Entrepreneurs often become so immersed in their businesses that they overlook crucial aspects of exit planning – such as wealth management, tax planning, philanthropy, and estate planning – leading to a situation where, by the time they start their exit journey, it may already be too late to fully leverage some of these opportunities. When planning your exit, you should consider the amount of lead time you allow yourself – having at least two years before selling is crucial to ensure you have enough time to get your business and personal affairs in order. Failing to do so can have consequences, limiting the options available to you.
Table of Contents
Start Estate Planning Early On
Planning Sets You Up for Life Post-Exit
Transition from Success to Significance
Get Expert Advice from Fellow Entrepreneurs
Start Estate Planning Early On
Strategic anticipation is crucial when it comes to Estate Planning. It is essential to initiate the process by consulting with an experienced Estate Planning attorney. Such a professional can not only uncover the diverse options available in your state but also comprehend your objectives, steering you towards the most effective strategies. Whether it involves establishing a trust, or multiple trusts, such as the widely used Spousal Lifetime Access Trust (SLAT), each decision should be tailored to your unique circumstances. Notably, the landscape of available options can shift dramatically once you divest ownership of your company. Therefore, proactive contemplation and dialogue with experienced professionals becomes crucial at an early stage. Many alternatives that exist while you retain ownership may become inaccessible after selling your company.
Recognizing this, it becomes imperative to delve into these considerations early on, engaging with professionals who possess the expertise to navigate such complexities. STS Capital stands as a valuable resource, offering insights that guide business owners in maximizing their exit value. Concurrently, a business coach adds the necessary accountability to effectively implement these strategic plans. This proactive approach ensures a well-thought-out and comprehensive estate planning process, aligning with your specific needs and goals.
On the financial side, early estate planning involves more than just calculating the sale proceeds. For example, if you are planning on fully exiting your company and no longer being on the company’s payroll, you will need to work closely with your wealth manager to determine how much investable assets you will need to meet your income requirements. Additionally, your investment banker and tax attorney can help you to understand what your net proceeds will be once you have split any proceeds with your partner(s) or investors, paid fees (for legal, accounting, i-bank, etc.), and paid state and federal taxes. Working with experts who can navigate complex tax implications and legal considerations is an integral part of this preparation. Lastly, understanding future purposes and aligning financial plans accordingly is crucial for a fulfilling post-exit life, as highlighted in the 3 Significance Principles by Managing Director Chris Clements. This comprehensive approach ensures that the financial aspect of your transition is in harmony with your long-term goals and aspirations.
Planning Sets You Up for Life Post-Exit
STS Capital is a unique player in the M&A industry as it takes a personalized approach to exit planning that is based on the entrepreneurial journeys of its managing directors. Managing Director Tom Turner, who, after successfully exiting his business, transitioned to a Managing Director role at STS to help other entrepreneurs achieve Extraordinary Exits. He represents the firm’s commitment to understanding and addressing the complex needs of business owners during and after the exit process. With this first-hand experience, STS has gained unique insights into the emotional and strategic complexities of transitioning from active business management to a new chapter in life.
STS’s involvement in exit planning goes beyond financial gains. We focus on a holistic and strategic transition that includes wealth management, philanthropy, and personal development, achieved through Success to Significance by Selling to Strategics. Our goal is to ensure that entrepreneurs are not only financially sound but also emotionally and personally prepared for life after the exit, alongside a network of strategic partners to help facilitate a seamless transition experience. STS has a proactive strategy that involves integrating strategic planning and process development into the exit plan right from the start. This ensures that every aspect of the entrepreneur’s future, from wealth management to personal pursuits, is thoughtfully aligned and ready to support the business owner’s new journey.
Transition from Success to Significance
The journey from Success to Significance is a crucial aspect of post-exit life for entrepreneurs. This phase is about leveraging the wealth and experience gained from business owners to make a meaningful impact. For many, this transition involves a shift towards philanthropy and social contributions. STS guides entrepreneurs in exploring ways to utilize their financial success for greater societal good. This includes the strategic use of tools like Donor Advised Funds (DAF), which not only serve as efficient tax planning mechanisms but also as platforms for charitable giving. In the U.S., DAFs are particularly popular for their flexibility and alignment with personal philanthropic goals.
A business coach, in tandem with an M&A firm, plays a vital role in this transition. They can help entrepreneurs identify and pursue opportunities to reinvest their proceeds in ways that resonate with their values and passions. This stage is not just about financial transactions; it’s about creating a legacy and finding a new purpose in life that transcends the business world. The shift from Success to Significance is a journey of redefining one’s identity and impact, turning business achievements into channels for positive social and personal transformation.
Get Expert Advice from Fellow Entrepreneurs
The valuable insights and firsthand experiences of STS Capital’s managing directors, especially those like Tom Turner, are instrumental in guiding entrepreneurs through their business exits. Turner, now a Managing Director at STS, reflects on his own journey: “Before joining STS Capital as a Managing Director, I was an owner preparing for my business exit. My experience working with a business coach was pivotal. Their guidance, coupled with the strategic insights and planning from STS, helped me navigate my business exit with a clear vision and structured approach. This partnership provided a balanced perspective, blending the meticulous planning required for a successful exit with the preparation for life beyond it. Additionally, being able to donate through the DAF allowed for me to kick start on my philanthropic goals and building my legacy.”
This collaboration between STS Capital and business coaches demonstrates the power of combining expert M&A guidance with structured coaching to ensure a comprehensive and fulfilling exit experience for entrepreneurs.
