Most business owners spend a great deal of time building a business and very little time thinking about an exit strategy. Detailed planning is needed to ensure a smooth, seamless transition, and because there are multiple aspects that affect a transfer, having a solid business succession plan in place is key.
Failure to have a business plan in place or a poorly executed exit strategy can negatively impact the value of the business and could cause a fire sale. This process can hurt a spouse or children, create discord with business partners, create uncertainty for employees, and hurt vendors and the community in which the business is established.
There are four key elements of a successful plan:
Identifying the next generation of owners
Establish a strong management team
Know your business value
Having a comprehensive estate planning
So, when should business succession planning start?
In a perfect world, business owners should be thinking about getting out the day they get in. Unfortunately, many business owners don’t start thinking about an exit strategy until they want to get out. At a minimum, a business owner should start planning for an exit three to five years before the planned sale date.
Once a business owner understands the need for a transition plan, a strategic approach that integrates executive retention, succession funding, and estate planning tools is essential. Two ways to achieve these outcomes are with executive benefits and life insurance.
Executive Benefits
Life Insurance
Take the next step now…
Business owners spend a tremendous amount of time building a business and don’t often plan for transition. To ensure that they have sufficient funds for retirement and estate planning needs, they need to start now, not later. Most importantly, because of the complexities of succession planning and the need to have multiple advisors assisting with finance, tax, legal, and insurance issues, it is important to work with experienced professionals. An AssuredPartners professional can work with you and your advisors to provide the clarity and solutions needed to ensure your legacy lives on. Don’t wait until it’s too late, contact us today to get started implementing these plans for your exit strategy.
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