Monday 01/11/2021

Do I Need an Exit Plan for My Business?

Exit planning is not usually the first thing entrepreneurs and business owners are thinking about. The daily demands of growing a business often take priority over long-term planning, but it’s the long-term planning that can transition current success into something that lasts a lifetime. 99% of business owners say that their transition strategy is important to their future and the future of their business yet less than 50% have an exit plan in place.

I’m a small business. Why do I need an exit plan?

No matter the size of your business, an exit plan is vital to sustainable growth and long-term success.

An exit strategy, ideally, is part of an initial business plan, but really, any time is a good time to start planning for the day an entrepreneur or business owner sells or hands the business over to the next leader. By planning your exit far in advance, you’re able to more clearly set goals and benchmarks for your business to help it grow in the way you want.

Are there different types of exit plans?

For as many types of businesses there are, there are just as many ways to make an exit plan.

Depending on your goals, there are a number of options for an exit plan. Exit plans can include succession planning where you select and train the next owner/leader of your business. Exit plans may also focus on a business owner growing the business to a certain size and then selling it outright. What is included in an exit plan is entirely up to you.

It could be that you’d like to pass your business on to a loved one or you’d like to sell it outright. Maybe even a combination of the two. No matter your goals, the team at Corrigan Krause will work with you to help achieve them.

What’s the difference between succession planning and exit planning?

Succession and exit planning can go hand-in-hand. Depending on your goals, you may not want to plan for or train the next leader of your company. For example, if you plan to sell your business, either in whole or its assets, you may not need succession planning. In almost any other case, however, planning for your successor as well as your exit is important.

Your exit plan helps map the course your business may take while you are running it.

How do I get started on my exit planning?

It can be daunting to start exit planning. Corrigan Krause has two Certified Exit Planning Advisors ready to help, Tom Harrison, CPA, CEPA, and Dave Long, CPA, CVA, CEPA. It’s important to work with a Certified Exit Planning Advisor about your exit plan strategy because they are specifically trained in the nuances of exit planning.

In effort to maximize the value of your business and prepare for transition, the below five stages should be discussed with your team of advisors:

  • Stage 1:  Identify Value – Know what your business is worth and how it compares
  • Stage 2:  Protect Value – De-risk your business to protect its current value
  • Stage 3:  Build Value –     Implement changes to improve its value
  • Stage 4:  Harvest Value – Identify exit/succession options and tax efficiencies
  • Stage 5:  Manage Value – Secure your future income and the lifestyle you desire

Don’t wait. Start the conversation today by reaching out to us at info@corrigankrause.com.

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