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I see many successful business owners become so immersed with the day-to-day needs of their company that they give little thought to how and when they will ultimately leave their business. Urgent needs understandably demand our attention, but building your business with the end in mind will increase future value, minimize taxes, strengthen your management team, and provide peace of mind for you and your family.
What are some initial first steps in this process?
1. Talk with other stakeholders. It’s important that all key players have input to the transition planning process. At some point you need to communicate your thoughts and feelings to those directly affected by your future direction. If you have co-owners, discuss their future plans. What vision do they have for themselves and the business? And your family members—what are their expectations? Does your son or daughter really want to take over when you leave?
2. Quantify current financial resources and post retirement financial needs. Conduct a financial analysis of your nonbusiness assets and project their contribution to future wealth requirements. Secure, as well, a certified business appraisal to establish the baseline dollar amount you must receive from your business to support your exit goals.
3. Develop a written plan. A written plan provides a tangible road map that gets you to the finish line. It assures clarity and creates accountability. A formal working document provides action steps for all involved and measurements of achievement for securing your future transition.
Sun Exit Advisors
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