Why Hire an Exit Planner?
Updated: Dec 3, 2020
Many business owners love to roll up their sleeves and get their hands dirty. They are doers. That is what led them to start their business and what drove their success. This determination, innovation, and grit is truly admirable. Most owners also know the importance of delegation, and the value of experts. This is especially true when it comes to complex processes with many factors to consider. One such process is exit planning (or succession planning). This is a complicated process that requires the expertise of multiple disciplines and often balances varying interests between multiple interrelated parties. Because of these complexities, many owners engage a professional Exit Planner to help them through the process. There are many reasons to hire a professional exit planner.
You Can Benefit from the Exit Planner’s Experience
Most owners will only sell one business in their lifetime. For almost of these owners, it is the single largest transaction of their lives. They have one shot to achieve the best outcome, and to secure their financial future, yet they have never done it before. This is a daunting task, but it does not have to be this way. Owners who hire an exit planner can benefit from their experience helping numerous business owners plan for and execute their succession and exit plans. They have planned through multiple exit strategies. They know the common pitfalls and how to avoid them. They also know what reasonable offers and terms are and have helped owners negotiate fair sales in the past.
An Exit Planner Will Keep You on Track
Anyone who has ever owned a business knows that no matter how much is on your to-do list more urgent tasks always seems to pop up. Plans you had for this week invariably end up sliding until next week, and then the week after, and so on. An exit planner help keeps you on track, creating deadlines and milestones and helping you stick to them. Just as a personal trainer helps you reach your fitness milestones; an exit planner helps you hit your exit plan milestones. They hold you accountable to yourself. Furthermore, a professional exit planner is able to do much of the work freeing you up to focus on what you love, your business.
Exit Planners are Specialists
Effective and comprehensive exit planning is a complex, multi-disciplined exercise. There are numerous tax laws, estate planning laws, and contract laws that must be abided by, coupled with the varied and often conflicting interests of the owner(s), the business itself, the employees, etc. It also requires a knowledge of financial planning, corporate finance, commercial banking, strategic planning, and many other disciplines. Exit planners are specialists in how these all interact when planning a business exit and work collaboratively with your current advisors, you, and your management team to navigate these complexities.
Exit Planners are an Independent Third Party
Sometimes the discussions related to your exit are difficult. Working through plans for selling the business or to retire from it with partners, managers, and even family members can be stressful. Emotions can and often do run high. Individual goals can be incompatible and inevitably lead to conflict. During these tense discussions it can be invaluable to have an independent third party in the room. Someone who does not have a horse in the race whose goal is to achieve the optimal balance between all parties while maintaining the overall goals of the business. An exit planner is perfectly situated to fill this role.
As we said before, effective exit planning is a complicated process that requires the expertise of multiple disciplines and often balances varying interests between multiple interrelated parties. There are many nuances and common pitfalls throughout the process. Any business broker can tell you that many business sales fail. Engaging a professional exit planner can greatly increase the success of your business transition. This is likely the largest sale of your life. Make sure you sell it right.
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