Follow Dallas Linkedin
Email Dallas Email
Financial
Sep 26, 2018

Even If You Never Plan to Exit Your Business, Exit Planning Can Still Help

Sponsored Content provided by Dallas Romanowski - Managing Partner, Cornerstone Business Advisors

Many business owners take pride in the businesses they’ve built.

Some of those owners are so proud and dedicated to their businesses that they’d be happy dying at their desks, doing what they love. They believe they can wait until they’re ready to begin thinking about what happens when they exit the business, either by choice or otherwise.

A few believe they don’t have to plan for their exits at all. They figure that since they are willing to die in the business, there’s no point in planning for their exits.

This might be a flawed mindset.       

You may be asking yourself, If I don’t plan on leaving my business, why would I need exit planning? Many business owners ask us that very same question.

There are three key ways in which exit planning can help you and your business, even if you never plan to leave it.


Minimizing Taxes

No matter how you decide to exit – whether selling the business, transferring ownership, or dying at your desk – you could end up owing more taxes than you expect if you aren’t prepared.

Exit planning can help address this unfortunate fact.

There are two distinct ways exit planning can help minimize the taxes you’ll owe, if you truly desire to work until you die. First, your estate can benefit from a step-up in basis if your ownership transfers according to your estate plan. Second, current tax laws have raised the lifetime exclusion to the point where most small and mid-sized business owners don’t have to pay estate taxes, provided owners have an appropriate estate plan.

Since estate planning is a critical step in proper exit planning, you can use exit planning to leverage these benefits.


Doing It Your Way

Perhaps you have built a work culture that’s so unique and strong that it serves as a competitive advantage, per se. Maybe you take pride in how your business gives back to the community through charity and creating jobs. Or maybe you want people to remember your contributions fondly once you finally exit your ownership.

Exit planning lets you pursue and protect these kinds of goals. Exit planning strategies can foster the culture you’ve built, protect the employees that make the business successful, and help you build the legacy you desire.

Each exit planning strategy you end up using depends on what’s most important to you. But when your values take precedence, exit planning can help keep those values at the forefront and minimize the “Things were better before new ownership took over” kinds of discussions that are common when owners don’t protect their companies’ values.


Increasing Growth Potential

Owners who decide to stay in their businesses forever rarely want to stay in a stagnant business. They often want and expect their businesses to grow in value, especially if they’re spearheading the efforts.

However, experience shows that for many business owners, there’s a point at which they cannot grow the company any more by simply doing what they’ve been doing.

What can you do if you want to stay in your business but don’t know how to keep growing it?
Business owners who use exit planning discover that exit planning focuses on building business value regardless of whether they exit or not. Exit planning can help you increase your business’ growth potential by installing value drivers.

Value drivers are aspects of your business that make it an attractive purchase to buyers. This can be important even if you decide not to exit during your lifetime because it gives you more options for what happens to your business when you inevitably leave it.

When done properly, installing value drivers can make ownership even more fulfilling. That’s because certain value drivers can allow you to do only the things you want to do within the business while transferring responsibilities you don’t like to equally or even more highly qualified employees.

Whether you want to work until you die or exit during your lifetime, exit planning can likely address concerns you have about what will happen to your business, family, and employees in the future.

If you’d like to discuss which aspects of your business might benefit from exit planning, please contact us today.

© Copyright 2018 Business Enterprise Institute, Inc. All Rights Reserved

As a member of the Business Enterprise Institute (BEI), Cornerstone Business Advisors is an authorized distributor of BEI’s content and Exit Planning Tools.

The Cornerstone team includes former C-Level executives, successful entrepreneurs and advisers who offer unmatched experience in delivering advanced, custom-tailored, results-oriented solutions for business leaders. We developed the Performance Culture System™ to help clients implement best practices and drive high performance throughout their organization. For more information, visit www.launchgrowexit.com, call (910) 681-1420 or email [email protected].

Other Posts from Dallas Romanowski

Bizjournalblockad
Ico insights

INSIGHTS

SPONSORS' CONTENT
Frankjolly liveoakprivatewealth

Roaring Market, Rocky Economy

Frank Jolley - Live Oak Private Wealth
Erinpayne 9212090051

Tutoring At CFLC

Erin Payne - Cape Fear Literacy Council
Burrus rob headshot 300x300

Internal Auditors Can Serve A Key Role In Tough Times

Robert Burrus - Cameron School of Business - UNC-Wilmington

Trending News

South College Road Property For Sale After Honda Dealership's Move

Cece Nunn - Sep 24, 2020

Judge Weighs Temporary Delay Request On NHRMC Vote

Vicky Janowski - Sep 23, 2020

NHC Commissioners Look To Vote Oct. 5 On Hospital Sale

Vicky Janowski - Sep 25, 2020

Cape Fear Sports Medicine Joining EmergeOrtho

Staff Reports - Sep 25, 2020

Third ReStore In New Hanover County Helps Expand Habitat Capabilities

Jenny Callison - Sep 24, 2020

In The Current Issue

Connecting The Business Community Amid The Shutdowns

This year's WilmingtonBiz Conference & Expo is a little different, but still aims to help the area's business community make vital one-on-on...


Biz Expo Keynote: Naudé Oversees NCino's Rapid Growth

CEO Pierre Naudé, who took the helm of Wilmington-based nCino in 2012, is a keynote speaker for this year's WilmingtonBiz Conference & Expo....


Take A Walk To Local Movie Sites In Town Of Burgaw

The town of Burgaw might seem a long way from California’s Tinseltown, but it has been a star in its own right as the backdrop to many Holly...

Book On Business

The 2020 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2020 Leadership Accelerator: Virtual Workshops for Real Leaders
2019 Health Care Heroes
August 26, 2019 Power Breakfast: A Healthy Sale?
2019 WilmingtonBiz Expo Keynote Lunch - CEO, nCino, Pierre Naude`