There may come a time for a business owner to exit a business that he or she has carefully built throughout the years. There a number of different methods in Louisiana for exiting a business. Methods of exiting a business can include going public, selling the business or transferring ownership of the business to a family member. Many business owners become so focused on growing their businesses, which is important, that they fail to develop exit strategies for their business.
Just as it is important to develop a business plan when starting a business, it is important to develop a succession plan for exiting a business. It is good to have a practical plan for exiting the business, which can be included in a thorough succession plan. A thorough succession plan can include training as part of plan to transfer the business to a family member in the future.
It is also helpful to take into account some of life’s expected and unexpected events that can impact the running of a business. Events to plan for can include a retirement plan and perhaps life insurance or disability insurance. Selection of the most appropriate retirement plan for a business can depend on the number of employees the business has, and it is important to take into account different options that may also provide different tax deduction benefits. Planning an exit is important and can implicate business structure, tax obligations and additional concerns.
A number of professionals can provide valuable guidance for a plan to exit a business such as, for instance, business valuation experts, attorneys and others. There is a lot to know when starting a business, growing a business and exiting a business. Therefore, it is important to keep in mind that proper guidance can help business owners successfully navigate each step.
Source: Small Business Administration, “Plan Your Exit,” Accessed April 2, 2016