If you’re a business owner it’s important to plan how you intend to exit your business.
Have you thought about the best way to leave your company?
One common way to exit a business is to transfer ownership to a family member. Only about 30% of business owners intend to exit their business using this strategy.
The most common exit strategy is a third party sale. While this may seem like the most obvious option, there are other ways to sell the business. For example, you could sell the business to key employees, sell your ownership share to other co-owners, provide employees with stock options (ESOP), or engage in an initial public offering (IPO). Other exit strategies include liquidating the business or retaining ownership but becoming a passive owner.
All of these options have their advantages and disadvantages, which is why you should consult with a financial advisor to determine which strategy best fits you and your business.
If you’re in a situation where you are a co-owner, it’s important to discuss with your partners what each of your exit goals are. How do you agree on an exit strategy that satisfies everyone?
A qualified financial advisor will be able to help you and your co-owners determine each exit path and what exit path works best for each of you.