In recent articles, we’ve sat in on meetings with an Exit Planning Advisor, Giselle, and her clients, the Drakes. We’ve seen how the first two Steps of The BEI Seven Step Exit Planning Process™ play out in the real world.
As a quick review, the first two Steps are (1) understanding and quantifying an owner’s exit goals and aspirations, and (2) accurately valuing an owner’s personal and business resources, which are the foundations for assessing any gap between the owner’s current assets and the assets the owner will need to live the post-exit lifestyle he or she desires.
While these two Steps are a necessary part of the Exit Planning Process, they tend toward fact finding rather than planning. In this article, we turn to planning, specifically, the advisor’s role in managing the planning part of the Process.
This planning is required to fulfill the next Steps of the Process:
- Build and preserve value.
- Sell the business to a third party, or transfer ownership to insiders (family or management).
- Ensure business continuity.
- Coordinate personal wealth and estate planning.
Giselle & the Drakes
When we last left Giselle, she had recruited a business appraiser and financial planner for the Drakes, with their approval. Those advisors determined that the Drakes would have to double the value of their business and financial resources in five years if they were to exit with the money they would need to live the post-exit life they desired.
Giselle’s professional training and experience had not prepared her to help the Drakes grow business value, much less undertake all the planning steps listed above. In that, she was like many advisors: They don’t consider becoming Exit Planners because they don’t know how to do everything involved in a comprehensive Exit Plan. As professionals, we generally don’t provide advice without the requisite knowledge and experience, and with Exit Planning, we don’t need to do it alone.
Exit Planning’s Greatest Weapons
Giselle was not willing to give up on Exit Planning just because she couldn’t be an expert in every facet. Instead, she attended a BEI Boot Camp and added Exit Planning to her arsenal. She learned that she could lead the Exit Planning Process without specific expertise in every planning step.
BEI Membership gave Giselle several new tools:
- The incentive and ability to create a group of expert advisors that had the collective experience and knowledge necessary to design and execute an Exit Plan.
- The training and know-how to use BEI’s project-management software, EPIC, which is specifically designed for Exit Planning. EPIC equipped Giselle to:
- Initiate the planning process.
- Disseminate client data to all involved advisors (and the owner).
- Recommend actions created by Giselle’s Advisor Team designed to achieve an owner’s objectives in every planning step.
- Create a written Exit Plan consisting of agreed-upon recommendations.
- Assign each recommendation to an appropriate advisor.
- Set deadlines for each recommendation to ensure timely execution.
That combination of knowledge (the Advisor Team) and process (The BEI Seven Step Exit Planning Process and EPIC) enabled Giselle and all advisors to create and implement comprehensive Exit Plans for their business-owner clients. Like Giselle, BEI’s Members use collective knowledge and a proven process to create comprehensive Exit Plans that let their clients leave their businesses on their terms.