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Exit In A Box

Have you ever asked yourself, "what happens to the financial value I've had locked up in my business on the day that I depart my business, either voluntarily or otherwise?" It's at that time that every owner wants to receive the maximum amount of money in order to accomplish their personal, financial, income, and estate planning goals. As the owner and perhaps the founder as well, wouldn't you like, no don't you deserve a say in what happens to your hard earned equity no matter how, who, why or when the lever gets pulled? If your answer is yes, there are a multitude of exit routes and strategies to consider. If you're not acutely aware of all of your particular options, you should. If you want to, you can with Exit In A Box today!

Succession, Exit & Transition planning with Exit In A Box is your management tool for this. It is for every business owner and would have ideally been in place the day you opened your doors.

Succession Planning – Ensures the Business continues, Family, Co-Owners, Management
Exit Planning – Transfers value to Insider or 3rd Party Investor/Buyer
Transition Planning – Evolves the Owner from an Operator to Passive/Absentee-Owner
Business Value Drivers - to both Preserve & Enhance Owner value

All business owners want to successfully (whatever that means to them) transition from (again, whatever that means to them personally) their business, whether voluntarily (3-20 years out) or otherwise (0 years out), but generally don't know how to accomplish that goal. Start by harnessing a systematic approach to take control of your Exit planning process in order to maximize the value you as a business owner receive on the sale or transfer of your business. It's not all on you. Collaborating with your qualified trusted advisors when they work well together as a team is critical to the creation of your written Road Map. However, your first taking the time on your own to think through your "pie in the sky" scenario is a most effective way to begin this process.

Exit In A Box   

Many owners do not set exit objectives precisely because it is emotionally too retching to separate themselves from a business they have created, nurtured, lived with, suffered with, brought to maturity, and in which they have totally immersed themselves. It may be difficult, if not impossible, for any planning professional to engage you in the planning process until you are emotionally prepared to leave your business. Those who are emotionally ready to face leaving often do not know what to do or where to begin. Be receptive and open minded when introduced to a qualified professional. That first conversation will be at least eye opening and at best liberating.

There are three straightforward retirement goals that you must fix in your mind. Establishing these goals allows you to cut through a lot of muddled thinking that previously prevented you from moving forward. These objectives are:

1. How much longer do I want to work in the business before retiring or moving on?
2. What is the annual after-tax net income I want during retirement in today's dollars?
3. Who do I want to transfer the business to -- family, co-owner, key employees, or outside parties?

How many times have I been asked – "When should I start planning for my exit?" Answer, "Yesterday!" How many times have I been told "I'm not ready to exit!" "Well you should (always) be!" As you can see, the answer's nearly the same. In an involuntary (This is decidedly at least as important as our experience has taught us that owners' reasons for exit are 4:1 involuntary/encouraged to voluntary!) exit, question number one sadly is answered for you. The answers to numbers two and three may be entirely different than under a voluntary scenario so consider this as well. There are no right or wrong answers, they're simply your answers and they're important.

You can't effectively leave your business without setting each of these objectives in writing under both scenarios, yet only a handful have carefully formulated these objectives in advance so the actual transfer of the business can be planned.  Here's where Exit In A Box may assist you in becoming one of the handful.

These are your objectives, from which all planning efforts and results will flow. You are the person primarily responsible for this step, but you need not work alone. No one advisor has all the answers.

Once the amount of retirement income that needs to be received is calculated by your Exit In A Box Financial Needs Analysis (FNA), your Exit In A Box Financial Needs Analysis can create a financial retirement model for you based on the following factors:

1. Retirement income needs based on your current lifestyle expenditures.
2. Inflation assumptions.
3. Size of your current investments.
4. Investment growth assumptions on both your current and future investments.
5. Your number of years to retirement.
6. Life expectancy, yours and that of your spouse.

Summarily the next steps are:

In our third Exit In A Box step, we must work to ensure that we preserve as much business value as possible from the grasp of the IRS. We additionally work to promote the value of the business through value drivers. Value drivers, a whole other topic, are the various characteristics of a business that professional buy-out experts believe drive value upward and for which they are willing to pay top dollar. A Value Drivers Analysis here is an invaluable tool to enable you to crystallize where your hidden value lies and how to mine for it. Finally, we work to protect the business value from the grasp of creditors.

The direction of our fourth and fifth steps depends on our choice of Exit In A Box Paths. If we are selling to a third party we will follow a very specific systematic process. If we are transferring the business to an insider we must minimize your risk by reducing the time that you have to carry a note.

Up to this point, our Exit In A Box plan has focused on moving on past your business. We must spend some time planning for contingencies. We work to be certain that your family will benefit from your life's work should you be unable to continue working in your business. This is Step 6. Often times, you'll find this is your starting point.

Finally, when you have successfully transitioned from your business we want to make sure that you accomplish your short and long term personal, financial and estate plan goals.

In summary, a written Exit In A Box plan crystallized around your business owner objectives should:

• Preserve your existing assets–including your monthly paycheck from risk and taxes, protect your interests against, creditors, predators & thieves, and build value within your business using tools you already have.
• Transfer ownership and value as profitably as possible no matter who you plan to sell to.
• Integrate personal, financial and estate planning goals with the goals of your business to maximize profit, minimize tax liability and minimize timing.

Your Exit In A Box planning experience should be both enjoyable and rewarding for you. You might consider yourself fortunate to have the need to do such planning. As one client put it, "It beats running through a meth lab with your hair on fire by a long way!"