The Complexity of Exiting a Business
- August 23, 2016
- Posted by: admin
- Category: Exit Planning
Almost as much as owning a business, exiting a business comes with a great number of entanglements. Whether your selling your business, passing it along to a family member, or closing down for good, exiting a business successfully is contingent on having the right plan in place.
Exit planning can involve numerous factors. Issues such as the transferring of assets and tax obligations warrants a professional touch. Read on to learn some of the elements involved when you’re ready to leave your business and why exit planning, the right way, requires advice from a financial expert.
One of the most common reasons a person chooses to exit a business is that they’ve reached retirement age. In these cases, most business owners choose to pass on their business to a family member. This means the business sale intersects with estate planning. For example, if you pass away prior to exiting your business, who in your family gets control of your business assets?
Will your business assets go to an individual, like your spouse, or will they be spread over multiple people? Questions like these are never fun to think about. But how much harder will they be for your loved ones to handle if you are gone? It is much better for everyone to deal with succession issues when things are going well, not when tragic circumstance dictates. The guidance of a financial expert can help you develop a plan of succession that will prevent the added burden that uncertainty causes during a traumatic time.
Selling Your Business
If your exit plan involves selling your business, there are a great deal of complications involved in the process. The first step in selling your business will generally be a business evaluation. This will be used to examine your business’s financial health and how enticing it might be to consumers.
Next, a plan to clean up loose ends and getting the business in a saleable condition may be needed. This often involves creating policies and procedures, that may need to be written to get the business ready for sale. Contacts with vendors and agreements that have been handshakes in the past should also be included.
After that comes the rigorous process of marketing your business to buyers and negotiating the terms of sale. This is an important part of the sale, and it should be performed with expert guidance. Selling your business is a great exit plan, as long as a financial advisor handles navigating the purchase of the business.
Whether you’re selling or transferring ownership of your business, a significant legal aspect involves taxes. Exiting a business can have a tremendous impact on your tax obligations, affecting such areas as income tax, estate tax and retirement planning – possibly serving as a stumbling block for your plan to exit your business.
When you’re developing your exit strategy, you should make sure to talk with your financial advisor on how best to alleviate the tax burden of everyone involved. This will ease the change in ownership and make the transaction financially beneficial for all parties.
Exiting a Business is Easier with Professional Help
If you’re planning on exiting your business in Las Vegas, there are a lot of factors involved in making the transition as smooth as possible. Estate planning, business valuation and handling your tax obligations can be extremely difficult for those unfamiliar with the proper courses of action.
With experience in areas like commercial property leasing, business acquisitions, sales and valuations, Jamie Schwartz can help you navigate the often complex process of exit planning. Contact her today to begin developing your plan in Nevada.