Every small and mid-sized business owner needs to eventually consider what comes next, whether that is retirement or moving on to a new business. In the death care industry, this is no different. When you’ve worked hard to build a successful business, how can you ensure that you will be able to reap the benefits of that work? Here is what you should know about planning an exit strategy for your funeral home.
The Problem With Exit Planning
Most business owners are working so hard that they forget to take the time to sit down and plan for the future. One survey completed by the National Funeral Directors Association found that over 50% of funeral industry business owners are over 55 and many of them are hoping to retire in the next five years. Despite that reality, many owners do not have an exit strategy in place. Taking time to plan an exit strategy for your funeral home will make sure that you are prepared for what comes next, whether you would like to transfer the business to a child or sell it to a third party.
What to Consider When Planning an Exit Strategy for Your Funeral Home
Everyone should plan an exit strategy for their death care industry business, and there are many different things that need to be decided during that process, including:
- How much is your business worth? Keep in mind that your business is worth one amount and the property that your business is on might be worth another, and they don’t necessarily have to be sold together.
- Do you have a buyer or successor in mind as part of your exit strategy for your funeral home? This could be an employee who has been loyal for decades and is interested in taking over or a child who wants to stay in the family business.
- Are there legal documents in place outlining these things already in the event something happens to you?
- What amount will you get after the taxes you will pay on the sale of the business? Tax planning with your accountant can help to plan for this and limit your liability. Tax planning can also be done to increase the value of your business between now and when you sell it?
- What will you need your income to be after the sale in order to make sure that you can maintain a comfortable standard of living?
- What rate of return are you anticipating?
Our accounting team can help guide you through all of these questions and their answers.
Financial Planning for Every Death Care Services Industry Business from MKS&H
MKS&H provides tax and accounting services to businesses of every size and in every industry, including the death care industry. Our team can help your business gain confidence in your important accounting reports and make better, more educated financial decisions. Contact us today for a consultation.
About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture and your business goals. This approach enables our clients to achieve their greatest potential.