Every business owner will leave his or her business at some point. Experts predict that of the over 22,000,000 privately-owned businesses in the U.S. today, 40% of owners will exit within five years, and the trend will continue as more and more Baby Boomers reach retirement age. Many business owners have no formal exit plan in place, leaving the potential for confusion and disorganization on the part of both employees and family members. The most distressing consequence of this lack of planning may be total dissolution of the business. SilverStone Group and Business Enterprise Institute, Inc. have joined forces to create a 7-stage process that helps clients plan for the successful transfer of business ownership. Planning an exit strategy is the most important step you can take — for you, your family and your business.
Stage 1: Goal Setting – Is there a plan in place enumerating your exact retirement goals? What will it take — in cash — to reach them?
Stage2: Valuation – Do you know how much cash your business is worth today?
Stage 3: Value Maximization – Have you determined the best way to maximize the income stream generated by your ownership interest?
Stage 4: Sale to Third Party – Could you sell your business to a third party and pay the minimum taxes?
Stage 5: Sale to an Insider – Would you be able to transfer your business to family members, co-owners or employees while playing minimum taxes and enjoying maximum financial security?
Stage 6: Contingency Planning – Do you have a continuity plan for your business if the unexpected happens to you?
Stage 7: Financial Independence – Do you have a plan to secure financial independence for your family after the sale?