Exit, Stage Left (continued)

Assignments

1. Determine where you are. Look at your business lifecycle. Some exit strategies take time to plan and execute. Your options may be limited to the time left before exit. Think about your business and your journey and determine what options are available to you near term and long term.

2. Take a personal inventory. Examine your finances, your retirement plan and your energy and passion for running a business day in and day out. Does the work still jazz you? Do you look forward to coming to work every day? Are you still working out of necessity, or are you doing it out of habit? Can you retire securely, even if you walk away from your business? If you need to sell your business to make the math work, what is the tipping point in terms of a price?

3. Value your business. What is your business worth? You may need to do a comparative analysis with similar businesses or bring in a professional to give you a valuation. This is not something you can do yourself, primarily because you can’t be objective. As you look at the value, think about the intangibles such as goodwill, name recognition, reputation, intellectual property and customer reach.

4. Speak with an attorney or tax adviser. As you consider specific exit strategies, know that there are tax and legal implications. Speak with an expert to review your business and desired strategy and go over the options, including the pros and cons of each, as well as any tax or legal considerations you need to factor in.

Learn more about ESOPs. If a sale to employees is a viable option or if you haven’t considered it before, do some research online to learn more about ESOPs and the process required to execute a sale to employee-owners. You may even want to speak with an ESOP specialist to discuss your specific situation.