Business families of Houston, Harris, Texas often make plans for their businesses to expand and earn higher profits. They may have dreams such as going public, selling their businesses to the highest bidder, or preparing and training the next generation to take over the family business.
However, unfavorable or unforeseen conditions such as illnesses, business losses, debts, disabilities, or retirement or death may impact a business financially, causing the business owner to encounter difficulties running the business. To tackle the issue, one needs to have a business exit plan or strategy in mind. Sadly, many small business owners and family owned businesses do not have their business exit plan in place.
The current economy makes it even more important to have a business exit plan ready. The purpose behind a business exit plan is not restricted to only a plan to deal with unexpected circumstances. It also aims at having a plan in place for succession, selling the business, or transferring of ownership of business when you want to retire.
It may be a good idea to consider certain things while planning a business exit strategy:
- Develop a succession plan-For a family-owned business, you should first choose the successor and then groom and train the successor in the way that can help him or her handle the business effectively.
- Invest in a retirement plan and insure your worth-Investing in a retirement plan, life insurance and personal disability insurance can be a good idea. These plans are important for small business owners and can protect you and your family during troubling times.
Exiting a business may require a person to fulfill certain legal requirements. It may be wise to consider the services of an attorney and business evaluation expert while embarking on a business exit, as it can have implications on employees, its assets, and your tax obligations.
Source: SBA.gov, "Plan Your Exit," Accessed on Feb. 27, 2015