5 Exit Planning Tools to Help Advisors Begin Exit Planning

Submitted by Elizabeth J Mower on Wed, 09/05/2018 - 6:00am
An assortment of tools, including a screwdriver, hammer, measuring tape, pliers, wrench, and various screws.

Beginning Exit Planning can seem like an endless journey for business owners and their advisors. On average, preparing the business for sale or a transfer of ownership takes 5–10 years. But with the right tools, advisors can help business owners make one of the most important decisions of their business lives smoother, less confusing, and more profitable.

Advisors who work with business owners know that business owners prefer two things when working with advisors: a proven process and the ability to customize. Threading the needle of proven process and customization might seem impossible at first glance. However, Exit Planning Advisors thrive on their ability to do just that.

At our most recent Exit Planning Conference in Denver, BEI Member Rick Scruggs said something that resonated with me: Exit Planning is like a puzzle. All puzzles are similar in that they all have pieces you need to build them. But all the pieces can all look different and create a different picture in the end.

When business owners begin Exit Planning, they might have an idea for what they want their final post-exit puzzle to look like. The trouble begins when they try to determine which pieces fit together to create the picture they’ve envisioned for their business exits. The tools advisors use (i.e., puzzle pieces) can make all the difference in creating appropriate Exit Plans for business owners. While there are many tools that go into creating strong Exit Plans, Exit Planning Advisors commonly use five tools to begin Exit Planning with business owners.


Silver Birch Award Winner Nahtab Narsimhan said, “A good education is the greatest gift you can give yourself or anyone else.” Exit Planning Advisors take that advice to heart when they first begin the Exit Planning conversation with business owners. Many business owners understand why it’s important to have an Exit Plan eventually, but they question why they need to start planning sooner rather than later, especially when they feel busy. Experience shows that business owners tend to wait until it’s too late to begin Exit Planning, unless they have a good reason to start planning now.

Exit Planning Advisors address this pain point by sending their clients expertly written, educational newsletters. Twice a month, business owners learn about a topic relevant to Exit Planning that applies to their situations. After presenting a specific Exit Planning idea, these newsletters invite business owners to discuss the topic with the Exit Planning Advisor. There’s no pressure to buy or do anything, other than learn about Exit Planning and what it means to the owner’s business and post-exit plans.

By providing no-cost education using expertly written material from BEI, Exit Planning Advisors establish a need for business owners while raising awareness of their services. When business owners read about a topic that resonates with them—and this happens often—the first person they reach out to is the advisor who brought that topic to their attention. In educating business owners, Exit Planning Advisors also market themselves and their expertise, creating a win-win situation.

50 Open-Ended Questions for Business Owners

Business owners want to be treated like people, not commodities, especially when they consider their business exits. One way that Exit Planning Advisors show their business-owning clients that they care about them as people is by asking them questions that get to the heart of their decision making. Knowing what makes business owners tick gives Exit Planning Advisors insight into the Exit Paths and strategies that could work for each owner’s unique situation.

Of course, Exit Planning Advisors don’t ask business owners 50 open-ended questions all in a row. It’s an Exit Planning conversation, not an Exit Planning interrogation. The 50 open-ended questions tool that BEI provides to its Member Advisors helps them prompt business owners to think about aspects of their businesses they may not have considered. It also helps business owners identify conflicts they may have among their Exit Planning goals, which then allows their Exit Planning Advisors to help address those issues.

Exit Planning Path Finder

Business owners often have confidence in the Exit Paths they want to pursue after they’ve familiarized themselves with Exit Planning. For example, BEI-trained Exit Planning Advisors report that many business owners tell them that a third-party sale is their preferred Exit Path. However, those same Advisors report that business owners often end up selling or transferring ownership to someone else (e.g., a child, a key employee, or an ESOP). That’s because as business owners clarify their wants and needs, their perceptions of their Exit Path options often change. Exit Planning Advisors help facilitate this clarification with the Exit Planning Path Finder.

The Exit Planning Path Finder is an informal approach Exit Planning Advisors use to map what business owners want from their business exits. It presents questions that help owners think about their hopes, dreams, frustrations, and Exit Planning preparedness. It does not pick Exit Paths for owners, but it does help owners discover whether the Exit Path they choose can adequately fulfill their wants and needs. Advisors use the Path Finder to help owners avoid conflicts among their goals early in the process, giving themselves and their business-owning clients the best chance to address issues that may prevent owners from exiting on their terms.

Business Continuity Instructions

Some business owners who aren’t ready to start formalizing their Exit Plans still want to do something to assure that their families are protected in case they die or become incapacitated. Some owners have Buy-Sell Agreements, but experience shows that Buy-Sells usually aren’t updated often, which can cause more problems than they solve. Further, most business owners don’t have any plans to address an untimely death or incapacitation, mostly because those aren’t things they want to think about. Business Continuity Instructions can address these issues.

Business Continuity Instructions are a non-binding guide that helps the families of business owners address issues related to business and personal finances should the owner die or become permanently incapacitated. Business owners find great value in this tool, especially because it can be updated immediately to address even the most pressing issues. BEI-trained Exit Planning Advisors use Business Continuity Instructions as both a conversation starter and a fee generator.

EPIC Software

One of the biggest pieces of the Exit Planning puzzle is keeping everything together. As we mentioned earlier, Exit Planning usually takes 5–10 years from start to finish. It also requires several advisors from different professions. When business owners first learn how much effort goes into proper Exit Planning, it can be overwhelming. However, for business owners, the good part about Exit Planning is that they don’t have to coordinate everything. Instead, their Exit Planning Advisors take the lead on keeping everything organized, focused, and on schedule. They do so by using BEI’s EPIC software.

EPIC gives Exit Planning Advisors and their Advisor Teams a hub for communicating with each other and with their business owners. It produces proposals, recommendations, planning documents, and action-item checklists, all using information that business owners provide. This means that EPIC produces ideas and solutions that are tailor-made for each individual business owner while providing a proven process to allow owners to exit on their terms. EPIC threads the needle between proven process and customization that business owners demand.

The Exit Planning puzzle will always be different for different business owners. But with the right tools, Exit Planning Advisors can help business owners put the pieces together to complete the picture they have of a successful business exit. BEI helps advisors do just that with training, tools, and resources.

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