Why a Business Owner’s Exit Plan Is So Important
What happens when we’re sick of a job we’ve created for ourselves in a business we’ve founded?
The idea is to make a plan that allows you to get out before you tire of your company or before you are overwhelmed by personal, industrial or economic factors that force you to sell, transfer or close a company. This is called an exit plan.
Everyone glamorizes creating a business as a way to completely control one’s own destiny. So it is ironic how many businesses go on day-to-day without any thought to a proper ending.
An exit plan isn’t born in a day. In fact, many financial experts in investment, tax and estate planning disciplines think it’s wise for business owners to come up with an exit plan when they start a company if possible, and if not, within 3-5 years of the date they’d like to exit.
An exit plan allows you to not only to change your own employment, but to help you change your whole career if you choose. No one has to stay in the same industry – or company – for life, and with an exit plan, you can leave open the possibility for an endpoint that will allow you to travel, do philanthropy or any number of new activities in business or other walks of life.
The financial planning aspect of the exit plan will align your monetary needs with your career or post-career needs. The bottom line is that it’s never really too early to start thinking of an exit plan for a business you’ve formed. Today, smart entrepreneurs start asking themselves those questions as they’re organizing and forming companies.