Exit Planning
Having an Exit Plan lets business owners prepare for change in a way that works best for them, their family, and their business. Our process shows all the different ways a business owner can leave their business. The options range from selling to another company, selling to the people who work for you, all the way to closing the business in a dignified way.
Why should you create an Exit Plan now?
How and when to exit the business is one of the most important decisions of a business owner’s life. We’ve seen owners make this decision based on an unexpected purchase offer or sudden life event, and without a plan, the results are chaotic and the sale price is low. Business exits need to prepare for numerous legal and financial issues that should not be rushed. Reasons why we encourage all business owners to have an exit plan include:
Your business may be the most valuable asset you and your family have.
Other people also rely on the long-term survival of the business, including your employees, customers, and vendors.
An exit without prior legal and tax planning can subject business owners to legal or financial risk.
Unprepared sellers receive a lower price and pay more in taxes.
An exit plan can show how you can pass your business to family members while avoiding familial conflict.
Exit plans put you in control of the terms and timing of your exit. They create reduce, postpone, or in some cases entirely avoid significant taxes, allow you to plan for and fulfill your philanthropic goals.
Most importantly, an exit plan gives you peace of mind because you are prepared for the future.
Our Approach
We explain each option for your business and show you how it might be worth, including taxes. As part of this process, we work together with you and your other trusted advisors (lawyers, CPAs, financial planners, etc) to create a clear and actionable roadmap. Key parts of our process are:
- Understanding your goals: timing, financial goals, important employees, family considerations and more.
- Detect who your next leader is: identify if you already have key leaders who can run the business under different exist scenarios.
- Perform an in-depth valuation analysis: identify problems what will decrease value and what makes your company special, analyze the market for your business, and value the company under different exit plans.
- Tax Planning. Coordinate with your other trusted advisors to model what you would receive after-tax implications of each plan, and what changes you can make today that will increase post-tax value.
Throughout this process, we help you understand all the different options that are available, including:
Why Choose ClearPath?
Exit Planning is core to what we do. No matter what problem we’ve been asked to solve for our client, we always approach it with our business objective in mind: help business owners build a healthy, sellable business whether they plan to sell or not.