For Every Business Owner
Who Deserves The Ultimate Pay Day
ATTENTION BUSINESS OWNERS:
Do You Have An Exit Strategy?
Would You Like To Sell Your Business One Day?
How Much Is Your Business Worth and …
Will Someone Buy It?
For Business Owners who want to maximise the sale value of their
business, retire with more cash in the bank… and enjoy more
lifestyle choices… the time to act is now!
Business Exit Plan
Every small business owner needs an exit plan. This is a blueprint for what you’re going to do when it comes time for you to leave your business.
There are five main ways that most people leave a business:
- Selling the business or selling all the shares in the business, depending on structure
- Transferring shares in the business to family, friends, or business partners
- Winding up the business (officially shutting it down)
- Involuntary liquidation (a third party sells off all your assets to pay your creditors)
- Abandoning the business (simply walking away from it)
Some of these categories are more desirable to be in than others. The first two are the two most business owners will prefer.
Whatever way you are going to exit the business, it is essential to have a plan, and the best thing you can do is get advice from an exit planner to help you do it. The Exit Strategy Group is a business exit planner in Melbourne providing help for Australian business owners to plan for successfully disconnecting from their business.
Talk to a consultant from The Exit Strategy Group today and you will have all the information you need to make the right decisions. In the meantime, the following summaries spell out most of the key points in each exit scenario.
Selling a business with an exit planner
When you are selling your business, the first step is to obtain an accurate business valuation. After you have done this, you will know exactly what your business is really worth, so you’ll be a lot more confident in setting your price.
It can help when you are selling to engage an agent to help you get the sale completed quickly. Although there are fees involved, agents have huge networks and loads of resources. Potential buyers are much more likely to contact agents directly than to browse around trying to find a business for sale on their own.
Of course this does not mean you can’t sell a business independently. You may just have to wait more time before you can complete the sale.
Business transitioning is what happens when you transfer all your shares in a business without selling them. Obviously this will normally be to somebody you know very well. It may be your existing business partner, it may be a family member, or it may be a loyal long term employee.
Technically what happens is that whoever takes over from you in the business will be your successor. There are certain things you’ll need to be sure of before you actually go ahead and hand over the business to your successor.
The most obvious one is that you’ll want to be sure that the person you hand over the business to actually has the ability to run it.
A big mistake many people make is to hand over full control of their business to a family member without preparing that family member in any way for the challenges of running a business successfully. If it all goes wrong, it not only is devastating from a business point of view, but it could also seriously strain your relationships.
There are other things you’ll need to consider as well. For more advice on business transitioning, set up a free consultation with The Exit Strategy Group. The topic is just too complex to easily explain everything you’d need to know in a single web page.
Using an Exit Plan to Wind up a business
This is what you do with a business that you simply want to cease. You don’t want to sell it, you don’t want to pass it on to somebody else. You just want the business to stop existing.
ASIC and the ATO have done everything possible to ensure this is as difficult and intimidating as possible. The wording of all the relevant legislation is designed to frighten you. It’s all about ensuring you’re not closing the business down in order to get out of paying debts, and most especially tax debts.
You may expect that winding up a business should be as simple as filling in a form, but in truth there will be many formalities, including the voluntary liquidation of all business assets so the government will have a monetary value to tax.
From the government point of view, you not selling the business is cheating the government out of lucrative capital gains tax (CGT), so at least liquidation is a way to ensure you don’t get out of the business entirely tax free.
Involuntary liquidation of a business happens when the business is completely unsuccessful and has no capacity to pay its debts. In this case, all the assets of the business are sold (liquidated) and all the money goes to pay creditors you owe money to.
You lose everything in this scenario. If your business was a company limited by shares, then your liability is restricted to the assets of the business itself (except for tax liabilities), but if you were a sole proprietor or partnership, your liability may still exist even after the business has been liquidated, and you may then be forced to liquidate your personal assets (bankruptcy).
Under Australian law, bankrupt people are excluded from becoming a director of another Australian business for five years after declaring bankruptcy. They may also have difficulty obtaining a passport, may have to surrender their existing passport, and various other indignities.
Needless to say, you should do your very best to avoid involuntary liquidation, and that counts extra if you registered as a sole proprietor or partnership.
