Why Your Business Transition Needs Professional Guidance

You know it’s time to consider exiting your business… but wait! Are you sure you can handle that mammoth task by yourself? Are you sure you don’t need professional assistance to guide you through the exit planning process? You might think that your business exit will be a cakewalk but trust us: it’s not.

Multiple responsibilities and business commitments often put business owners in the difficult situation of managing their personal, business, and exit planning responsibilities. There is simply too much to do, and not all business owners are equipped to handle all of it independently. According to Exit Planning Institute, 80 percent of business owners’ wealth is tied up in their businesses. To harvest that wealth, owners must plan their business exit carefully or risk never living out retirement as they envisioned.

The ideal solution is to engage a professional exit planner and an advisory team to handle all business aspects in such a scenario.

What Does a Professional Exit Planner Do?

A professional exit planning advisor will help you through the entire exit planning process. This qualified professional is primarily responsible for leading and coordinating the whole process from data collection, data analysis, and designing the strategic value enhancement processes to implementation.

Since their primary responsibility is to ensure the owner’s future financial security, they work diligently to remove and handle roadblocks, if any.

Their primary responsibilities are:

  • Talking to the business owner to understand their future needs and goals and educate them about their active role in the business exit process.
  • Facilitating the exit process is a critical link between their own advisory team, the owner’s internal business advisors, and the management team.
  • Facilitating the owner’s transition from the business after their exit.

No two exit plans are the same because no two businesses are alike. Moreover, the conditions surrounding businesses—even from the same industry—always differ. An exit planning advisor knows and understands this; thus, a good advisor presents more than one exit plan option to the business owner. They will also keep the business owner’s personal and financial goals at the forefront. Because there is no one-size-fits-all approach in exit planning, an advisor designs a comprehensive exit strategy tailored to meet the business owner’s specific needs.

A good exit plan fulfills an owner’s business, financial, and personal needs. Unfortunately, very few advisors spend sufficient time with the business owner to understand their unique needs. Therefore, an exit plan that skims past the owner’s personal goals is not a good plan. Good advisors know this and work diligently toward growing the company’s value and helping the owner fulfill their valuable personal goals.

An advisor should also present more than one exit option to the business owner; failing to do so can considerably diminish the company’s value. A qualified advisor will have all the training necessary for the eight internal and external exit options. They should discuss all the options with the owner to decide what best suits the owner and their company.

What Makes a Professional Exit Planner?

A Certified Exit Planning Advisor has advanced education in specific business areas and practices and formal exit planning and strategy training. Formal training equips the advisor with the essential know-how of the entire exit planning process and helps them build a valuable business enterprise. They are also required to provide helpful insights about the need to align business growth and value goals with the client’s personal retirement goals. Exit planning certification helps advisors have more holistic conversations with business owners.

To be certified as a CEPA, a candidate must possess the following:

  • A minimum experience of five years working full-time directly with business owners. A CEPA can be a professional from other industries, like insurance, banking, finance and accounting, law, and estate planning.
  • An undergraduate degree from an accredited academic institution. If the candidate does not possess a degree, they must submit two years’ work experience.
  • Active membership with the Exit Planning Institute.

A CEPA knows how to align and blend exit strategy into the business, so they might be more inclined to optimize the business process and operations. A CEPA works best with a team, such as a financial advisor who will help determine your product’s optimal sale price. This results in higher net profits that ultimately contribute to the business’s growth goals, meeting the owner’s cash and legacy goals.

How Will a CEPA Benefit You?

A qualified advisor knows how to blend exit strategy into all aspects of the business, enabling them to fulfill many of the owner’s personal and financial goals. To do this, they use a proprietary framework designed by EPI, value acceleration methodology, to align the three major exit planning components.

  • Maximizing business value,
  • Owner’s financial planning, and
  • Retirement planning.

Through this framework, the advisors skillfully educate the business owner on building and preserving wealth by implementing best business practices into processes and operations.

In addition, they help:

  • By being there for the business owner throughout the business exit process.
  • To keep the business owner from making errors in judgment.
  • To successfully guide the business owner through roadblocks.
  • By acting as a critical link between the owner’s advisory team and the exit planning team.
  • To frequently assess progress against goals and have regular conversations with the owner about their goals and end objectives.
  • By providing the best services via multiple marketing and business development tools.

To help you, an exit planning advisor:

  • Is trained to create the most suitable exit strategy for your business.
  • Will conduct a business valuation to identify the value gap between the existing value of your business and its desired future value.
  • Keep you focused throughout the process because trying to sell the business while keeping it running can be taxing.
  • Will help you identify the right buyer for your business.

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Matt Lawver

Matt Lawver

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