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Exit planning essentials: A blueprint & a general contractor

Exit planning can be intimidating, which is why it is important to plan ahead. Learn more about the two most essential parts of reaching your exit goals.

All business owners must exit their business at some point, but not all owners exit on their own terms for the amount they want. Too often, business owners delay working towards their exit because they don’t know where to start and don’t know what options they have. Creating and executing an exit plan is often the missing piece. Exit planning is more than just "succession planning," it is the holistic approach to designing a business-exit strategy that provides a business owner maximum value for their life’s work.

To reach a business owner’s exit goals, two essential parts are a blueprint and a general contractor.

The blueprint

When setting out to build your dream house, no one would go out and hire a contractor to pour the basement; they start by designing the house to include the features they want. Then the contractor creates plans to build that house, step by step.

However, many owners don’t think this way when exiting from their business. They jump straight to one advisor (usually their CPA or attorney) to build one piece of the “exit” without thinking about how it fits into the bigger picture. This leads to single-dimensional plans that may maximize tax savings, for instance, but leave many unsatisfied aspects of their exit in places they need it most.

An overarching master plan for the exit is necessary and must include:

  • The Current State: An understanding of the resources available (business, personal, and otherwise)
  • The Desired End State: Specific goals the owner wishes to reach (financial, personal, family, community, etc.)
  • The Gap: Identified gaps or opportunities between where the owner is today and where they want to be
  • The Plan: A phased plan to reach the owner’s goals involving a variety of advisors

This blueprint is best put together by the second essential part of a business exit...

The design-build contractor

Any business owner’s exit requires advisors from various disciplines (attorney, CPA, financial advisor, etc.). Still, each advisor generally focuses on their specialty, and they often work in a “silo,” not coordinating with each other. This leaves the owner as the middleman and no one looking at the whole picture. An architect and a general contractor for the exit process are needed. An Exit Planning Advisor fills both roles.

The Exit Planning Advisor acts as the design-build general contractor of the process: gathering information, creating a plan, and coordinating the team of advisors. The Exit Planning Advisor can do this because they know the basics of every aspect of the exit process, understand the owner’s goals, and see the whole situation. They also understand the variety of exit options available (sale to family, key employees, 3rd party, ESOP, etc.) and the variety of mechanisms available. So they can craft a plan, in collaboration with the other advisors, that meets the owner’s goals without adding unnecessary things.

In summary

Just like you would not rely on a plumber to build the entire house, business owners cannot rely on one or two advisors to craft and execute the plan. A seasoned professional with the experience to guide the owner and advisors through the plan is critical to ensure a smooth and successful transition.

In the end, you only have one shot at your exit. Build it wisely. If you have any questions about your exit planning strategy or process, please contact Daniel White using the information below.

Daniel White

Vice President
Org. Development & Family Business Services

Daniel White assists organizations with their organizational development needs, including strategic and operational planning, leadership development, succession and exit planning, and family business advising. He has worked with a wide range of industries, including construction, healthcare, manufacturing, banking, not-for-profits, and government organizations. He has also worked internationally as an organizational development consultant, serving organizations in Bolivia, Guatemala and Ghana. Prior to advising organizations, he worked in not-for-profit leadership and operations, directing projects with clients such as the US Department of State and the United Nations Population Fund.

Daniel serves as associate director of the Kansas Family Business Forum, hosted by Wichita State University’s Center for Entrepreneurship. He holds a certificate in Family Business Advising from The Family Firm Institute. Daniel also earned his Certified Exit Planner designation from BEI. This designation demonstrates he is qualified to provide comprehensive, professionally executed exit planning services. He has been published in Fast Company and several academic journals, and he has presented at a number of national conferences.

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