Exit Planning Article in SmartMoney and Kiplinger's Personal Finance
An Exit, Not an End
Detailed Exit Planning helps you maximize your financial return and minimize your tax liability.
Deciding when and how to sell your business is as much about your company’s future as it is about your own.
“Thorough planning gives most business owners the ability to make decisions about exit strategies that are in their best interests,” says John D. Dovich, ChFC, CLU, president and founder of John D. Dovich & Associates, LLC.
Three key questions need to be answered fully and honestly before serious planning can begin:
• When do you want to move on, either to retirement or other ventures?
• What level of after-tax income will be necessary to meet your future financial needs?
• Who is your buyer?
“The answer to the second question is, perhaps, the most important,” says Dovich. “Without having a solid grasp of your long-term financial needs, it’s almost impossible to determine a bottom line—or a timeline—for selling your business.”
When to schedule the sale, and to whom it will be made, are often closely related.
“Selling or gifting the business to a family member can be easier than selling to key employees or outsiders,” says Dovich. “But even selling to family members usually entails several years of careful planning.
“Although unpredictable, recession is part of the natural evolution of economic cycles,” reminds Dovich. “And sometimes the best time to gift a business to a family member is during soft economic times.”
Even if a sale isn’t imminent, having key transition elements in place can be beneficial.
Help Finding Answers
As an independent, fee-based advisory firm and a registered investment advisor with the U.S. Securities and Exchange Commission, John D. Dovich & Associates, LLC is well-positioned to guide you through the planning of your exit strategy, the realization of that plan, and the performance of the next financial phase of your life.
“For many business owners, their greatest asset is their business,” says Dovich. “Selling that asset can produce significant cash, which brings up a host of new issues about how to best invest those funds.
“We know that our clients depend on us for comprehensive, long-term planning that considers all of the alternatives before crafting an exit strategy that is not an end, but a new beginning.”
“When a man does not know which harbor he is heading for, no wind is the right wind.”—Seneca
This material was written and prepared by Advent Media Group
© 2009 Advent Media Group