07 Feb Yesterday was the best time to start planning
The best time to plan your exit is the day you start your business. If you skipped that step, like most of us, then make it part of your current planning process, and then spend some time each year to update the plan, even if your exit is many years in the future.
As you develop your plan, we recommend that you get advice from professionals with expertise in tax planning, legal matters, investments and personal finance, business valuation, and M&A. You’ll also want to include business partners and possibly family members and key employees in your planning. It’s difficult for many entrepreneurs to take steps to separate from their business. But if you want to leave a legacy or build a business that has significant value, it’s essential to figure out how to work yourself out of your own business.
If you need extra motivation to get started, consider that there are millions of privately held businesses that belong to baby boomers. But that generation is moving into retirement age, which may cause an historic surge in businesses going to market in the next few years. The average number of businesses sold has been about 8,000 per year, but some analysts think that number could swell to as many 300,000 per year(!). How will your business stand out in such a competitive market? Will there be enough buyers for all those businesses, or will the competition lead to price-cutting by owners that are aging and motivated to sell?