One of the most significant decisions you will face is how to eventually exit your business. There are two primary exit strategies for small business owners: selling the business or passing it on to the next generation.
Understand your options to build a comprehensive succession plan or business exit strategy.
Selling your business
Selling the business provides you with financial rewards as you hand the business over. For a successful sale, you need to accurately determine the value of the company. Fair and competitive pricing encourages a timely sale.
Not only that, but you should also take time to prepare for the transition. Organize all of the company records so that you can hand over the business in a current, accessible status.
When you sell, it provides you with proceeds that you can invest or use to fund your retirement.
Passing the business on
If you have a loved one with the skills and experience to take over the business you built, consider a succession plan that defines how and when the company transfers into his or her ownership. This provides you with the opportunity to determine who will carry on your company’s legacy.
Consider a gradual transition if you plan to hand over the business for retirement, though you might also want to have paperwork in place to define ownership transfer requirements in the event of your death.
Despite the importance of planning for your company’s future, research shows that 58% of small business owners have no succession plan in place. Protect the company you built and your financial investment with the right long-term planning.