Moving out from a business is a daunting task for almost all businessmen worldwide. To take such major decisions, there needs to be some planning which needs to be done beforehand. Exit and succession planning strategies is one such controlled process which would help to decide when and on what grounds you should move out of the business. Exit and succession planning strategies would prove to be beneficial for your team as they would not have to face any problem during the transition period and also for your tax calculations, which in turn would help you plan efficiently for your future income.
Many people look for guidance during this period. This is where exit planning comes to their recourse which helps them to take the right decision to get the best results. Based on the complex nature and payoff of your trade, there are several options which are available, some of which include management buyout, employee share scheme and selling to competitors and customers.
Things to remember while planning your exit
Save your hard work from getting wasted: Exit planning saves your hard work from getting wasted completed. All Important aspects of your business are mapped out which would give you the best outcome when you exit. The most important thing to be planned is who would take over your business after your exit. Such planning comes under succession planning.
Utilize the situation best to your advantage: A smart businessman can take complete advantage of this situation when he can plan to minimize taxes as well as think about the benefits of his employees. This would also help you to acquire higher selling price for thereby reducing your tax expenses on the proceeds. During such occasions, it is advised to adopt tax saving techniques like staged payments and superannuation contributions which would help you retain the maximum amount of your proceeds.
Take note of important taxes to be paid during exit: While planning your exit, capital gains tax should be kept in mind. This tax is incurred on the gains one would acquire when he or she decides to dispose of his or her assets. This type of tax matters a lot during exit planning as one would have to bear the brunt of paying a large bill if it has not been planned well in advance.
Take professional help: During proper planning, all the taxation issues are foreseen well in advance, so one gets a lot of time to reduce all his liabilities. Professional help can also be taken to identify if anyone is eligible for capital gain tax concessions. Help is also given for all matters related to GST and superannuation implications.
Finalize the best time to move out: One does not actually get time to plan for his future while running a business. Thus, it is always advisable to take professional help so that you can take the right decision at the correct time. Five years’ time to extract all the gains from a business is a good enough time according to professional planners.
Leaving a business is sensible only when you know that it has paid you well. Thus, it is always best to plan all your actions beforehand to get the maximum gains from it.