The #1 Question to Ask Before Exiting Your Business
What is the first question you should ask prior to exiting your business?
I recently had lunch with a long-term client who has done a terrific job of growing his business along with his partners.
We have had a running conversation over the years about what the next steps may look like, reviewing several options that have popped up for his business.
There are many ways to exit a business…
Sell to an outside party
Sell to an inside party
Go public
Form an ESOP
Stay and grow
Turn off the light and lock the door
And other not-so-pleasant ways…
Whatever method or financing method you use, there is one question you need to ask yourself first.
“Will the Result Allow Me to Achieve My Financial Goals?”
Don’t get me wrong. There are many questions to ask before exiting a business, but this is the #1 one.
Let’s laser-focus on your financial goals.
Do you even know what they are? Will exiting your business allow you to achieve them? What’s the best path to getting there?
Often, the value of your business is the largest and most productive asset in your portfolio. For instance, a manufacturing concern that generates 30% gross profit will always beat a return from a money market or the stock market, with scarce exceptions.
Need some help nailing down your financial goals?
I advise all my clients to use a wealth advisor. They have the technology and tools to best advise and calculate the cash-flow requirements for your life goals — including any potential proceeds from a business exit.
If you don’t have a wealth advisor, let me know. I’ll help get you hooked up with the right one.
Once You Know Your Financial Goal…
That goal “number” will allow you to gauge the next steps:
If there is a negative gap, then you can further invest in your business or reinvest into another business venture to close the gap. You can still exit your business, but you’ll either have to continue working, start another business, or trim up your life goals.
If there is a positive gap, then you have options! You can be choosy in your decisions to exit and/or enhance your life goals.
Blueprint Business Advisory can help with each of these steps. I provide the guidance and tools to both grow and exit your business.
Let’s work on your blueprint and execute!