11

Jun

2014

Important Considerations in Exit Planning

Easing the Emotional, Financial, and Psychological Impact of Selling Your Business

Author: Lewis Martin
Ease the emotional, financial, and psychological impact of selling your business through preparation and proper planning. Besides start-up and early development, selling a closely held or family business is one of the most difficult tasks facing business owners. You have probably spent the better part of your adult life tending to the care, growth, and well-being of your enterprise. This can have a similar affect as nurturing a child ... the business has become the owner's baby. So it is not surprising that many owners steer clear of thoughts about parting ways with the company until the last minute. Many times this is prompted by some external factor or event, such as divorce, disability, or partner dispute. In addition, when it comes to thinking about one's business it is extremely difficult to maintain objectivity. The business owner has devoted five, ten, twenty or more years in building a business that has provided the means for the owner and family to enjoy a great lifestyle and to live comfortably. At the same time, much of the owner's wealth remains highly illiquid  - tied up in the equity of the business. So how does the business owner unlock this wealth and convert it into liquid assets that carry into the next stage of life? Generally, the most feasible liquidity event takes the form of a business transfer transaction - either to family members, company management, or third party buyer. While the process can be very emotional and time consuming, there are a number of important issues to consider in preparation for this undertaking. 
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Important Considerations in Exit Planning

Ease the emotional, financial, and psychological impact of selling your business through preparation and proper planning. Besides start-up and early development, selling a closely held or family business is one of the most difficult tasks facing business owners. You have probably spent the better part of your adult life tending to the care, growth, and well-being of your enterprise. This can have a similar affect as nurturing a child ... the business has become the owner's baby. So it is not surprising that many owners steer clear of thoughts about parting ways with the company until the last minute. Many times this is prompted by some external factor or event, such as divorce, disability, or partner dispute. In addition, when it comes to thinking about one's business it is extremely difficult to maintain objectivity. The business owner has devoted five, ten, twenty or more years in building a business that has provided the means for the owner and family to enjoy a great lifestyle and to live comfortably. At the same time, much of the owner's wealth remains highly illiquid  - tied up in the equity of the business. So how does the business owner unlock this wealth and convert it into liquid assets that carry into the next stage of life? Generally, the most feasible liquidity event takes the form of a business transfer transaction - either to family members, company management, or third party buyer. While the process can be very emotional and time consuming, there are a number of important issues to consider in preparation for this undertaking. 
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