My Business Makes Good Money. Should I Still Exit?

April 04, 2016

My Business Makes Good Money. Should I Still Exit?

Synopsis
2 Minute Read

Just because you're ready to step away from your business, doesn't mean you need to fully divest. Read key questions to ask yourself when considering a partial exit.

This is a great question. Why wouldn't you? No one can say that a full exit or sale of the business is the best approach, when in fact, it is not. Keeping the business going without your day-to-day involvement does have some implications and as long as you plan accordingly, this could be your best option. Here are some things to consider and that will help you decide if this is the best route for you:

How will you guide and lead the company from a distance? Will it be through a board, directly or someone you appoint to replace yourself?

If you want to establish a board of advisors or directors, you need to be absolutely clear as to their roles. Specifically, are they there to only give advice or also to take over legal control and be given the keys to guide and direct the company management?

If you need to replace yourself from running the business, whether through a new manager or a group such as a board, ask yourself how you will be able to guide and direct their actions and if they will be willing to accept your guidance.

Do you and your key employees truly have sufficient comfort with each other to avoid role confusion? For example, will your advice be construed as advice that can be taken, considered and ignored or will it be considered binding guidance?

How will you manage the risk of your investment remaining inside the company or companies? Can you = ensure your absence does not make you lose complete touch with the safety of the underlying investment value? Are you comfortable leaving your future retirement fund in the hands of individuals who run the company mostly autonomously?

What are the important questions you have to ask yourself about the business, from a distance to ensure you are able to keep your fingers sufficiently on the pulse of the business? For more information as to how you can successfully transition out of your business, contact Eben Louw, CPA, CA at 604.853.9471 [email protected]

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