Do I Need a Certified Exit Planning Consultant?

Every business owner needs specialized, strategic planning to prepare for the eventual transfer of their biggest asset—their business. Without proper knowledge of the exit planning process, organizational structure, and business goals, exit planning is a mammoth, complicated task destined to yield a disappointing outcome.

Certified exit planning consultants bring much-needed expertise and objectivity by providing an unbiased perspective to the whole planning process. There is no “one size fits all” approach to exit planning and no do-overs: you have to get it right the first time, which means you need to know the consultant you hire has the necessary competence. Certification testifies to that competence. This is why you need certified, experienced consultants to implement the necessary strategies and systems into your day-to-day business activities.

Although many business owners are skeptical about bringing in an outside exit planning consultant, the benefit of having trained personnel on your team outweighs the drawbacks of trying to do everything yourself. Draw upon a certified exit planning consultant’s knowledge, capability, and strategic perspective to have a game-changing impact on your business exit process. You can save time, resources, and money by hiring a skilled consultant to evaluate business operations and free yourself to take care of other business activities that need your undivided attention.

What Is a Certified Exit Planning Advisor?

A certified exit planning advisor (CEPA) is a trained, experienced professional who assists business owners in planning and executing their business exit. In addition, they help business owners understand the exit alternatives available to them.

They prioritize understanding what the business owners want to achieve financially for themselves and their businesses. This personal and business insight enables a comprehensive evaluation of the owner’s end objectives and helps develop a strategy that suits the owner’s exit timeline and lifestyle choices.

A certified exit planner essentially makes two strategic plans:

Plan 1: The Owner’s Plan. This plan defines what the business owner wants to achieve with their exit. This may include aspects like how much cash to reap from the business, what will the cash flow during retirement will be, how to transition into their new role, whether they pass the company to family members or elevate their children to C-suite roles, whether they want to be a board member in the future, and deciding if they want to sell the business outright.

Plan 2: The Business Growth Plan. Once the business owner’s strategic plan is prepared, the next step is to prepare the strategic growth plan for the business. These strategies focus on achieving as many of the owner’s end objectives as possible within the allotted time and resources. The plan focuses on maximizing the enterprise value of the business.

The planning process is both emotional and complex. It needs foresight and proper execution. An exit planning professional ensures everything goes as per the plan and smoothly.

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What Does an Exit Planning Advisor Do?

Armed with the roadmap of the exit planning process, the exit planning advisor helps the business owner through their unique exit. They guide their client through business best practices and help them make the right choices for themselves and their business. Of course, they also make sure everything goes through legally.

The key to this process is conducting a gap analysis of the business. They do this by comparing the business owner’s current resources to the resources needed to exit on their desired terms. The analysis helps determine if the owner’s desired exit date is realistic and what needs to be done before that.

Exit planning consultants collaborate with other advisors to maximize the efficiency of the exit plan. The end objective is to create a consolidated master plan comprising of:

  • Maximizing the business value
  • Helping with the owner’s financial planning
  • Helping plan the owner’s life after their business exit.

They act as project managers. Once the preliminary exit plan is ready, the advisor and the business owner review the plan to weed out nonessential aspects. Next, they revise the plan based on the owner’s feedback. Once the plan is finalized, a schedule with action items and benchmarks is created to guide activities toward the completion date. The responsibility then falls to the advisor to complete the given recommendations by the deadline.

The exit planner acts as a critical communication link between:

  • The business owner and the exit planner,
  • The advisory team and the exit planner, and
  • The exit planner and the management team

The exit planner ensures that all the exit-related tasks and updates are known to all involved parties, thereby reducing the possibility of miscommunication and mismanagement of the exit process.

Related: Advisor’s role in an exit strategy. 

Do I Need a CEPA to Sell My Business?

Yes, a CEPA’s expertise ensures all the essential aspects of exit planning, its implementation, and exit transition are considered. A CEPA will:

  • Lead the execution of the exit plan. They bring order and give a strategic direction to the exit planning process. They also access and identify growth and equity drivers in the business and help the owner leave their business positively.
  • Connect with people. They help build a robust referral network of other advisors and moderate interaction between advisors and business owners. They also create solid personal financial strategies and plans for their clients.
  • Facilitate communication. They communicate openly with the business owner to understand what the owner wants. These profound conversations with the business owner help cultivate deep relationships.
  • Impart accurate Insight. Their vast experience and knowledge of proven value creation strategies enable them to anticipate and understand the business owner’s needs now and in the future.

Other advantages of having a CEPA by your side include:

  • Identifying value gaps and obstacles in business transferability. This is the key starting point of the exit planning process.
  • Helping the owner establish their priorities, value creation strategies, and the timeline of their exit goals.
  • Helping to make the business an attractive proposition for the buyers.
  • Helping, with consistent value creation efforts, to increase the value for all shareholders.
  • Ensuring a smooth management transition.
  • Prevent costly mistakes by being vigilant and proactive.

Certification Matters

The exit planning process is designed to build, harvest, and preserve business value by integrating best-in-class business practices into the day-to-day business operation. So, whether you intend to sell the business to a third party, keep the business in the family, or transfer it to your employees, it is ideal to have a certified expert by your side to ensure a smooth business exit.

Author Summary:
Dan Doran

Dan Doran

Is the Founder of Value Scout, Quantive and the 2019 Exit Planner of the Year. He is a recognized expert and speaks frequently about M&A, valuations, and developing more deliberate value creation strategies.

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