Life insurance can be likened to business exit planning

It’s quite a strange analogy to make, so let me explain.

When we’re born, we’re thrown into this world of endless possibilities, full of opportunity and wonder.

The last thing that’s on our minds when we’re young is what will happen when we leave this world. What happens to the family and friends we leave behind? What will become of those that depend on us to survive?

All we are concerned about, at least whilst we’re young, is tackling the issues and events that present themselves in the short-term and, for the more conscientious young people amongst us, how we are going to attain the careers and lifestyles that we aspire to.

Now, liken this to setting up a new company.

You’ve just come up with a revolutionary accounting system that will completely eliminate the need for business owners or their accountants to complete accounts and returns manually. You’re not interested in where the company will be in 5-10 year’s time, you just want to get this new product patented and out to market as soon as possible before competitors develop their own systems.

But, like death, parting with your business is inevitable. It will happen eventually. And if you fail to prepare for this inevitability, you will suffer the consequences.

One dissimilarity in this analogy, however, is the persons that are affected by your actions.

If you fail to secure proper life insurance cover, and you pass away, your friends, family, and those that depend on you will suffer.

If you fail to plan your exit from your business properly, however, it’s you that will suffer. You will, most probably, receive a much lower price for your business and basically remove a huge chunk of value that you have spent all those years building up in the company.

So, the lesson is, try not to become too tied-up in the day-to-day operations of your company and don’t neglect long-term strategic planning. It might not appear to be too important during the early stages, but investing time in this activity during the start-up phase will pay dividends (literally!) when the time comes to sell your company.

And if you don’t have the time or patience to handle exit planning yourself? Outsource it to the professionals.

Arrange a no obligation chat with me, Bob Brown of Exit Success, to see what we can do for you and your business to ensure that you get the best deal possible when it’s time to exit.

Give me a call on 01709 810081 or email bb@easf.co.uk.