7 Practical Questions to Ask Before You Exit Your Business

Exit Questions

The decision to exit your business is one of the most important and emotionally charged decisions you’ll ever make. Indeed, it’s a life-altering decision—both for your life and the lives of the people who work for you. It means stepping away from the company you’ve built, thought about, and toiled over for years. And it can change not just your day-to-day routine, but your entire conception of self.

Most importantly, exiting your business can leave you rich. I’m talking rich-rich. The filthy, stinking kind.

But in order to walk away with the wealth you deserve, you’ll have to strategize carefully and deliberately. Exit planning isn’t something you can put off and hope to figure out when the time comes. To maximize your exit, you need to anticipate and solve potential problems in advance.

Whether you intend to leave your company in a few months, years, or decades, here are a few practical exit planning questions to consider right now:


1. When will you exit?

Successful exits are all about timing. If you walk away before your business has matured, you could lose out on value you might have otherwise generated had you stuck around longer. On the other hand, if you stay too long, you might miss an opportunity to sell the company when it’s in its prime. Keep in mind that buyers in mergers and acquisitions (M&A) transactions typically want to purchase companies that haven’t yet exhausted their growth potential.


2. What’s your exit strategy?

How will cash in on the value of your business? You could sell the company, take it public, transfer ownership, liquidate it, or pursue an alternative strategy. Know your options. Then consider what’s feasible for you and your business, as well as the pros and cons of each approach. Be aware that many of the costs and downsides of various exit strategies aren’t immediately obvious. If you intend to sell your business, for instance, you’ll need to prepare for months (if not a year or more) of due diligence, negotiations, and paperwork—all while continuing to run the company.


3. What’s your transition plan?

What will happen to your business during and after your exit? How will you communicate the change to your employees, vendors, and customers? If you intend for the business to keep going, what will your successor need to know? What level of involvement will you have in the transition? These are just a few of the questions to think about before you begin the exit process.

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4. Is your business structured for the transition?

Your company may be well-structured in terms of saving on taxes and bringing in new investors, but that doesn’t necessarily mean it’s ready for a transfer of ownership. Whether your organization is an S Corporation, a C Corporation, an LLC, or a partnership, you may need to restructure before you exit to make the transition more efficient, or the company more appealing to a buyer.


5. Who will be on your advisory team?

Don’t make the mistake of trying to exit your business completely on your own. Trusted advisors such as your lawyer and your accounting partner will help you avoid significant legal and financial liability. Meanwhile, other professionals such as investment bankers and M&A consultants can work with you to maximize the value of your business and get key details organized. If you’re thinking about exiting your business, start reaching out and discussing your plans with these parties now. The further ahead you plan, the more effective and cohesive your team will be during your exit.


6. Are your company’s key value drivers locked down?

What’s your company’s secret sauce—and will it still be part of the organizational recipe when it comes time for you to exit? Will your best employees still be there? How about your competitive advantage in the market—your contracts, your intellectual property, your brand, or whatever it is that drives the value of your business? Now is the time to protect and cultivate your greatest assets and eliminate any risks or inefficiencies.


7. What will you do post-exit?

This is perhaps the most important question of all. Why are you exiting? What will your life look like after you walk away from your business? What do you intend to do next—retire, become an investor, launch another company? Or is your purpose to leave your family with wealth? Your goals dictate when and how you exit, as well as how much money you need to fund the next stage of your life or your family’s future. As we wrote above, exiting your business changes you—and the choices you make now determine the person you’ll become.

Exiting your business is a monumental decision, but you don’t have to make it alone. The financial experts at indinero will help you figure out your exit strategy, align your business and personal goals, and clear a direct path from where you are now to where you want to be in the future. Schedule a call with us.


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Quick Note: This article is provided for informational purposes only, and is not legal, financial, accounting, or tax advice. You should consult appropriate professionals for advice on your specific situation. indinero assumes no liability for actions taken in reliance upon the information contained herein.

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