Exit options listed here can make you gain rather than lose when you resign from work. As the Paul Simon song goes, there are 50 ways to leave a lover. But how about leaving one’s business? Are you a business owner thinking of your options of your own company? Here are some tips:
Top 9 Recommended Options
Exit Options #1. Give it to any member of your family. If you do not want to give it, you can sell it.
Exit Options #2. If not a family member, you can sell it to an interested employee or a group of employees.
Exit Options #3. Go for an Employee Stock Ownership Plan or ESOP.
Exit Options #4. You can also offer the company to your other stockholders.
Exit Options #5. A third party company can also be another option.
Exit Options #6. You may also drag in an outside investor and then retain minority interest.
Exit Options #7. Why don’t you go public and offer shares.
Exit Options #8. You can also employ a managing team to takeover while you stay as a passive owner.
Exit Options #9. If uninterested in all these, there is still another option and that is to liquidation.
These are actually a lot of options and the challenge is to choose which one which will benefit you and your company, at the same time will fit your goals, personal and business. Next up is a simple four-step process in order to determine which of the options to use.
Steps in determining the right exit options
Step 1: What are your goals personally?
You need to ask yourself this question, along with how much money do you still need when you quit the company but still be able to be financially secure? Aside from money talks, you should also ask yourself about the relationships you will be letting go of – will you still treat your ex-employees as family? Setting goals is the first step before you finalize your exit.
Step 2: Are these goals consistent?
You have to ensure that the goals are consistent. You can seek the help of your advisors to check if they are, because usually they aren’t. Sometimes it leads to conflict when the owner want to get all the cash as he exits the company, or whenever he transfers it to an employee or a family member. To avoid further conflicts and stresses, make sure the goals are consistent.
Step 3: What is the value of my company?
After you have set your goals, check on the salability and value of your business. This is critical because it will help set the future of your company. For instance, if your company’s value does not meet your lifestyle expectations the moment you exit, then you should take certain measures in order to augment your finances. It is advisable that you seek the advice or help of an investment banker to check on your company’s current value. They are the ones you can trust who can give the real value of your business out on the market.
Step 4: What are the legal implications?
The final step would of course include legal matters, including taxation matters. You should study the legal and tax implications of each of the exit options for you. This examination should consider your company’s legal structure, legal agreements when exiting, and all the other changes that must occur upon your exit. Remember that selling a company may have additional tax implications. Make sure that you also consult your company lawyers so that you will minimize the costs you have to pay.
This basic four-step procedure should be able to help you decide the right exit options as mentioned above.