Do you know the exit planning mistakes that rob you of your future wealth and happiness?You should.The reality is that most entrepreneurs don't even know that they are their own worst enemy.Entrepreneurs give their blood, sweat, and tears as a start-up. The irony is that right at the moment you should enjoy your sweet success, you give it away from lack of planning.Success in business and life is knowing both what to do, and knowing what not to do.I should know. I was the kid right out of school with no money, experience, or team.Despite the odds, I built a successful company and enjoyed a 9-figure exit.But it almost didn't happen.Why?Exit planning mistakes.I didn't know what I didn't know when it came to selling my company. It turns out the entrepreneurs around me didn't know either.I did know one thing: master the art of the sale, so that I could maximize my company value, wealth, and happiness.A total immersion began to master the art of the sale. I spoke with advisors, buyers, sellers, successful, and unsuccessful owners.What emerged were common exit planning mistakes made by most entrepreneurs. These exit planning mistakes rob entrepreneurs of their future wealth, happiness, and success.What are these exit planning mistakes and how can you avoid them?The only way you'll find out is to keep reading.
There is safety in numbers. - Euripides
Exit planning mistakes happen when you depend on too few people.Too few people?Yes, too few people to run your company and too few people and customers.Too many companies are dependent on the founder. There's an irony in this.When your company runs without you, you'll be rich and happier.Exit planning mistakes also happen when your company depends on too few customers.Why?Put yourself in the shoes of the buyer who minimizes risk at all costs.Euripides was on to something when he said there's safety in numbers.[tweet_box design="default" url="http://jef.tips/j13epm16" float="none"]Maximize company value when you increase the number of people who run it and customers you serve.[/tweet_box]Your future buyer agrees.And when it comes to the last word on your company's value, your future buyer wins. All day every day.Your future buyer wants to know that you have a competent team that runs your company without you.Having many customers ensures your company remains profitable should a few customers leave.Careless exit planning mistakes are easy to avoid.Ensure your company runs without you and isn't dependent on a few large customers.Your company is healthier and more profitable. As a result, your value increases (and so will your wealth).Do this now, and you'll thank me later.
Stupidity has a certain charm - ignorance does not - Frank Zappa
Careless exit planning mistakes occur when you don't understand what drives company value.Most entrepreneurs have no clue what adds value to their business. Talk about a waste of time, energy, and money on activities and areas that add no value.One entrepreneur I know loves to buy new equipment and experiment with it.Great for the entrepreneur who enjoys the process. Terrible for the business as the equipment isn't needed and adds no extra profit.Life's not perfect, and exit planning mistakes will happen.Not understanding what maximize company value shouldn't be an exit planning mistake.What can you do?For starters, find and hire an advisor who specializes in company valuations. Insist on having different methods used so you can understand the levers of value.The more you know, the more you'll profit.Once you know what adds value to your company, focus on these areas and activities.If you're putting in the time, money, and effort, you might as well maximize your value.If you don't, the future buyer will at your expense and their gain.Do you know one of the biggest and worst exit planning mistakes?Keep reading to find out.
Have the right people in the right places, working together - Roger Staubach
Exit planning mistakes happen.Nobody is perfect.Don't believe the myth of not needing advisors. It's rampant amongst entrepreneurs. The only upside is for the buyer who hopes you don't use advisors.Buyers hope you make mistakes, lots of them. From a buyer's perspective, the more mistakes you make the more money saved. At your expense!If you think that you neither want to spend the money nor the time with advisors, think again.Quick story.The first offer I received to buy my EdTech, Embanet, was 7-figures and based off 3 times EBITDA.I knew I could do better and said 'no' to the buyer.It was this experience that launched me on my quest to master the art of the sale. For my first offer, I didn't know what I was doing and had no advisors.Less than two years later I accepted a 9-figure offer based on 13 times EBITDA.Same company.What's the difference?I assembled my exit team to crush it on the sale.[tweet_box design="default" url="http://jef.tips/j13epm16" float="none"]Want to retire rich and happy? Surround yourself with the right advisors.[/tweet_box]Whatever fees I paid was a rounding error compared to the increase in value.Exit planning mistakes happen.Be smart. Get yourself advisors and reduce the number of exit planning mistakes you make.You'll be happier and richer.You can take that to the bank.
The difference between death and taxes is death doesn’t get worse every time Congress meets. - Will Rogers
Ignoring tax planning is one of those exit planning mistakes you'll live to regret. Forever.Love them or hate them, taxes are a part of life.The smart money is on putting plans and instruments in place to reduce taxes. At all costs.You've worked hard, taken risks, and put everything on the line.You've prepared for either your exit or the sale of your company.Congratulations!Now do the smart thing and ensure you've planned for taxes.The name of the game is to keep as much money as possible after your exit.Most entrepreneurs wait until the last minute, aka the day before the sale, for tax planning.Do this, and it's too late.To take full advantage of tax savings often requires years of planning.Whatever you're doing stop and re-read that last sentence.Let your exit planning mistakes be small ones.Not doing your tax planning will cost you more than you can ever imagine. Until it's too late.Now that we have tax planning out of the way, do you know the only question you should ask before you do your exit?This one question is a life changer.Want to know what this question is? Keep reading.
A prudent question is one-half of wisdom - Francis Bacon
Entrepreneurs often make exit planning mistakes because they only focus on the money.While money can be important, there's more to life than money.Do you know the only question you should ask BEFORE you exit?Ready?The question is:"Now what?"Don't let the simplicity of this question fool you.You launched your business to solve a problem you're passionate to solve.Good on you.If you're like most entrepreneurs, you are your business, and your business is you.Chances are your company culture is what it is because of you and your quirks.But in the blink of an eye, you're no longer part of your company once you exit.What are you going to do?If you come up blank on this question, let me assure you that money is not the answer.What will you do after you buy your toys, travel the world, and get bored of chilling out on the beach?This is one of the few areas where advisors cannot help you.Only you can figure out what the next chapter of your life will look like.After you answer the "now what" question you'' either want to sell or not sell your business.Regardless of what you decide, I have great news.Preparing your company for sale minimizes exit planning mistakes and drives higher profits.When you're prepared, you have the luxury to decide when you sell your company, or not. You win. All day. Every day.
Exit planning mistakes rob you of your future wealth and happiness.Most entrepreneurs realize their exit planning mistakes when it's too late, if at all.Be the smart entrepreneur I know you are and avoid exit planning mistakes at all costs.I've shared my in-the-trenches strategies for avoiding common exit planning mistakes.I should know. These are the very strategies I leveraged for my 9-figure exit.If I can do it, so can you.Remember, I was the kid right out of school with no money, experience, or team.Whether you're running an established company, or not, the best time to plan your exit is today.Where do you start and what do you do, you ask?Start with my first strategy and stay with it until you master it. When you're ready, move on to the next strategy.In short order, you've created your exit plan to avoid many exit planning mistakes.Make it a ritual to review your exit plan at least once a year. As your life circumstances and business change, so will your exit plan.And this is a great thing.Know this and know this well.When you avoid exit planning mistakes you unlock your future wealth and happiness.You can do it. I know you can.Here's to you and your sweet success!Your Biggest Raving Fan,Jeffrey Feldberg