Starting a company is one of the biggest decisions you’ll ever make in your life, and your hope is that at some point in time, it will grow to the point where it has real value and you can sell your share of stock, retire, and do whatever you want in your later years.
How do you go about this process, though?
First, what is your company worth? If it’s a huge company and has ongoing revenue coming from all sorts of different places, buyers will be very interested in it because if you walk out the door, they know they can walk through that same door and keep the company going while making money.
What if the company relies on who you are as a person, though? What if it relies on your talents and your ability to generate revenue? If that’s the case, odds are it won’t be worth nearly as much. This is why it’s important to replicate yourself.
Let’s say you have replicated yourself and you’ve built a big enough company with a team of good people who can operate your company when you’re gone. What’s really important is to plan for your exit. Many people don’t do this. Instead, they just wait until it’s time to retire and hope that everything will work out.
“Our succession planning process can help you plan your exit.”
Think about going through a process where you can plan your exit. Something that allows you to not only value your company and what it’s worth, but also look at the people around you that you can possibly sell the business to. It’s important to plan ahead because some of those people might not have a lot of money right now, and it’s important for you to get stock in their hands so when you are ready to retire, they can go to the bank and finance the buyout.
You might also have the desire to transfer the business to your children. In that case, you may have key executives you need to keep around to ensure the business will thrive once you retire. If those executives don’t have any stock, you need to offer incentive plans to keep them in the business.
That’s what our succession planning process does. Our firm will help you look at the valuation of the company, the people you have on board who could possibly succeed you, and formulate a plan to help you transition out of the business when you’re ready to do it.
If you need to do some succession planning or you have any other questions, don’t hesitate to give us a call so we can learn about your business. We’d love to help you.