Five, 10 Years From Now? Part 1

Most people do not want to work forever. Business owners feel the same, whether it’s three, five or twenty years away. But the point is, there is a beginning, middle and an end to the life of every business. If you plan for it, you will have the opportunity of designing an ending that is right for you.

The choices are yours to make. You can run your company into the ground because you are tired, bored or your products are irrelevant in the marketplace. You can work until you drop. You can sell your business to competitors, strategic partners or someone else. You can give or transfer it to your children, a favorite niece or nephew or key employees. Another option is to close it and sell off any accumulated assets. There is always the possibility that your business may outlive you.

Start thinking about how you want to exit your business while it’s at a strong point. Build it to create the value you need to get the most out of your sale or other exit strategy. If you do, you will be prepared and get the most financial reward you can for your years of devotion and toil.

Here is why it is important to plan for your exit:

  • Keep control of your exit plan. Then it doesn’t become something that happens to you. You will have the power over what occurs. When you don’t stay on top of and plan for your future, you become the victim of your inaction which can have a debilitating emotional impact on you. Most business owners’ identities are interchangeable with their businesses. Losing your business suddenly can be devastating.
  • Make provisions for your family’s financial future. Often there is too much equity tied up in the business. If there is an unforeseen death or critical illness, your family’s financial security could be at stake. A legal/tax quagmire could ensue.
  • Assess how much of your business relies on you personally. If your business depends on your personality, its value without you could be limited. Take steps to empower employees to make decisions, make sure they provide optimum customer service and create a culture that reflects you and your values.
  • Your key personnel are important to your business. Succession is not just for the owners. What would happen if any of your key people decide to leave or something happens to them? Most business owners are not equipped for that type of loss. Make sure you and your managers are mentoring employees to step into critical positions.
  • Develop family or employees to be ready to take over. You need to prepare a leader to succeed you. Whether or not you sell your business, you need to have someone in waiting if the unexpected happens. It is an insurance policy. Succession planning is a process, not something that happens suddenly. The transition should be gradual and well thought out.

In addition, be prepared for what is next for you. You may be thinking about starting a new venture, playing golf or traveling in the future. The list continues depending on your interests and financial needs. Selling, transferring or retiring from business is a major emotional change. You should have some definite plans even if they are not immediate. If you just stop working suddenly, it can be difficult. Don’t let it happen, think it through. It can be wonderful!

The next issue of Growing Possibilities will continue its discussion on preparing for your business exit.

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