Exiting your business is one of the most monumental events 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 business intact and your finances, estate, legacy, and mission accounted for.
Your exit will leave a lasting impact on your future and the future of your business – you will want to make sure you avoid making mistakes that may:
- Lessen your proceeds from selling the business.
- Cause you to lose key employees and customers.
- Jeopardize relationships with partners and vendors.
- Increase the cost of exiting your business.
In this article, I’ll share some critical exit planning mistakes so entrepreneurs can avoid experiencing these results.
1. Avoid Waiting Too Long to Create an Exit Plan
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. Don’t Just Rely On a Will
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.
3. Don’t Assume How Much Your Business Is Worth
Knowing your business value is critical in determining your ultimate selling potential and helps you take a data-driven approach to improve it. I use a financial assessment for my clients to learn their business worth using three valuation methods.
4. Avoid Neglecting Staff Leadership and Development
Top buyers want a business that is capable on its own. Invest in training your team leaders and key employees for advancement into leadership and management roles for a more self-sustaining business.
5. Don’t Forget to Manage Your Debt
Manage your debts before you sell your business to receive the most proceeds when selling to a buyer.
6. Don’t Avoid Communication About Your Exit
Your exit significantly influences your business and your partners, customers, vendors, and staff’s relationship with it. Maintain communication about the process with your most significant relationships to avoid losing valuable connections.
7. Don’t Avoid Thinking About the Next Season
Life after years of running a business may perplex you if you haven’t thought about what other endeavors you’re interested in pursuing. You’ll feel more confident and fulfilled in the next season by thinking of new life pursuits now.
Entrepreneurs seeking comprehensive exit planning can book a consultation with me today.
