26 Feb Around the Web: A Week in Summary
A recent article from Forbes entitled “4 Things You Need To Do To Start Planning Your Exit Today” provides insight into the steps you should take when you are considering a business exit plan.
It is very common for a business owner to wait until they are ready to put their business on the market before doing any exit planning. It seems like planning the exit can wait while there are other tasks at hand to give your attention, but the opposite is true. A strategic successful exit requires careful and diligent planning.
There are 4 things you can do to start your exit planning:
- Build a successful business that is attractive to outside investors
- Ask yourself key questions that a potential buyer will ask such as “Is the business dependent on the goodwill of the ownership team?” and “Is your revenue stream diverse or dominated by a handful of clients?”
- Review and analyze income tax planning strategies
- Make a plan to maximize gifting strategies and your legacy
A recent article from Business Observer entitled “How to buy out a business partner” provides advice for approaching a buyout of one business partner by the other partner.
One key factor in this process is to stay level-headed. While this may be an emotional time, it is best to keep your emotions in check and look at the transaction with a level head.
It is best to create a buyout plan long before a partner decides it’s time to make their exit. Planning ahead can help this process be much smoother for all parties involved.
Another key factor is use the help of professionals for things like a third-party valuation of the business to help determine what the business is worth and an intermediary to guide the process.
A recent blog post from Allan Taylor & Co. entitled “Show Your Business Some Love: Get A Valuation” provides insight into the many benefits of getting a professional business valuation.
Getting a business valuation can allow you to see your business from a new perspective which may help you make improvements to the business and reduce or eliminate current struggles.
Potential benefits of a business valuation include:
- Identify ways to improve your margins, which in turn improves the value of your business.
- Put into focus how your business generates cash and what you can do to predictably generate more cash so that you can make short term improvements while also building value.
- Uncover inherent risk in your business such as too much dependency on the owner so that you can take steps to mitigate these risks.