In the last few years, research by the Exit Planning Institute (EPI) has indicated an unavoidable fact: many business owners don’t understand how much goes into developing an effective exit strategy. According to the EPI, many owners risk not exiting for an optimal price because they don’t take the necessary steps to prepare for this life-changing moment soon enough.
Christopher Snider, the EPI’s president and CEO, said in an interview earlier this year that:
A survey in February of San Diego business owners (which closely resembled the EPI’s national survey in 2016) emphasized several hurdles that company owners weren’t ready or able to overcome during the exit process, including:
Our focus in this piece is on this final statistic. One of the main factors that can be the difference between a textbook exit and missing out on the maximum return on your investment is time. You could have spent years of your life building your business, and therefore would like years after you exit to spend with your family and pursue your favorite pastimes (or even start another business). But, without considering what income you will need as part of your exit strategy, this ambition is placed under serious scrutiny.
Because, without going through every stage of the M&A process with guidance from professionals like our team at Generational Equity (and with the help of a skilled wealth manager), how can you be sure you will have enough money to maintain your lifestyle once you exit? The quick answer is you can’t.
The issue is this: many business owners assume that either the sale of their company will adequately account for their life post-exit, or that they will be able to live on much less than what they’re currently spending. Others feel they have a firm grasp on what their partner and children spend each year, when the true number proves to be far different.
Over the years we have met many business owners that didn’t understand the gulf that can exist between the market value of a company compared to how much they will need to fund the next stage of their lives. By making assumptions or misjudging how much income you require to support your lifestyle, you may place the long-term financial security of you and your family in jeopardy.
The way to bridge this gap is to grow your company using sound exit planning advice and increase net proceeds when you exit. This is easier said than done, but very achievable with the help of skilled guidance. The first step is to meet with your financial advisor and determine how much you will need to earn after you exit – remember to include any compensation and business perks to ensure an accurate number. Many skip this important step, so make sure you’re not one of them.
Now you know what your income needs to be, you should contact Generational Equity. Our team will provide a thorough and detailed business valuation based on your company’s recast financials. This will give you an accurate assessment of what your business is worth in the current market and determine whether it will meet the income you require. If this is below your threshold, you can now introduce strategies to increase the value of your company over time. We call this our Roadmap for the Enhancing Value which we provide to every client.
This way, time is on your side, and you can treat your exit strategy as a PROCESS, not an EVENT. Through careful planning and effective practices, you can generate the optimal return for the years you’ve put into the growth of your company, and set yourself up for a comfortable post-exit.
If you are ready to invest time in forming your exit strategy, we encourage you to attend one of our executive conferences. Here, you’ll discover the steps involved in the M&A process and how to develop the ideal exit strategy. Plus, our advisors at Generational Equity will take the time to get to know you and your reasons for exiting, so we can help you enjoy life after your company.
Don’t put off your exit planning – contact our team today to find executive conferences taking place near you.
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
By submitting my name electronically and clicking the “submit” button, I understand that I am providing Generational Group, Inc., Generational Equity, LLC, Generational Capital Markets, LLC, DealForce LLC, their affiliates, representatives, contractors, etc. (“Generational Group”) my telephone number, which may include a number that is wireless and/or a number that is on a national, state, or other Do Not Call registry or list. I hereby consent and agree to receive telephone calls including any autodialed and/or pre-recorded telemarketing calls and/or text messages (telemarketing) from or on behalf of Generational Group at the telephone number provided. I further consent and agree that telephone calls may be made using automated technology such as an automatic telephone dialing system, artificial or prerecorded voice, or SMS text messaging. Consent is not a condition of purchase. I further warrant and represent that any telephone number provided is not on any state or national Do Not Call Registry and that by agreeing to these terms and conditions that if any number provided is on any such registry, I hereby consent and agree to receive telemarking calls and/or communications including any phone calls, text messages, URLs, links, emails, etc. to the telephone number(s) and/or any e-mail addresses provided. I understand that by entering my name in the electronic form provided, that I am signing my name as equally as if it was my handwritten signature and that it is my intent to provide an “electronic signature” as that term is defined in state and federal law, as well as industry practices for e-commerce.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.
Success, you have been added to our list.
it all started with a conference.
start your story today,
speak directly with one of our senior advisors +1-972-232-1121