By Maddern Accounting 15/11/2010
If you are a business owner, the time will inevitably come for you to start thinking about moving on and extracting value from your business. Whatever strategy you choose, professional advice will invariably help you achieve your goals and secure your future.
Many reasons lead to the decision to leave a business. Sometimes, it’s time to retire, or you’ve been made an offer you can’t refuse. Perhaps you want a change in direction or it’s time to pass the business on to family members. Or, maybe the business is underperforming and an exit is the most feasible option.
There are several courses of action in terms of your exit strategy, including:
- Selling the business
- Passing the business on
- Merging
- Closing down
- Liquidating
- Forced closure
In an ideal world, you would have established an exit strategy at day one – but that is rarely the case.
If you have decided to sell, then the first thing you need to consider is how much the business relies on your personal goodwill for value. If you are the main proposition, then you have no business to sell and need to consider employing people to build up the company’s value.
Succession, on the other hand brings with it very complex financial factors which can be further pressurised when you add the inevitable emotional element in family business transfer. Here, the structure of the succession – be it immediate or gradual – and whether you are dealing with second or third generations and, in some cases, in-laws, will all have significant bearings on the direction of the strategy.
Tax, debt and super considerations are some of the other major aspects to be considered.
All in all, exit strategies play a supremely important role in securing your ongoing financial security. With so many complexities and facets to consider, professional advice can help charter the muddy waters and leave you with long-term financial security.
