We Buy Your Business
For some, planning a business exit can be a predictable, methodical
process. We know the competition; we understand market demands, know
when we want to sell and might even know the actual date. But for far
too many business owners, the business exit comes as a harsh reality
and often unplanned event.
Protecting your business and assets against the dreaded six D’s of an
unplanned business exit can give whole new meaning to the term
“Disaster Management”. While every business may experience unexpected
pitfalls, careful planning to ensure risk exposure is minimized can
assist in keeping you in the driver’s seat when it comes to managing
your company. Familiarize yourself with the six D’s of an unplanned
business exit: debt, death, disability, divorce, departure and
disaster. Know the enemy and look to address all six D’s in your
operating and buy / sell agreements.
The Six D's of an Unplanned Business Exit
Debt:No one goes into business and plans on it not succeeding, but
40,000 businesses fail every month in the United States. When debt
exceeds revenue, it is critical to exit timely in order to minimize
loses. Understanding limitations and protecting critical assets are key
to successful divesture.
Death:Many businesses are solely dependant on their owner’s abilities,
relationships, and passion to drive success, and when there is a death
of an owner or partner of a business, it can have significant impact to
a business almost immediately. While no one wants to consider their own
demise, the strength and longevity of a business relies on being able
to plan for such a critical loss even if it means downsizing or
reorganization. The survival of a business in relation to key
individuals needs to be evaluated and exit strategies planned
accordingly.
Disability:Unbelievably, death is not as likely to end the business as
a disability. A disability to a business partner can put a significant
drain on cash flow, daily workloads, and excess down time, all of which
can be devastating. Insurance and financial planning towards
alleviating such an impact needs to be carefully evaluated especially
when dealing with small business start ups where funding and resources
are limited.
Divorce:No one wants to plan for a business or personal divorce, yet
while Pre-nuptial agreements may be gaining in popularity many people
never look to manage such impact to their businesses. What happens when
the partners cannot get along? Or worse, you inherit another partner
due to a personal divorce settlement? Exiting the business might be the
only alternative you are provided.
Departure:It does not sound as bad as death, but it can wreak the same
results. A partner, key employees, or other resources decide to go to
the competition, retire, burn out, or win the lotto. When they leave,
how does this impact your business going forward?
Disaster:If the five D’s above where not enough to impact your
business, there are no limit to the other disasters that may occur that
were never planned on: robbery, sickness, employee theft, employee
turnover, natural devastating events, etc. In today’s post Katrina, 911
world the impact of the chaos theory is enough to keep even the best
business minds awake at night. Plan for the worst; strive for the best
and know when to get out if need be.
For the typical business owner, each one of the six D’s has special
demands on the family, income, taxes, and control of assets. An
agreement, commonly called buy/sell agreements, can be used to plan for
the impact associated with the dreaded six D's. A successful sustaining
business exists as a separate entity from personal concerns and risk
can be reduced by developing mutually fair and equitable agreements
prior to these events occurring.
Business is an evolution and travels a diverse path. While some may
look on an unplanned exit as a failure others may see an opportunity
for growth and freedom.
www.WeBuyYourBusiness.com
Article Source: http://www.articlesbase.com/
business-articles/the-unplanned-business-exit-236313.html
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www.WeBuyYourBusiness.com
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