Exit Planning

Exit planning encompasses all aspects of the process of exiting a privately held business. It entails evaluating the financial, legal, and tax implications of quitting an organisation. Exit planning aims to maximise the value of the business at the time of exit, to meet the personal and business objectives of the exiting party, and to reduce tax burdens.

When it comes to leaving a firm, exit planning provides the assurance that everything has been taken care of. Poor exit planning can have a negative impact on the firm’s and individual’s success both during and after the exit.

When an exit strategy is effectively thought out and executed, it enables the exiting party to:

• Reduce or delay the overall tax liability;
• Maximize the valuation and cash amounts received at closing;
• Facilitate smooth operational and management transfers;
• and Control the time and terms of their exit.

Poor exit preparation is frequently identified as a significant factor in disastrous corporate divestitures.

Related Phrases

Cite Term

Definition Sources