Business Owners Expect Exit Planning Collaboration

Submitted by Elizabeth J Mower on Mon, 08/06/2018 - 6:00am
Two people clutching coffee mugs on a marble table.

In this series, we’re looking at three ways that Exit Planning speaks to the human element of how Exit Planning Advisors work with their business-owning clients. These three aspects can be the difference between an advisory practice that treads water and an advisory practice that thrives.

  1. Owner-Centricity: Working With Owners, Not For Them
  2. Collaboration: Giving Business Owners Control
  3. Empathy: Collaboration Through Understanding

This week, we’ll look at why Exit Planning Advisors must give business owners control of their business exits by collaborating with them, and how doing so makes them more referable.

Why Exit Planning Advisors Must Give Up (Some) Control

At BEI, we provide tools, strategies, and training to advisors that help them create and implement successful Exit Plans for business owners. One of the challenges that BEI’s tools and strategies help advisors overcome is figuring out what their clients want and expect from their business exits. But Exit Planning Advisors cannot help business owners succeed unless they are willing to give owners control over the process.

 Owners know what they would consider a successful exit, which goals are most important to them, and what they’re willing to do to achieve those goals. They expect Exit Planning Advisors to work with them to flesh out those goals and come up with ways to help them achieve their goals, rather than forcing them to pursue solutions they may not like or agree with.

How can Exit Planning Advisors use their expertise to help owners exit without taking control away from owners? It might not seem possible, but it is.

Collaborate, Don’t Dictate

Successful business owners have methods and processes that bring them success. They’re loathe to change what works unless they feel that the change will bring even better results. This plays a big role in Exit Planning. Think about the circumstances: A business exit is one of the biggest changes in lifestyle for a business owner. For many owners, the business is a huge part of their lives, if not the most important. If they decide to plan their exits at all, they’ll want to have as much control over it as possible.

As such, Exit Planning Advisors must collaborate with business owners on their exits rather than dictate solutions. A common scenario for Exit Planning Advisors in which collaboration plays a big part is when they discuss business owners’ Asset Gaps.

Briefly, the Asset Gap is the difference between the assets owners currently have and the assets they must have to exit their businesses on their terms. Business owners often make two incorrect assumptions about the size of their Asset Gaps.

  1. They believe their businesses are worth more than they really are.
  2. They believe that they’ll need much less money to live a comfortable post-exit life than they really do.

Likewise, there are two ways that Exit Planning Advisors can approach this topic.

  1. Dictating that owners close the Asset Gap and that only they have the expertise to do it.
  2. Collaborating with owners on what they need to achieve their goals.

Option 1 allows Exit Planning Advisors to show off how much they know, but it requires them to confront owners and essentially say, “You’re wrong about your business, and you need to fix it immediately.” Even if that’s true, exceedingly few business owners care to have an advisor tell them that the way they’ve been running their businesses is wrong, unsolicited. They’re much more likely to resist suggestions if they feel forced to make them, especially if they come from advisors they aren’t used to working with.

Option 2 gives owners control over their Asset Gaps. When Exit Planning Advisors collaborate with business owners, it means that they probe their goals, and carefully and persuasively challenge their assumptions with facts. This requires Exit Planning Advisors to find out what’s most important to their business-owning clients. Is money their biggest goal? How do the owner’s family dynamics affect the owner’s expectations for a successful exit? Is it important to the owner that the company continue to pursue a certain culture even after the owner exits? These are just some of the questions Exit Planning Advisors must know the answers to, to begin addressing the Asset Gap.

Exit Planning Advisors must also reassure owners that they are in control of achieving their goals. This becomes much easier when Exit Planning Advisors know what matters most to owners and what owners are willing to do to achieve their goals. The only proven way to do that is to ask the right questions and have a vested interest in the owner’s successful exit. When Exit Planning Advisors prove to owners that they’re vested in their exits by collaborating with them, the idea of Exit Planning seems less like a chaotic change and more in control. When owners feel in control, they’re more likely to trust their advisors and act on their suggestions.

BEI provides many tools that educate and encourage owners to act without losing control, and give Exit Planning Advisors more insight on what their business-owning clients care about, want, and need. This includes white papers, value-building strategies, fact-gathering software, and access to experts who can address even the most complex concerns business owners have about the changes they’ll need to make to exit successfully.

Build Trust, in Person and Online

Think about the last time you hired a professional to provide services you knew little about. You likely asked friends for suggestions or scoured the Internet for reviews. You had control over the person you were going to work with and made your decision based on trust in your friends’ suggestions or online reviews. Exit Planning is no different.

As more business owners approach their business exits, they’ll likely turn to fellow business-owning friends, their current advisors, and the Internet for Exit Planning Advisors who can help them. According to a BEI survey of business owners, 41% of surveyed owners had talked to a CPA about their exits, 32% had talked to a business-owning friend, 30% had talked to a financial advisor, and 25% had talked to a lawyer. Only 18% of surveyed owners had spoken to an Exit Planning Advisor about their exits.

This means that there are several groups of people that Exit Planning Advisors can (and should) work with to build trustworthiness. By proactively reaching out to different advisors and business owners in their areas, Exit Planning Advisors can tap into a wealth of potential referral sources. The key, of course, is to give these groups a reason to want to talk to them. And the reasons are plentiful.

BEI has documented methods that allow advisors to become thought leaders among business groups and advisor groups. This includes tools to engage business owners in an Exit Planning conversation, newsletters that deliver relevant information about Exit Planning to business owners, and presentation/workshop materials for both business owner groups and advisor groups. These tools are proven to establish Exit Planning Advisors as experts in their field. By establishing this expertise, Exit Planning Advisors give business owners the control to make the best decisions regarding their business exits. They also give other advisors the confidence to refer their business-owning clients to them, while building relationships with potential Advisor Team members.

Conclusion: Less Control Means More Control

Business owners expect to control their business exits. This does not mean that they can or want to do it alone. Instead, business owners expect their Exit Planning Advisors to collaborate with them on their Exit Plans. They also expect Exit Planning Advisors to adequately prove their expertise and trustworthiness, and they’ll often go to friends, other advisors, and the Internet to find it. In the end, Exit Planning Advisors must assure business owners that owners—not any of their advisors—are in control of their exits. Exit Planning Advisors and their Advisor Teams just give them the tools and strategies to get there.

In our final post of this series, we’ll examine business owners’ expectations for empathy and understanding about their business-exit goals.



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