Abandoning a business
Let’s hope you’re never in a position where you need to do this. Strictly speaking, abandoning a business is illegal in Australia. The government prefers business owners to legally wind up a business so they can tax the business owner. They can’t tax you if you don’t liquidate the assets or sell the business. If there’s one thing governments hate, it’s when they can’t tax you.
Even so, prosecution for this is very rare. What normally happens is ASIC gets indignant that you have not filed your annual return and then not paid the exorbitant late fee they’ll levy for a late return. Ignore the warnings long enough, and what usually happens is ASIC quietly deregisters you, files it as a bad debt, sells the debt to a collection agency, and forgets about you.
That’s normally as far as it goes. There’s always a chance they may want to make an example of you, however, so it’s best to stick to the legal methods of exiting a business.
This does not mean there are no consequences for you. It will be next to impossible for you to become a director of another registered business in Australia, and you won’t be able to claim a government pension or certain other social security benefits in the future because you won’t have the necessary proof of having wound up the business you were formerly a director of.
Anyone in business should have an exit plan, ideally before they even get started in business. Without an exit plan, you are flying blind, allowing fate to decide what will happen when it comes time to get out of the business.
Exit planning for business owners can make a significant difference to the outcome that eventuates once the business transitions to new hands. Do you already know what you want to happen when you retire from the business? Some things to think about include:
- If it is a family business, is there a plan for succession within the family?
- Do you intend to retain a financial stake in the business?
- If you are selling, do you know the true value of the business?
- Will you make enough money from the sale to allow you to retire well?
These are just some of the questions that are important to find answers to. The best way to figure out how to write an exit strategy is to get help from an exit planner.
Exit Planner in Melbourne
Melbourne based business exit planning consultants, The Exit Strategy Group, can assist with exit planning for business owners anywhere in Australia.
Don’t leave everything to chance. Take action early and be prepared for whatever may come your way. The perfect retirement is only one possible outcome among many different scenarios.
Have you thought about what you will do if you are forced to retire early due to health problems? There are many other scenarios that could contribute to an earlier-than-expected closure. You need to be prepared for those, and also for the more desirable outcomes.
Remember, too, that you need to think about the impact of taxes such as Capital Gains Tax (CGT) and income tax. These taxes can make a considerable dent in the amount you finally receive from any income derived from the sale of your business.
Your ultimate pay day should be rewarding, and you can certainly take positive steps toward achieving the best possible rewards by having a well developed exit plan for your business.
With help from The Exit Strategy Group you can be prepared for contingencies while also setting up the conditions that will give you the best chance of selling your business at its maximum value.
The exit plan in business needs to be decided as early as you possibly can. The longer you wait, the more difficult it will become to make a start on it, especially if you decide not to get expert help in developing your plan.
By consulting The Exit Strategy Group, you will have access to expert advice from specialists in exit strategy development and you will learn how to write an exit strategy. You will have help in determining the true value of your business, discovering how to sell your business, and putting the correct arrangements in place to cover multiple outcome scenarios.
Don’t wait any longer to start planning your exit strategy. Call or email The Exit Strategy Group today, and get a head start on preparing for your ultimate pay day.
Have you developed your exit plan?
If you thought getting into business was complicated, just wait until it’s time to get out of business. Often the major complication business owners run into is not recognising when it’s the right time to get out. This is because they haven’t planned in advance.
Not every business owner knows how to write an exit strategy, because that’s not something typically discussed during all the hype and excitement of setting up a new business. Without an exit plan, you’re flying blind, heading for a retirement you haven’t thought out carefully.
As with anything like this, the devil can be in the details, so failing to adequately plan could leave you in a disaster, or at least at a disadvantage.
The goal of every business owner should be to maximize the value of their business upon retirement, which is why it’s vital for you to talk with the best exit planner in Melbourne, The Exit Strategy Group.
Having an expert exit planner to advise you means you’re not leaving anything to chance. You are taking early action and preparing yourself for the next step in your journey, which may be retirement, or may be the commencement of a new business venture.
Rely on The Exit Strategy Group to help you develop an effective exit plan in line with what you hope to achieve. This is the best way because your exit strategy consultant is an independent third party with no stake in your business. When you are too close to the business, it is too easy to allow emotion to cloud your vision.
There can be all kinds of difficulties and problems you need to be prepared for in advance. It’s actually best to develop multiple exit strategies and give yourself plenty of options.
