Succession Planning and Exit Strategies

As you manage your business and take daily actions that are aimed at helping it grow and be more successful, you are probably more focused on the now of your business rather than the future, especially as that future pertains to passing your business off to someone else. But no matter who you are or the phase that your business is currently in, there will come a time when you are no longer able to manage your business, or no longer want to own your business. When this time comes, having a succession plan and exit strategy in place is critical. At Harvest Wealth Partners, our experienced professionals can guide you in creating a successful plan for your business when ownership is no longer an option for you.

Common Exit Strategies for Business

Our team of experienced business succession planning professionals will review all potential exit strategies available, and help you select the exit strategy that is best for you. Some of the most common exit strategies that business owners employ include:

• Passing the business to a family member or other successor. One popular option for business owners is to pass the business to a family member, or another successor of their choosing at the time of retirement or death. This can make for a very smooth transition, but choosing the right successor and training them can no doubt prove difficult.
• Employee buyout. Another option for business succession is the employee or management buyout option. With this option, the employees/managers will pool their resources in order to acquire enough funds to purchase the business from the owner. This can be advantageous when the owner doesn’t want to put the business on the open market, and wants to sell to someone who will likely maintain business integrity and brand.
• Open market sale. Selling a business on the open market is one of the most popular options for small businesses. This process is pretty straightforward and involves the business owner learning the business’ worth via business valuation, determining a sale price, and listing it for sale.
• Business liquidation. Yet another exit strategy for business owners is business liquidation, which differs from the open market sale in that with the latter, you are selling the business, including business name and brand, with the intent that the business will continue its operations. With business liquidation, on the other hand, you sell all of the assets belonging to the business, thereby dissolving it.

Putting in Place a Succession Plan and an Exit Strategy for Your Business

The exit strategy that you want to employ depends on your preferences and desires for your business and your own personal legacy, as well as the market that you’re operating within and the opportunities available to you (i.e. selling a business on the open market for a reasonable price isn’t always an option).

At Harvest Wealth Partners, we can help you to design a business succession strategy that works well for your needs. We also remind you that if you put a plan in place now, we can always amend this plan at a later date if your mind or circumstances change.

To learn more about business succession planning and exit strategies for your Indiana business, contact our professional business financial planning firm by phone today at 219-864-5050.