An exit plan is a critical roadmap that addresses all of the business, personal, financial, legal, tax and value creation issues involved in transitioning a privately owned business. An effective exit plan provides business owners with a clear strategy to help business owners exit their business, maximizing their personal and business objectives.
Your exit plan should be focused on three main objectives: 1) maximize company value, 2) ensure you are personally and financially prepared to exit your business, and 3) life post-exit.
To be effective, your exit plan must include the following:
- Business valuation and value enhancement
- Implications of the different exit alternatives such as thrid-party sale, management buyout, family succession or liquidation
- Business, personal and estate goals adn taxes