“By failing to prepare, you are preparing to fail.” More than 300 years ago, Benjamin Franklin understood the importance of planning for success in any situation. Today, this adage remains true in many aspects of life, particularly when you are planning for your future.
Recently, I had the chance to participate in two roundtable events with the Denver Business Journal‡ and Ingram’s Magazine‡ to discuss the importance of planning ahead for business owners. Research shows that many business owners have no exit planning in place even though they are likely to sell within the next 10-15 years.
Knowing this surprising reality, I wanted to share a few insights from these events that resonated with our audiences. I also invite you to read the full articles for a deeper dive into this conversation.
Business Exit and Succession Planning: Get the Right Team Together
It’s important for businesses to have partners who know how to navigate business exit and succession planning. Some of these trusted advisors you’ll want on your side include a tax advisor, financial planner, investment advisor and investment banker, to name a few. You want partners who understand the time, process and intensity it takes to get your business ready for a transition.
It takes time to get a business ready to sell, oftentimes around three to five years. The sooner you can start preparing, the better chances are that the eventual sale will go smoothly and that the business will continue to function well leading up to and after the transition. During this planning window, you will also have time to be thoughtful in your decision making, have a clear direction on your plans, and think about what life will be like after the sale.
For many, selling a business is a personal, emotional decision. After all, you have spent years building your business, and it is an important part of your life. This is where it’s important to have partners who are there for your best interest as a business owner and an individual and can help you navigate this time in your life. It is critical to have someone who can take some of the emotion out of the situation to help avoid rash or poor decisions.
Timing is everything to successfully transition your business – and that timing varies for everyone. Regardless of when it is right for you, a phased and thoughtful exit plan provides long-lasting protections and peace of mind, which is the reward for years of hard work growing your business.
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