Exit Planning is a Must for Business Owners

Happy Friday all,

Over the past week, I read Walking To Destiny by Christopher Snider, CEPA. Here are three takeaways I think everyone who owns a business or is a partner in one needs to think about more often.

1️⃣ No matter what stage of business you are in, you need to start thinking about what life beyond the business looks like. People find meaning in their work, and thus, it becomes a part of their identity. When someone exits (sell, retire, etc) many people find it difficult to find meaning in their lives and end up regretting the sale.

2️⃣ Be realistic about what you are selling and the value. Many business owners think in terms of income...how much money they will make from getting a new customer. Start thinking in terms value add to the enterprise. Additionally, if the business cannot survive without you, then you might not have much of anything to sell. If your business is where you are the end-all-be-all and nothing gets done without you, then your business might not sell for the price you had in mind...or at all.

3️⃣ Your business can be more wealth building if you can optimize and exit. According to the book, 90% of family owned wealth is tied up in the value of small privately owned businesses. However, only a small number of these businesses will get to sell and realize the wealth stored up.

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