The decision to exit the market is never easy, especially for family-owned businesses that have been built on years of hard work, dedication, and tradition. In 2025, as you consider planning for your future when so much of your wealth is invested in your company, there are various factors to consider. It depends on various factors such as what you anticipate as the future of your company, prospects for an exit, if you have invested in technology, the impact of the administration change on your business, and the need for financing, especially when interest rates are high.
When assessing the future prospects of your company is crucial, it is important to consider the economy and market trends and how they align with your business model. Are there growth opportunities or is the market becoming increasingly competitive. It is important to speak with your trusted advisors to weigh your options, be realistic about the future prospects of your company and appropriately assess the market opportunities.
As it relates to an investment in technology, it is important to analyze the return on your investment. With the introduction of AI and generative data, technology can have an exponential return. Yet, the risk with technology is how can you invest in technology and ensure your returns are commensurate with the investment. It is important to
Changes in administration can bring new regulations, tax policies, and economic strategies that will impact your business. Not only is it important to stay informed about such changes but understand the changes and challenges that come with an administration change and how they may impact your operations and profitability. As an example, in December 2017, Trump signed into law the 2017 Tax Cuts and Jobs Act, which was a major tax overhaul that cut taxes for individuals and businesses with many of the reforms expected to expire in 2025. With his recent election, there are expected to be changes with increased tariffs, lower Federal taxes, and increased immigration regulations as well as an extension of the 2017 Tax Cuts and Jobs Act.
With the high interest rates, financing is more expensive, which impacts cash flow and additional investments in the business. In addition, it impacts the cost of acquiring businesses and thus, buyers are spending more time on due diligence.
For many business owners, they do not plan for the sale of their business as they feel that they are never ready. If so, then, these owners will not be able to appropriately plan and maximize an exit to fund their retirement. With careful planning, discussion with your trusted business advisors, and a consideration of the changes that will be happening in 2025, you can set yourself on a path to financial freedom.
