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Five Critical Elements of Exit Planning
Today we spoke with Peter Racen. He’s now a partner at Moneta, but about 24 years ago he was involved in selling a family run business that he had been a part of for 21 years. During that time, he realized that all of them, himself included, had to deal with a lot of issues both as a family and as a company. In 1999 when he sold the company, he wanted to help other business owners in financial planning. He continues to do just that, but a few months ago he merged his practice with Moneta so he could share his own succession plan.
Exiting a business can take anywhere from five to ten years ideally so knowing the 5 elements can certainly put things into perspective for business owners. The first element is determining your departure target date. The second one is a financial needs analysis to see what you are going to need in order to be financially independent during your retirement. The third element is identifying your successor. The fourth is to determine what your business is worth. And the last element is the future cash flow estimate which ties into the financial needs analysis somewhat.
Buyers right now are looking for well running businesses and not those that need fixing. By planning ahead and working with Peter and his company any issues can be taken care of and when it comes time to sell you can get the most value from your business by doing so.
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By Tabetha SheaverToday we spoke with Peter Racen. He’s now a partner at Moneta, but about 24 years ago he was involved in selling a family run business that he had been a part of for 21 years. During that time, he realized that all of them, himself included, had to deal with a lot of issues both as a family and as a company. In 1999 when he sold the company, he wanted to help other business owners in financial planning. He continues to do just that, but a few months ago he merged his practice with Moneta so he could share his own succession plan.
Exiting a business can take anywhere from five to ten years ideally so knowing the 5 elements can certainly put things into perspective for business owners. The first element is determining your departure target date. The second one is a financial needs analysis to see what you are going to need in order to be financially independent during your retirement. The third element is identifying your successor. The fourth is to determine what your business is worth. And the last element is the future cash flow estimate which ties into the financial needs analysis somewhat.
Buyers right now are looking for well running businesses and not those that need fixing. By planning ahead and working with Peter and his company any issues can be taken care of and when it comes time to sell you can get the most value from your business by doing so.