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What is an Exit Plan


Exit Planning is an integrated multi-disciplinary approach designed to help business owners address all of the business, personal, legal, financial, estate and tax issues involved in exiting a privately owned business.


Why Plan?


You are human – you will exit your business sooner or later.

You face issues you can’t control


                        Changing motivation




“A goal without a plan is just a wish.”

Antoine de Saint-Exupery (1900 - 1944)


Why business owners don’t plan:

  • Do not know where to begin

  • May have difficulty discussing financial matters and personal goals

  • Spend time “putting out fires”

  • The process seems too daunting

  • Don’t understand the benefits


Benefits of Exit Planning to you.

  • Lowers business risks

  • Avoids asset concentration

  • Maximizes the value of the company at time of exit

  • Avoids over or under valuing of the company

  • Preserves family wealth for later generations

  • Lowers or eliminates income, capital gains or estate  taxes

  • Provides strategic options

  • Creates peace of mind


According to PriceWaterhouseCoopers in their “Whose Business Is It Anyway”, 75% of business owners regret selling their business 12 months after closing.  Why?  They failed to line up 3 key issues:


1.      Personal Goals
2.      Business Situation
3.      Market Situation


1.  Personal Goals
  • Typical Personal Goals:

  • Create a family legacy?

  • Reward top employees?

  • Maintain community presence?

  • Stay involved in the business?

  • Benefit charitable interests?

  • Fund retirement lifestyle?

  • Reduce stress?


2.  Business Goals:

A.  Understand what you have.

  • Business Valuation

  • Fair Market Value

  • Market Value

  • Investment Value

  • Liquidation Value


B.  Enhance what you have.

  • Increase profitability

  • Reduce customer concentration

  • Groom management successor

  • Increase revenues

  • Expand market share

  • Reduce cyclicality

  • Enhancing employee loyalty and effectiveness


3.  Market Situation
  • How hot is the M&A market?

  • Is third party financing available?

  • How is the economy doing?

  • What are tax rates?

  • What is the forecast for the future?


Exit Options

  • Transfer to family member

  • Sell to shareholders

  • Sell to management

  • Sell to employees (ESOP, etc.)

  • Sell to third party

  • Donate to charity

  • Refinance or recapitalize

  • Go public

  • Liquidate the business

            SBA says that 80% of small businesses exit through liquidation.  Is this what you want?
The Exit Planning process is a multi-disciplinary team approach, with the following involved in the process:
  • M&A Advisor

  • Financial Advisor

  • CPA or Tax advisor

  • Legal Advisor

  • Estate Planner

  • Wealth Planner


The Exit Planning Advisor acts as the quarterback of the team, helping the owner determine objectives and developing the overall plan and coordinating the other specific functional planning aspects like tax, financial, etc.


Timing & Process

All business should have good strategic and tactical plans including a plan for the owner’s eventual exit.  To get the best result a good exit plan should have a 2 to 5 year time horizon.


What is the process?

Generally it takes about 6 months to develop a comprehensive exit plan.  The implementation of the plan takes from a year to several years.   The process is:


  • You complete a comprehensive questionnaire.

  • We collect at least 3 years of detailed business financial information.

  • We meet to discuss the issues identified in the questionnaire.

  • We do our research and financial analysis.

  • We present a finished detailed exit plan to you in person and answer any questions you have.

  • After the development of the plan, we can assist you in the implementation of the plan.


A typical plan includes:
  • Market-based business valuation

  • Client goals statement & analysis

  • Value enhancement recommendations

  • Exit options analysis & recommendation

  • Personal action plan

  • Business action plan

  • Contingency plan

  • Much more


Who should be involved in the Exit Plan”
  • Business owners

  • Spouses or significant others

  • Children & grandchildren

  • In-laws

  • Key employees


Any one the business owner feels will add value to the planning process.


Criteria for Exit Planning goals
  • Specific

  • Optimistic

  • Realistic

  • Short & long term

  • Measureable

  • Lifestyle-based

  • Consistent

  • Honest


Satisfaction depends on:
  • Personal identity

  • Marital status

  • Financial resources

  • Involuntary vs. Voluntary transition

  • Contact with others

  • Having a good plan and implementing it



Contact us to discuss how an Exit Plan can help.
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