• Estate planning 
• Retirement plans
• Financial requirements 
• Mergers/acquisitions/sale
• Heirs
• Liability issues 
• Current management
•  capabilities
• Tax planning
• Timing and phasing 
  
  

Step 1. Decide whether or not you are going to plan your exit strategy. If your answer is to plan, go to step 2. If you choose not to plan, you have by default selected the "work until I drop dead" strategy.

Step 2. Decide the most likely buyer of your business if you were to sell right now. Is it a family member? An employee? An investor? A competitor? A synergistic buyer? Your partner? Should you go public? Should you sell the business to a relative or management through a recapitalisation plan?

Step 3. Develop the estimated market value of your business to that likely buyer.

Step 4. Estimate your CIP (Cash In Pocket) after taxes from selling or transferring your business to that likely buyer.

Without planning, combined taxes on selling and on the estate can be over 60%, sometimes as high as 70%. With proper planning taxes can be deferred, reduced substantially, and in some cases, eliminated. For tax reasons alone, every owner of a privately held business should have an exit strategy plan.

Step 5. Evaluate the CIP with reference to the cash you want and need to live the rest of your life. If the CIP is enough to meet your objectives, go to Step 6. If it isn't, go to Step 8.

Step 6. Do you want to do other things for the rest of your life? If yes, sell the business, enjoy life. If no, go to Step 7. Most privately held businesses sell because the seller has non-monetary issues to resolve. The owner has some family or personal goal that is more important than the long term cash flow benefits of the business.

Step 7. The risk you have in continuing to operate the business is that something will happen to decrease the value of the business.

Even if you are years away from stepping down, there are recapitalisation strategies that allow you to unlock a portion of your wealth without giving up control. 

Step 8. If your CIP is not enough to support you in the lifestyle you would like, then you need to develop a program to make the company worth more. That calls for a strategic plan.

Step 9. You have three choices:
You can wait it out. The longer you wait, the less money you need to live the rest of your life. 
You can transfer the business, and accept less of the lifestyle features you wanted. 
You can change the nature of the business or start a new business to achieve the CIP you want and need. When ready, go back to Step 1. 

Exit planning is essential to assure that you end up with the maximum CIP. For an independent and unbiased review of your situation - please e-mail us for further information.