Ready to Retire From Your Business? Avoid These 4 Mistakes

You’ve poured a lot of time and effort into building your business and watching it grow. In fact, you’ve probably built a contingency plan to troubleshoot any emergency that’s thrown your way, but what you may not have thought about is an exit strategy. OK, maybe you don’t feel ready to retire or even plan for it. But that’s a mistake. There’s a great deal of uncertainty that can impact your business without a well-defined succession plan in place. You might think it’s a given that you’ll hand the business over to a family member. But what if you become unable to run the business before your family is prepared to take over? Or perhaps you’re banking on the money it will bring in when you sell it. But what if it isn’t worth what you’d hoped? To guarantee stability when it’s time to leave your business, you need to plan accordingly. Use these four tips to avoid common retirement mistakes: 1. Don’t Assume That Your Family Members Want the Business If it’s important to you that your business lives on after you hang up your hat, make sure your family is fully prepared to take over. It may seem obvious to you that your family will step in, but that isn’t necessarily the case. You need to make sure someone in your family wants the job, is qualified for the responsibility, and can make smart business decisions. Properly groom your successor to ensure the business prospers. 2. Don’t Linger Once You Let Go Whether you gift your business to a family member or sell it to a trusted employee, you need to be able to let go. This can be difficult because of the emotional [...]

Why Now Is the Time to Start Planning Your Exit Strategy

Thinking about the end is never fun. Neither is planning for it. So it makes sense that business leaders would avoid planning for the day they sell their company or step down from their role. Without a clear exit strategy, however, you could be putting your company, your employees, and your own future in jeopardy. Don’t wait until it's too late T every aspect of succession planning takes more time than you might realize. If you don’t start this process early enough, you could spend years running your business in a way that sabotages your own end goals, depletes your resources, or cripples your negotiating power. Companies that lack a well-designed succession plan can also be left weak and vulnerable during the transition period, making them easy targets for competitors. Preliminary planning is incredibly complex and should begin at least 10 years before you plan to close or leave the company. Here are four crucial actions you need to take when planning your exit: Create a financial plan in advance. When the time comes to explore retirement options, you don’t want to be forced into a bad business deal due to poor planning. Meet with a financial planner at least 10 years ahead of time so you can figure out how to run the business in a way that will make it profitable and appealing to potential buyers or leaders. Determine your company’s valuation. Most business owners don’t know their companies’ true value. In fact, many tend to overestimate the value, which can create problems when it’s time to sell. Work with a business valuation expert or firm to understand your business’s worth. Have your expert do a benchmark valuation 15 years before you’d like to retire [...]

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