Benefits of an exit strategy:
- Your family: Like estate planning, devising a strategic exit ensures you’ll protect your spouse or heirs from engaging in unnecessary decision-making & tax burdens by handling these things before they have to.
- Your retirement: Practically speaking, you want to maximize the value of the wealth your business can afford you, beyond your annual salary. Maybe the goal is a lump sum that will buy a vacation home in Palm Springs; maybe it’s an annual dividend that simply allows you to live without worry. Either way, it’s important to consider your own financial goals here—after all, you’re the one who built the business.
- Transition planning: Your employees and Board of Directors will likely work hard to help you achieve your exit goals, and it is in the best interest of everyone to facilitate a smooth transition. If you plan ahead thoughtfully, you can create certainty and stability during the transition.
- Maximizing value & growth potential: Whether you’re eyeing a $20M acquisition or just looking to grow aggressively, implementing tangible steps to ensure your financials are sound will improve your outcomes.