Getting into business for yourself can be exciting, but the paperwork and decision-making that goes along with it is often daunting. Working with a legal professional who understands business requirements can help you face the mountain of formation without making too many mistakes, and the same can be true when you are ready to exit your business model.
While many people plan to work at their small business their entire lives and then pass that business on to adult children, those plans don’t always work out. Your adult children might not want to take over the family business, and you might want to get out of business earlier than you planned. Having one or more business exit strategies planned can help you exit gracefully and with as much financial benefit as possible.
One common exit strategy when heirs don’t want to take over is selling the small business to someone who does want to get involved. Often, individuals sell to a trusted and long-time employee who is like part of the family. In this way, business owners are often able to pass along the business to someone who will continue with brand values and protect other employees. If this isn’t an option, you might also consider selling to a competitor, though you’ll likely sell for less money and not be able to protect your brand and employees.
Another option is to consider placing your business in a trust. The trust can be administered by whoever you choose, and the business can continue to run if you have put the right people in place. Profits from the business funnel into the trust and can be used by your heirs or others as you defined, but your heirs won’t necessarily have to run the business.
Getting out of business can be as complex as getting into it. Don’t hesitate to seek legal help to ensure you get the most out of all your hard work.
