One of the most costly mistakes I see business owners make is to fail to develop an exit strategy before deciding to sell their business. Ask any serial entrepreneur and they can attest to the importance of developing an exit strategy early in the life cycle of a business.
Developing an Exit Strategy
Why is an exit strategy so important? An exit strategy helps guide business owners when making business decisions. Instead of just only thinking about the present, it forces business owners to think about the long term impact of the business decisions they make, and whether they effectively add value to the business.
In many situations, the value of the business is the business owner’s greatest asset. A few of the benefits of having a well thought-out exit strategy are the following:
- Peace of mind. All too often, business owners will skip on putting money away in retirement accounts, choosing instead to reinvest it into their business. By having an exit strategy, you help protect what is possibly your most valuable asset.
- An exit strategy provides strategic direction for business growth.
- It also increases the future worth of your business.
- A good exit strategy protects current employees and provides for a smoother transition for the new owner.
- Finally, it helps reduce the tax impact of the sale of the business.
If you would like more information on how an exit strategy could help maximize the value of your business, give us a call today!