What to Expect When You Exit Your Business

At some point, most business owners decide to exit their business. The reasons for moving on and the strategies for doing so can vary greatly. But once the decision to exit has been made, several common challenges you’ll face that are the same in nearly every instance. Knowing what they are—and preparing yourself to deal with them can help make the exit less stressful and more successful.

If you plan to work with an experienced succession professional (and you should), they can assist you with the following challenges.

1. It's extremely distracting

Running a business is time consuming and requires a lot of attention. Customers, employees, vendors and officials all demand your time. Building a strong succession plan will require a good amount of your time. You’ll probably need a board of advisors as well and they’ll likely ask many of the same important questions. Building a comprehensive exit strategy is a good investment that will pay dividends but will distract you from important day-to-day tasks. Because the exit process can be complicated you can help yourself by planning ahead so you’re prepared when the time comes to transition your business.

2. It's a process

There is a lot to consider when crafting an exit strategy. Some items you may have thought through but, if you’re like most business owners, there are many unforeseen variables that still need to be addressed. That takes time.

The entire process often takes twelve to eighteen months. Prepare yourself. Set yourself up with long term success with a long-term plan. Realize that is required for a well thought out exit plan to be put in place and to ensure you and your business are set for long term success.

3. It's an emotional roller coaster

Forming a succession plan isn’t a straightforward process, it’s filled with emotional highs and lows. An owner may be excited to find out what their company is really worth and that their strategy is working and then taken aback when they realize the impact taxes will have. These ups and downs are common but can be a surprise for owners. If you know what lies ahead and realize what you’ll need to work through it, you can prepare yourself and the process becomes much more attainable.

4. It's expensive

Crafting a solid transition plan is a complex undertaking that requires specialized knowledge. Your company’s accountant or lawyer most likely hasn’t navigated this type of process. You need a banker, a certified public accountant, an attorney and a wealth planner that have experience in this area. While the initial investment can seem like a lot it can have a big impact on the amount you receive for your company.

5. It's hard to keep it quiet

An exit strategy needs to be guarded. If employees, customers, and competitors find out ahead of time it can affect the company’s worth. A seasoned succession professional will guide you on what to say, and how to deal with customers, employees and even family. There’s a correct way and time to let everyone know—including senior management. Be sure you have a plan in place and ensure your company is well positioned when the big announcement is made.

The business exit process can be long and filled with frustration, that’s why it important to work with someone who’s experienced and done it multiple times before. Someone you trust who can help you find the real value of your business and get the most for it, so that you can move on to the next stage of your life.

At Yellow Cardinal Business Succession Services, we give confidentiality the utmost importance. Our succession professionals are discreet when meeting with clients. We’re deliberate about when, how and where we meet to protect clients and the value of their business.