EXIT PLANNING - VITAL TO MAXIMISE PRICE AND TAX

Exit planning is the process of ensuring that when you come to sell your business you maximise your profit, minimise your tax and transfer it with optimum performance.

Most business owners are so busy running their business that they don't have the time to plan for the future. As many studies have shown businesses that have a plan are 95% more likely to succeed. The same is true for planning how you will exit your business.

With 60-70% of business owners looking to sell later in life rather than pass it own to family there is a massive need to plan to ensure that you can obtain what you deserve for the years of effort. Even if you are thinking about passing the business to a relative you need to do exit planning to minimise the tax you and the family will pay. Exit planning is therefore vital for all business owners.

Every privately owned company will at some point have a change of ownership this could be a result of sale, liquidation, transferring to a relative or merger with another company. All of these changes of ownership have an impact with different tax, lifestyle and family consequences. It is therefore vital that you plan to ensure you obtain the maximum financial benefit.

When should you start?

You should start at early as possible. You need to have at least 2 years where you implement a plan to sell to ensure you get the best price and limit the tax.

What are the common problems?

• Owners think that it is easy to sell the company
• Not knowing the true value of their company – over and under estimating
• Owners have not taken their personal circumstances into account – goals, tax, lifestyle etc
• Not setting the business up so that it looks attractive and so the buyer can see how they will make a good living
• Not having a plan that enables them to sell

What are the key steps to exit planning?

• Talk to a professional to help you plan
• Develop a plan at least 2 years prior to sale
• Recognise that if you don't use a process to plan your exit you will be fire fighting and it will cost you thousands
• Contact us to help you plan your exit.