By: Elisa Berger, Vice President, Charter Capital Partners
For many business owners, the decision surrounding how and when to exit the business can be complicated and emotional. It is one of the most important life events for any business owner, yet many push planning to the back burner, believing it can be tackled later when they are ready.
In fact, many things in life happen before we are ready. Planning early enables business owners to leave a business on their own terms, whether the exit is strategic, or event driven.
A strategic exit typically is the culmination of a thorough succession or exit plan. It enables the owner to leave the business while in the most advantageous position and ensures business continuity is in line with their wishes. Options include a third-party transaction, intra-family or management succession, liquidation or other alternatives. While every owner likely wishes for a strategic exit from their business, it should be noted that any quality succession plan includes a blueprint for how to handle an unexpected event-driven exit.
- An event-driven exit can be difficult to plan for and encompasses exits related to death, health/disability, family instability, unexpected business downturns, burnout or other unforeseen circumstances. Event-driven exits are less desirable for ownership and are less planned for, although many exits fall into this category.
Developing a plan for each type of exit, whether strategic or event driven, is a critical piece of any succession plan. Read more at Grand Rapids Business Journal