Let’s talk briefly about succession or exit planning from your business. You may think that time is a long way off, but it will be here before you know it. My hope is that the three paragraphs below will provoke you to think about the topic and then those thoughts will lead to action. It really is never too early to start thinking about how you will exit your business.
Succession Planning is a topic you either embrace spending time and resources on it; or you think, “I will get to that eventually.”
I am currently assisting two clients who are actively working toward transitioning out of their businesses. The first has been planning his transition for many years. When he was young, and selling his company was a very distant thought, he made some decisions. He consulted CPAs and attorneys, spent some money and laid the groundwork for the eventual sale of the business.
It was a lot like a farmer planting a seed in the ground. He can’t see it after the seed is planted. But he trusts with proper care and time the seed will become a full-grown plant to be harvested and sold.
Because of the decisions this client made decades ago, there are many options for him to use to exit his company successfully while maximizing the value paid to him.
The other client thought about succession planning, but did not take any action. Now, in the twilight of his career, we are scrambling some to create an exit strategy that will afford him the type of retirement he desires. Our options are limited as compared to the first client, and the result probably will not be quite the same.
My final thought is to encourage you to think about how you will exit your company.
Then, after you think about it start taking some action. Hire professionals and develop a plan. Your plan will probably change over time as your needs and dreams change. Your ability to work will come to an end, that is a certainty. How you transition into that phase of life is not certain. To have a positive, successful result you need to start now.
About Bowers & Company CPAs
Disclaimer: To ensure compliance with requirements imposed by the Department of Treasury, we inform you any U.S. federal tax advice contained in this document or video is not intended for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.