financial checklist for exiting your business (5 tips to ensure paying yourself more)

Creating Successful Succession Plans

You’ve built your business over the years. What once was a vision has morphed into a successful and viable company. You started small and eventually grew this entity so that you can stand back and say “I created this.” The amount of sweat and tears that went into its creation is something that probably only you and your family can relate to. The sacrifices. The missed dinners. The weekends worked. The sacrificed holidays. You can’t put that as a line item on your income statement or balance sheet. Was it all worth it in the end? Maybe but probably not. You made the decision to put it all on the line and walk away from the security of a fulltime paycheck and benefits. You did it never thinking it would be easy but hopefully over time would give you more freedom and flexibility. The wealth would hopefully follow.

You realize that you can’t continue to run this forever and at some point need to think of a successor or at least someone to lighten your load over time. Is there someone within your organization that you can hand over the reins at some point down the road? Is there a family member with a desire to work within the family business? Will a third party come out of left field offer you a huge sum of money and buy your business? If there is isn’t a profound and outright “yes” to any of the above options, my suggestion to business owners is to treat things as if you will be winding the business down. This prepares you for the worst-case scenario. Many business owners are optimists by nature. Many believe that “things will fall into place” when it comes to exiting their business and think about it too late in the equation.

Plan for the worst and plan for it early in the process!