LOVE LAW FIRM shares quick tips for success for NY small business owners

You’ve worked hard to make your business a success. You’ve invested your time, money, and effort. But all of that can be for naught if you pass away or become incapacitated and fail to put an exit strategy in place. 

What's an Exit Strategy?

An exit strategy is a plan that’s put into place by a business owner to leave his or her company and provide direction for the succession of leadership. It doesn’t simply mean selling your business when you want to retire.

When should you put an Exit Strategy in place?

In fact, the optimal time to start your succession planning is when your business is starting to succeed. There are a host of contingencies and factors that must be considered even if you know you’re going to sell later. 

For example, what happens to your business if you suddenly die? Who will be able to run the business, or wind it down? Who can collect monies owed to you? Who will sell your business while it’s still valuable? Before clients go elsewhere.

Or what if you’re in a terrible car accident and severely injured? Who can keep things going?

Or, more traditionally, what if you are looking at a 3-7 year horizon in which you want to transition out of the day-to-day grind and want to enjoy the success you’ve earned.

Research shows that about 60% of small business owners don’t have an exit strategy. And about half of that group believe that a succession plan is unnecessary. That’s just not so.

A well-drafted succession or exit plan for your business can help provide financial stability for you and your family before, during, and after the transition.

What are the consequences of lacking an Exit Strategy?

If you don’t draft a plan, your family may be left with no choice but to simply shut down the business to pay taxes or debts if you die unexpectedly. If that doesn’t happen, without an exit strategy, the control of the business could go to a family member who has absolutely no interest or aptitude for managing it (and they sell it for a quarter of its value or run it into the ground). And your family may fight for control and/or disposition of the business. 

A well-drafted business succession plan or exit plan will avoid these consequences. That’s why the time is now to draft your succession or exit plan. This plan will serve as the guide for passing the control of the business to others, no matter the circumstances.

We want your business to always be protected. Get on my calendar to discuss a strategy for ensuring that all of your hard work is protected.

Francine E. Love is the Founder & Managing Attorney at LOVE LAW FIRM PLLC which dedicates its practice to serving entrepreneurs, start-ups and small businesses. The opinions expressed are those of the author. This article is for general information purposes and is not intended to be and should not be taken as legal advice. 

Francine E. Love
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Founder and Managing Attorney at Love Law Firm, PLLC which dedicates its practice to New York business law