Financial Planning and Goals: More steps in your exit planning strategy
Once you’ve begun to create your exit planning strategy by determining your business’s value, it’s time to consider your next steps: looking at your financial state and goals to determine your outcomes and acquisition goals.
First, it’s important to sit down with your financial advisor and discuss your options. Will you be able to live in the style to which you are accustomed after you retire? Will selling the business provide you with a cushion to help with unforeseen expenses down the road? By working with your financial planner you’ll be able to determine the resources you’ll need for financial stability after you leave your company.
Next, it’s also important to talk with your family, make lists, etc., to determine your mental readiness. Perhaps you’re the type of owner who is ready to go once you’ve helped with the transition, trained new owners, and made sure everything is running smoothly. Then again, you may just now be in the initial stages of considering an exit. Perhaps use this time and these discussions with family to decide WHEN the right time to exit will be. On the opposite end of that spectrum, maybe you know you need to go now. You’re burned out and it’s time to let go, for everyone’s sake.
Knowing these factors - your financial and mental readiness - is crucial to setting goals for finding the right buyer and the timeline for making this acquisition happen.
Above all, it’s important to be flexible. While you might think it will take 6 months or so to sell the business, which will give you time to mental prepare, you could get an offer in just 30 days. If that’s the case, be prepared to adjust your thinking and your time frame.
Most importantly, you need to have a plan, which is why we’re so adamant about working on your exit planning strategy. Why? Click here to read a brief story about one couple who failed to plan and what happened as a result.