The exact circumstances under which you will exit the business can’t always be anticipated in advance, which is why planning for multiple scenarios makes sense.
If you had to leave the business due to health reasons, for example, that would be a scenario where you may need to make a quick sale and raise whatever cash you can quickly. In a different scenario, you would be more likely to hold out longer, seeking the best price you could get on the sale.
Another scenario is that you may just want to opt out of having executive control of the business, but still remain as a shareholder in the company. This is more common in family businesses, but it’s certainly sometimes the case with other businesses, especially if they’re running strong with good future prospects.
Be prepared. Make your exit plan now.
Whatever the situation may be when you are exiting from your business, having the confidence of knowing you have already planned for it will make it much easier.
The best way to prepare your exit plan is with expert advice, so call The Exit Strategy Group today on 1300 394 878 and get started on developing your exit plan.
The Exit Strategy Group can assist in working out how to calculate what your business is worth, how to value your business, business succession planning, how to sell a small business and transition planning.
In this breakthrough book, you will discover there’s more to a profitable
exit strategy than just selling your business…with answer to these and
many more myths believed by countless business owners :
Myth #1: I don’t need an exit strategy until I’m ready to sell my business
Myth #2: I can’t afford to dedicate the time involved with exit planning
Myth #3: The wealth of my business is defined by how much I earn
Myth #4: If I have a growth strategy, why do I need an exit strategy?
Kerry Boulton, CEO and Founder of The Exit Strategy Group and NEXUS Business
Coaching, is Australia’s most respected exit strategy advisor. With over 20 years in
business as an entrepreneur, transformative coach and consultant, sought-after
speaker and talented facilitator, Kerry wrote The Uncensored TRUTH About Exit
Strategies to help as many business owners as she can to monetise the wealth that’s lying in their businesses.
The Uncensored TRUTH About Exit Strategies details how to build a strong and
successful exit plan, which is an absolute must if you want to get full value from
any sale. Kerry exposes and debunks many myths and gives you practical advice. She
walks you through what most people don’t know – or refuse to believe – about the
process of planning their exit.
Kerry believes exit planning is a process, not a destination. She helps you overcome
challenges you’re likely to face as a business owner and most important, the steps to
ensure you find financial freedom and do not become just another statistic.
The Cold Hard Facts You NEED to Know If You Want To Sell Your Business Someday
81% of Australian business owners plan to retire in the next 10 years
53% of them have no exit strategy
22% will shut shop*
How To Increase The Value of Your Business By Up To 71%* In Just 24 Months …and Have the Biggest Pay Day of Your Life
*Based on actual client results to date
Are you ready for the huge wave of business sales looming on the horizon and a lot of potential competition? Buyers will be picking and choosing only the best. Email info@TheExitStrategyGroup.com.au and ask for your FREE Value Builder Report.
AND…when you order your FREE copy of my book, The Uncensored Truth About Exit Strategies” you’ll find out …
…there’s a lot more to your Exit Strategy
than a succession plan or just selling your business…
You’ve worked hard for years building your business. You know how much value you’ve created and it’s worth plenty to someone who can take it to the next level.
The question is – how do you even start thinking about your exit plan when you aren’t anywhere near ready to exit or sell your business?
The gap between the idea of selling – or creating any sort of succession plan – and actually getting the deal on the table on your terms and at the time you want – can be very wide and very deep.
The fact is…only 20% of business owners who say they plan to sell their business ever make it their ultimate pay day.
That’s a very sobering statistic. Will you be in the 20% who do?
Many business owners simply don’t know what they need to know to prepare for succession, transition of ownership and exit. Exit strategies are not just about making money, Business owners often have other goals such as establishing a legacy, ensuring the business remains in their family, or continuing to have a say in what happens in the business.
…No matter what exit strategy you choose – you can guarantee your best outcome by simply this: PLANNING IN ADVANCE. There are immediate benefits to getting started preparing your exit strategy. You don’t have to wait for the exit date before claiming more of your wealth!
Exit strategies are something every investor looks for… The questions are the same – no matter what the size of the business. How am I going to get my money out?And how much are you going to get as the owner?
Having an exit strategy worked out in advance helps ensure you like the answers to those questions and gives you some control over your business’s future.