Exiting your business is one of the most monumental moments of your entrepreneurial career: it requires a thorough assessment of every aspect of your business to ensure your exit is as smooth as possible with your finances, estate, legacy, and mission accounted for.
For example, it would be tragic to run a business for several years but then lose a significant amount of money or even experience losing all of your money because an estate plan wasn’t in place to protect your assets.
In this article, I’ll share some common exit planning mistakes so entrepreneurs can avoid these tricky or unfortunate circumstances and take critical approaches to exit planning.
1. Waiting Too Long Before Creating an Exit Plan
We may overlook planning our exit now because we think life after our careers is thinking too far into the future. No matter how long or short time may be or seem, it’s always an advantage to start planning as soon as possible for additional security.
You need a plan if the unexpected happens that otherwise forces your early exit or to use a less-than-ideal exit strategy with limited time or resources. Certified business coaches assist you step-by-step in crafting an exit plan on your schedule so you aren’t overwhelmed with several other responsibilities.
2. Not Incorporating Estate and Legacy Planning
Many people think a will is enough to provide security for their families. However, it alone doesn’t guarantee the correct distribution of your assets, meaning your family and other beneficiaries will have to appear in probate court. The probate process is complex, public, and costly.
Additionally, your estate should have a legacy plan incorporated – without one, your chosen beneficiaries may mismanage or even quickly drain their wealth and other assets. Legacy planning will honor your wishes and stipulations in the distribution of your estate.
Finally, not incorporating generational planning into your estate and legacy risks your wealth not lasting for more than one or two generations. Generational planning ensures each generation adds to the estate by authorizing wealth to create education funds, handing down your business with funding for growth, investing in life insurance policies to create a structure to generate wealth for future generations, and more.
3. Not Learning About Business Valuation
Knowing your business value is critical in determining your ultimate selling potential and gives you a data-driven approach to improvement goals. Value-building puts you at an overall competitive edge because you’ll work on increasing your profitability by improving your revenue, marketing, and business operations – earning the interest of major buyers and investors for better deals.
4. Not Knowing What Happens Next
Many business owners lose balance in other areas of their life in the next season. Apply the good habits you’ve developed in business to find drive and passion in other areas of life to regain a sense of purpose.
Entrepreneurs seeking comprehensive exit planning can book a consultation with me today.
