Research in the UK, Canada and the US indicates that small to mid-sized business owners lack a plan for ending their businesses on their own terms, according to Brent Dees, president of Brent Dees Financial Planning.
(PRWEB) May 25, 2004 -- Research in the UK, Canada and the US indicates that small to mid-sized business owners lack a plan for ending their businesses on their own terms, according to Brent Dees, president of Brent Dees Financial Planning, www.brentdees.com.
In the UK, 75 percent of small to medium-sized businesses have no exit strategy. In Canada, 92 percent of entrepreneurs say it is a good idea to have an exit strategy, but only 44 percent actually have one. In the US, more than 20 percent of small industrial business owners had not even thought about exiting their businesses," says Dees, a CFP®.
Even professionals like physicians, dentists, and veterinarians are ill prepared for exiting their practices. A survey of this group indicated that 95 percent believed that poor planning left them unable to exit their businesses on their own schedule."
Dees says that an owner will leave the business in one of the four Ds: death, disability, divorce or departure, and that to have a successful business, you must plan for all of them. There are four key things each business owner must do to ensure a happy ending:
- Incorporate the business in a formal relationship that legally recognizes that the owner and the business are separate entities
- Devise a method of determining the value of the corporation that can be done at least annually and will qualify under IRS standards
- Develop an employee benefit plan that will assist with the departure of each partner in case of death, disability, or retirement
- Determine who gets the company and who gets paid off and in what manner if the owners simply cannot get along or one wants to leave
If you think these decisions are hard now, try to make them in the heat of the moment," Dees says. You have to think as if you are the one who wants to leave as well as the one who wants to stay. It is not easy, but it is necessary."
According to Dees, the Great American Dream" is to create a business of your own; to bring it to life and make it successful, financially. He says a truly successful business is one that makes you financially independent. How you leave will determine your financial success and that of your family. Just as building a successful business takes planning, hard work, and a little luck, so does leaving it.
Brent Dees, CFP®, CSA, is president of Brent Dees Financial Planning and a registered principal with the Financial Network Investment Corporation. He is one of only a handful of advisors in the nation who has both the certified financial planner and the certified senior advisor designations. The company focuses on preserving, protecting and growing the assets of small business owners in the Charlotte and Greensboro, NC metro areas so they can focus on running their businesses. Dees can be reached at 704-376-1005, or on the web at www.brentdees.com.
###
|
