Finding the exit

摘要

Clients who own a business, at some point, must think beyond their lifetime or at least their desire to work. For many, that eventually concludes with the sale of the business. Whether the sale is to a family member, employee or a third party, many financial planning opportunities need to be evaluated well in advance of that ultimate sale.The opening conversation should be about when your client would like to exit the business. Many have a hard time articulating the "when" because they probably do enjoy how they spend their time in the business. Most CPAs and accountants will end the conversation as soon as the client indicates that they do not know when they would like to sell. But the accountant who really cares about the client will at least ask the client to choose a hypothetical jumping-off point so the planning can begin. The timing of when to sell is an important detail in the forecasting and planning for the client. The ideal situation is having a client who exits on their own terms, not because they have to. The purpose of the initial number-crunching exercise is to help figure out how much the client needs to net to remain financially independent for life, as well as to fulfill any other financial objectives they may have. To do this, you will need to have a decent idea of what the value of the business is at the time of engagement. Of course, a full valuation is recommended, but many clients balk at forking out that kind of money when they don't know when they may exit. At this point, you may ask the client what they think the business is worth and what valuation they'd like to use for the forecasts. Hopefully, they've paid attention to industry activity and have some comparable sale information inside their head. If not, pick a low number to be conservative, and let the forecasting begin.