Mark J. Gilbert, CPA/PFS, MBA, principal with Reason Financial Advisors, Inc. and formerly a senior financial planner at a Chicago-based bank, was quoted in an article written by Jim Kendall titled “Business Owners Should Plan Their Exit Strategies” published on April 17, 2006, in the Daily Herald newspaper, which bills itself as “Suburban Chicago’s Information Source.”
The article discussed the need for business owners to plan for a successful exit from their businesses. Gilbert’s recommendation was that business owners should determine what they want their “status of life to look like” in retirement, “then operate the business to fulfill that goal.” He advised owners to “structure the business to facilitate the goal. Four or five years away from the exit event, you (business owners) should be thinking about what you want your future to look like beyond the business.”
Exit planning is critical for the owners of privately held businesses for a number of reasons. In many cases, the value of the business is the single largest asset on the owner’s personal balance sheet and successfully converting that value into liquid assets is necessary for a comfortable retirement. In addition, the most likely buyer of a business is often an employee or group of employees who must finance the purchase through cash flow from the business. To do so often requires creative planning techniques that the company must employ several years in advance of the sale.
The professionals at Reason Financial Advisors, Inc. have experience in the planning process and knowledge of the unique tools that a business owner can employ to enhance the likelihood of a successful exit from his or her business. Reason Financial Advisors, Inc. is an independent, fee-only financial planning and investment advisory firm working with individuals and families throughout the Chicago metropolitan area.