By Ashlee Ogrzewalla, CFP®, CFDA®, Vice President and Manager of Financial Planning & Marketing
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Starting a business is exciting and can bring many rewards. Once the business is up and running, an exit strategy is often overlooked but is essential to the planning process. An exit strategy is crucial for you as a business owner. Whether you want to sell outright or transition to a family member or key employee, the earlier you start the process, the better it will be for you, your business and your clients. Below are some benefits business owners enjoy once they have a strategy.
1) A well-planned exit strategy is not just a roadmap; it’s a gateway to financial stability and success. It’s a tool to help you sell your business for a profit, enjoy a well-earned retirement or invest in your next venture. Planning for the future ensures your business is set up for ongoing success.
2) More than just a plan, an exit strategy can provide peace of mind. Knowing that you have a clear path for your business’s future can significantly reduce stress and anxiety. This peace of mind allows you to fully focus on the present and enjoy the journey of building and growing your business, relieving unnecessary stress.
3) You can help ensure that your business legacy thrives with an exit strategy. By finding the right buyer or successor who shares your values and vision, you can pass on your business to someone who will carry on your legacy and build upon the foundation and success you’ve created.
4) Having an exit strategy is not just about your future; it’s also about the future of your employees. By planning for their future and ensuring that they are taken care of during the transition, you’re not just leaving a business; you’re positively impacting their lives and contributing to their success just as they have done for you. This sense of responsibility and care for your employees is a key aspect of a successful exit strategy.
5) An exit strategy can help you make informed decisions that align with your long-term goals. By focusing on the big picture, you can avoid short-term thinking and make choices that will benefit your business in the long run.
Salary and dividends from your business’s ongoing operation can provide for you and your family, but a well-planned exit strategy can be a payoff all its own, leading to financial stability, peace of mind and a business legacy. If you haven’t started thinking about the transition out of your business, consider starting the conversation. Financial advisors work with all types of business owners and can be a great resource.
IMPORTANT DISCLOSURES: The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.