As a business owner, you will eventually leave your business. The exit path you follow, and the successor you choose, is critical in determining the quality of your life. A successful exit must meet both your financial objectives, as well as your value-based objectives.

There are four primary paths to transfer or sell ownership in a business. You can gift or transfer ownership to family members, sell to a partner or a key group of managers, create an employee stock ownership plan (ESOP), or sell to a strategic or financial third-party buyer. The most important consideration is to select a path that will generate enough income for you to live a comfortable lifestyle.

In addition to providing financial security, the path you choose should address your personal or value objectives. Ask yourself, how important it is to: stay involved in your business after giving up day-to-day management control; secure the future income of your employees and family members who are active in your business; and maintain the culture of your company and the preservation of your legacy. If these objectives are important to you, then evaluate both transfers to insiders, such as family members, partners, key managers and employees, as well as sales to third parties such as private equity groups, competitors, and suppliers.