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5 Consequences Of Not Preparing For Your Business Exit

Often in life, we wait until a change in circumstances happens before we make a big decision. This is true for many business owners who are often too focused on the day-to-day challenges of running their business instead of taking a step back and thinking about preparing for the eventual exit…

The reality is that it can take years to execute a successful exit, so the sooner you start planning you’ll reduce your risks and increase the likelihood you’ll be able to leave on your own terms, financially content and proud of all you’ve accomplished.

In this article we shall discuss the 5 most common consequences of not preparing for your business exit…

  1. Unable to Afford to Retire and Sell Your Business

Many business owners do not realise how much money they will need to net from their sale to accomplish their financial goals. Taxes and fees can dramatically reduce your net proceeds from any sale, even in an owner-financed scenario. Fortunately, there are sale structures that can minimize the tax burden, but time and planning are required to achieve this.

  1. Receiving a Lower Sale Price

Leaving your exit to the last minute can often result in you selling the business for far less than it is worth or for less than you need to be financially comfortable post-exit. To achieve the top price for your business you want to sell when the business is performing at its best and is not dependent on you the owner. However, to get your business to this stage often requires time and planning well in advance.

  1. Limited Exit Options

Last minute transitions driven by burn-out or untimely events such as illness, or death can be damaging to the business and limit your exit options. Those owners who do not have a continuation or exit plan run the risk that their business will not be able to continue without them. This can lead to disruption in the workplace and decreases the business value from a buyer’s perspective.

  1. Employee Departure

If you have worked hard to build a positive business work culture, a sudden or poorly thought-out exit plan can quickly destroy it. You will find that your most valuable employees may leave your organization if your exit plan impairs their position or career aspirations. This will once again have a negative impact on the value of your business from the buyer’s perspective.

  1. Being Taken Advantage of by Buyers

Many business owners often think that the sales process is all about waiting for buyers approach them. However, to get the best deal you need to be proactive and cast the net wide to find yourself the right buyer. Unfortunately, not all buyers have the best intentions so be cautious about sharing any financial or business information. Planning in advance, will allow you to find an advisor who can help you follow the correct protocols, protect your business and find the right buyer when it’s time to exit.

A strategic exit plan is key for long-term sustainability. At Vexus we encourage you to develop and implement your exit plan at least 3 to 5 years in advance of your departure. If you need any confidential advice and guidance regarding your exit options, contact the Vexus team today at

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