Do not neglect to plan your exit, small business owner

Last week I had an opportunity to interview John Leonetti, CEO of Pinnacle Equity Solutions, a national firm that provides exit strategies training and solutions. John is author of Exiting Your Business; Protecting Your Wealth, which is for business owners who want to transfer and/or protect their illiquid business wealth. As John says, “Whether you intend to sell your business to an outside party or if you want to transfer ownership to managers, employees, family, or charities, an exit strategy plan is needed.”

If you have a small business that you intend to sell at some point down the road, starting to devise an exit strategy well in advance of that sale is important. For example, some tax strategies need to be put in place far in advance of a business sale. As John told me, “”Taxes are a big part of these transactions and owners are often quite surprised by the amount they have to pay in taxes. It’s not what you get; it’s what you keep that matters,” he stressed.

John also pointed out that selling a business you’ve put your life’s blood into is an emotional and personal transaction as well as a monetary one. By thinking through in advance all the issues that need to be considered when a business is sold, you can be better prepared to take some of the emotionalism out of the situation. This will help you keep your cool during negotiations.

“Business owners identify with their companies; it is often their alter ago,” John said, “and many owners have had seller’s remorse because they did not think through what would happen after the transaction.”

These issues, of course, are different if you plan to be a serial entrepreneur. If you know you’re going to be starting another business soon, you’re less likely to dwell on what might have been if you’d planned better in advance of selling your company.

But if you plan to retire after the transaction, things may get very tense if you haven’t figured out in advance what you need financially from the deal in order to fund the kind of retirement you need or if you haven’t done some planning around what your life will be like post-sale when your identity as a business owner is no longer there.

Don’t be one of the many small business owners who doesn’t bother to carefully plan for an exit. Seller’s remorse is a terrible thing that can eat away at you for a long, long time, making what should be a happy event – the successful sale of your business – into an unhappy memory.

John’s book is available at Amazon.com in both hardback and Kindle versions.

2 comments

  1. Paul Cronin says:

    John is right on the money -literally. His Pinnacle group is doing really good work for owners and their advisors.

  2. Ian Smith says:

    It's all about realizing your business is your vehicle. You get to decide it's purpose.
    John's book is packed full of great questions you need to ask yourself.

Leave a Reply

brand building Branding business plan corporate culture customer loyalty Facebook hiring Innovation Media relations mentor mentoring networking publicity reputation management search engine optimization SEO Twitter Web design website design websites

Subscribe to keep up with the latest on how to make your small business a success.