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Don't Let Your Client’s Business Exit Fail: Why Exit Ignorance Could Cost Them Everything
As a trusted business advisor, you have a significant responsibility to your clients. Not only do you provide guidance and support to help them grow and succeed, but you also have a fiduciary duty to warn them about potential risks and dangers that could impact their business. One of the most critical risks facing small-medium businesses today is the lack of preparation for a successful exit.
According to data, only 1 in 10 small-medium businesses have great exits, while 2/3 of small businesses shut down and give the owner no personal or financial legacy because they haven't prepared. This highlights the urgent need for business advisors to prioritize exit planning as a critical component of their services.
As a trusted advisor, you have a fiduciary duty to warn your clients about the risks associated with not preparing for their business exit. These risks include:
Loss of Value: Many businesses fail to maximize their value because they haven't properly prepared for their exit. This can result in a lower sale price or missed opportunities for alternative exit strategies.
Family Conflicts: When family members are involved in the business, a lack of proper planning can result in conflicts and disputes over ownership and management.
Tax Consequences: Without proper planning, business owners may face significant tax consequences when exiting their business.
Legal Issues: A lack of preparation can result in legal challenges, such as breach of contract, shareholder disputes, or employment law violations.
Personal and Financial Loss: Business owners who haven't prepared for their exit may face personal and financial losses, including lost income, retirement savings, and legacy.
As a business advisor, it is essential to educate your clients about the importance of exit planning and provide them with the necessary tools, expertise and resources to prepare. This includes pulling together an advisory team that can cover all aspects of a comprehensive exit strategy & execution coaching that addresses their specific needs and goals.
In conclusion, as a business advisor, you have a fiduciary duty to warn your clients about the risks and dangers of not preparing for their business exit well in advance. By prioritizing exit planning and providing your clients with the necessary tools, expertise and resources to prepare, you can help them maximize their value, minimize their risks, and achieve a successful exit that leaves them with the personal and financial legacy they truly want.
Lastly, your services are much more likely to continue with a business that has successfully transitioned and is thriving after the owners exit thanks to your support.
Chief Transformation Officer
March 24, 2023