This is the second in a series of articles on exit planning in the green industry.  This article will focus on what we consider to be the first step in effective exit planning, which is understanding your objectives.
Understanding your own objectives may not be quite as simple as it may appear.
I thought it might be interesting to share some of the objectives people have told me that they have in exit planning:
* What I really want to do is pass the business on to my children, but I don’t know how to make that work.
* My employees helped build this business and I think the best for everyone would be for the employees to be able to own the business.
* The most import thing to me is that I have a secure retirement.  I have t have enough  money to be secure in retirement.
* I have a new job lined up and I am ready to slow down a bit, but I need to make plans to sell my business to make that happen.
* My partners and I don’t really have the same objectives.  One of them wants to retire, but the rest of us want to stay with the business for many years.
* I always planned to pass the business on to my son, but he doesn’t seem interested at all now.
* I had always intended to pass the business on to my child, but they haven’t really demonstrated any real business aptitude, so I don’t think that’s going to work.
* I think I am close to having taken the business as far as I can on my own.  If the business is to survive and thrive, it will need more capital than I can contribute or it will need talent and leadership that I can not provide.
* I don’t really want to sell my business and my best guess is I still won’t want to five years down the road, but I would like to know that I can have options if things change.
As varied as those comments, they are really just  the simple versions of objectives that business owners.  Many business owners have some combination of many of those concerns.  The situation is often complicated by the fact that business partners who work together perfectly well in operating the business may have very different needs and objectives when it comes to exit planning, with different time frames, family issues, lifestyle issues, etc. to contend with.
Once you have wrestled with the idea of what your objectives are, it is time to quantify them.
For example, if retirement is your objective, what level of assets or monthly cash flow will be required to achieve your retirement objectives, considering not just the business, but your other investments, including retirement funds and social security, if applicable?
A similar analysis is necessary if you are contemplating a career shift or acquiring (or starting)  a different business.
Usually, it is necessary to involve your accountant and your financial advisor in this process to make sure you really understand your situation and what your options may be.  A facilitator can often help you understand your own objectives better.  He or she can also coordinate the input of your various advisors and help synthesize the various factors as you build yur plan to achieve your objectives.
An important thing to remember is that objectives change over time.  You really need to revisit your objectives regularly to make sure the plans you have in place still match your objectives.
Next month, we will address the next step in exit planning, understanding the value and marketability of your business, or put another way, understanding what you have to work with.

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