Most business plans focus on issues related to growth, product development, and marketing. However, anytime you form companies, you need sound business succession plans, exit strategies, or acquisition plans. You may not be thinking about retiring or selling your business right now, but you will need a sound exit strategy at some future date.
Thienel Law can help you develop long-term exit strategies that include contingencies if you become incapacitated, you receive a lucrative offer, or in the event of your sudden death. You need to protect the value of your business and the hard work you have put into your business by making sure you have exit strategies that cover all potential events.
Types of Business Transfers That Need Comprehensive Exit Strategies
When you leave your business, there are three options available to you for exiting from the company:
- Business Succession Plans allow you to choose and train someone to take over the business when you leave. This person may be a family member, friend, or trusted employee. Developing a succession plan allows you to give your successor the information, training, and tools he needs to continue to be successful in business.
- Selling your business allows you the potential to make a significant profit as you exit the business. A private buyer or other business could be interested in your company. Discussing options for selling your business now can give you an idea of what you might want to do in the future.
- Closing your business is the third option for an exit strategy. For some owners, closing the company is the most realistic and sensible exit strategy. If you do not have a successor or you cannot sell the business as an ongoing venture, closing the business and liquidating the assets might be the best option for you when you are ready to retire.
It can be difficult to think about a day when you will not own your business. However, exploring your options now gives you more time to choose the option that is right for you.
When Do You Need an Exit Strategy?
The transition of a business is an event that can cause significant problems if handled improperly. Our firm assists business owners develop an exit strategy to avoid costly disruptions to the business caused by the transfer of a company or the exit of a critical employee or owner of the business. Examples of the types of situations that require a detailed exit strategy include:
- Sales to outside third parties
- Partner to partner transfers
- Family succession
- Transition to employee ownership through an Employee Stock Ownership Plan (ESOP)
- Retirement or exit of a vital employee, such as a CEO, CFO, or managing member
- Closing a family business or sole proprietorship
- Transfers of ownership among existing owners
Experienced business attorney Steve Thienel assists business owners in Maryland, Virginia, and Washington DC formulate exit strategies that avoid problems, but also accomplish goals for a successful transition and succession. Thienel Law will help you devise an exit strategy that is seamless, maintains the existing business, and preserves the value of the company.
Why Are Exit Strategies and Exit Plans Important?
Exit strategies are essential for several reasons. It is not a matter of will you leave your business, but it is a matter of when you will leave your company. Failing to develop an exit plan may limit your options and the options of your successors. A successful business person understands that the sooner you begin to prepare for an event, the more options and flexibility you have over the choices you make. Waiting until you need an exit plan can result in unnecessary pressures and strains that could impact the decision-making process negatively or adversely.
On the other hand, the sooner you begin to develop an exit strategy, the more freedom you will have over the choices you make. By carefully planning when and how you will exit your business, you can minimize any negative consequences that you might experience when you leave your business. The goal of an exit plan is to prepare for the inevitable departure from your business, but on your terms and under the conditions that you choose for yourself.
Advantages of developing a long-term exit plan include:
- Create a system that allows for an efficient transition to the new owners and management team;
- Preserve the current value of your business;
- Create a strategic plan for increasing the value of and growing your business in the future;
- Decreasing the potential tax liability for your heirs and your estate;
- Taking steps to provide sufficient income for your retirement or in the event you are disabled or injured;
- Developing a plan in the event you lose a key employee so that you do not have a major interruption of business or productivity; and,
- Having the peace of mind and security that you will be able to exit your business confidently and profitably.
Developing an exit plan also allows you to focus on the goals of your business, your current and future needs, and the available options for accomplishing your goals and meeting your needs. Failing to develop a strategic exit plan can result in a complicated, disorganized, and frustrating exit instead of a streamlined, successful exit from your business.
Experience You Can Trust
Business succession planning attorney, Steve Thienel is committed to helping you develop a plan that meets your goals and ensures an efficient transfer of your business. Developing a comprehensive business succession plan or exit strategy takes work and dedication. You do not need to do it alone.
Planning for your exit does not mean you are ready to leave now, but it does mean that you are serious about protecting your future, your family’s future, and our business. Serving clients in Maryland, Virginia, and Washington DC, Thienel Law can help you understand the various options for exit strategies and business successions to create a plan that is best for your business needs and personal goals. Schedule a consult today to ensure your exit strategy is sound.