As a business owner there are seven key questions you must consider before you sell or transition your business. The overall goal of these questions is to uncover what is important to you in your long-term succession or exit plan. Engaging experienced counsel to work with your exit planning professionals can ensure that you have the opportunity to address these seven paramount questions.
These questions are:
1. Who are the people that matter most to you?
Every business owner has people in their lives that matter to them. Whether it is family, friends, or employees, a business owner as they begin planning to sell or transition their business should take care to consider the impact and how to provide for the people that matter most.
2. What activities do you want to do?
As you begin to plan to sell or transition your business and formalize your exit strategy it is important to look at what you want your life to look like in the future. Without the long hours of running your business what activities do you want to fill your day? And how do these activities impact your exit strategy’s financial planning? Depending on the financial resources your post-sale lifestyle may need you may have a new benchmark for how much you need to sell your business for or how aggressively you need to.
3.What do you want your legacy to be?
As a business owner your leadership and decisions have created an identity for the business. Upon your exit you will want to consider what is the lasting legacy you will leave. Whether your legacy is continued on with your children taking control of the enterprise, you choose to transition your business to the key employees, or you sell to an unrelated 3rd party, how you leave your business can seal your legacy just as much as the years you spent building the business.
4. What are your main concerns?
As you plan your exit strategy it is important to work with legal counsel to identify and create a series of steps to take to address those concerns and mitigate risk and liability upon your exit from the business.
5. What is the one thing that keeps you up at night?
Again, knowing what keeps you up at night will help guide you to your major concerns and what elements of your life are most important to you. Once you have an in-depth understanding of the items that are most important to you, you can work with your legal counsel and exit planning professionals to ensure that your exit strategy adequately addresses these areas.
6. How do you plan to achieve your life’s vision?
Business owners often do not have an answer. The mere fact that you may first respond to this question with “Hmm, that is a good question, I don’t know” only highlights the need for you to engage exit planning professionals, including legal counsel. A business owner’s largest asset is likely their business and thus knowing how to maximize its value upon your exit will be key to ensuring that you can achieve your life’s vision.
7. What is my wealth gap?
The Wealth Gap is all about expectations versus reality. At its core, the wealth gap is the gap between your current net worth and the hypothetical net worth you will need to provide for yourself, your family, and your charitable intentions. The only way to reduce your wealth gap is to maximize the value of your business with a well-planned exit strategy.
The legal team here at Jacko Law Group, PC (“JLG”) is experienced in advising business owners through the sale and transition of their businesses. Further, JLG with their Certified Exit Planning Advisor, is able to provide support and coordination among all your professionals to ensure that you have a complete Exit Plan that seeks to maximize the value of your business upon its sale or transition and provide for the financial needs of you and your family.