Business Exit Planning

“Begin with the end in mind,” says Stephen Covey in his book, The Seven Habits of Highly Effective People. Those who have created a successful business know it does not happen without planning, hard work, sacrifice, and a little luck. Yet most have no exit plan for leaving their business.

Business exit planning (sometimes called business succession planning – but much broader in scope) helps owners set, sort through, and achieve their exit objectives. It enables owners to leave their companies when they want, to the successors they want, and with the amount of cash they need, while minimizing the risk of loss and taxes.

Most business owners create a business plan when they start their business. They plan the growth of their business and yet they fail to plan their exit from the business.

Exit planning involves answering “Yes” to the following seven questions:

1. Do you know your exact retirement goals and what it will take—in cash—to reach them?
2. Do you know how much your business is worth today, in cash?
3. Do you know the best way to maximize the income stream generated by your ownership interest?
4. Do you know how to sell your business to a third party and pay the least possible taxes?
5. Do you know how to transfer your business to family members, co-owners, or employees, while paying the least possible taxes and enjoying maximum financial security?
6. Do you have a continuity plan for your business if the unexpected happens to you?
7. Do you have a plan to secure financial independence for your family if the unexpected happens to you?

How a business owner answers these questions will determine how successful their plan will be. Taking clients through a formal seven-step process, the Sheffield Law Office works with clients and their team of advisors to create and implement a business exit strategy. This strategy will maximize the value of the business and minimize taxes, while securing the financial future for the business owner and their family.