Though Exit Planning for business owners continues to grow in popularity, there are still misconceptions about what it is. When owners and advisors clearly understand the point of Exit Planning, they often find that Exit Planning has a lot of answers to the questions they have about a successful business future. Today, we’ll look at three common misconceptions about Exit Planning for business owners and explain some of the benefits of overcoming those misconceptions.
It’s Only for Owners Who Want to Exit Soon
One of the biggest misconceptions about Exit Planning for business owners is that it’s only for business owners who want to exit their businesses in the near future. That’s too narrow a focus. Exit Planning provides short-, medium-, and long-term strategies for business owners who want reap all the benefits of their lives’ work. Because the foundational goal of Exit Planning is to install systems and processes that let owners exit their businesses with financial security whenever they want, even owners who don’t want to exit anytime soon reap the benefits of Exit Planning. It’s true that a formal Exit Plan gives owners a clear path to a business exit, but Exit Planning also does so much more.
For example, a big focus of Exit Planning for business owners is building business value. Whether owners want to exit their businesses now or never, few would balk at a chance to build business value. Exit Planning lets owners focus on building business value to the point at which they could exit their businesses whenever they want and not have to worry about their financial futures. This planning makes the business stronger while the owner is running it. So, if the owner decides that they never want to leave the business, Exit Planning still makes the business as strong as it can possibly be.
Exit Planning for business owners focuses on setting the owner, the owner’s family, and the owner’s business up for future success, whether they exit soon or not.
It Requires Advisors to Learn Entirely New Strategies
Another misconception about Exit Planning is that it requires advisors to learn entirely new strategies. Consider the example of building business value above. A CPA or financial advisor may not have expertise in building business value. But just because an advisor doesn’t have expertise in every element of Exit Planning doesn’t mean they can’t be a successful Exit Planning Advisor.
Most business advisors already use elements of Exit Planning strategies in their core practices. For example, a common goal for business owners who do Exit Planning—whether they are thinking about their business exits or not—is to minimize taxes. CPAs and tax advisors often work to minimize taxes for their clients in their daily routines. In this case, Exit Planning is an extension of their core work.
This extension of their core work broadens the prospect pools advisors have. With a fuller knowledge of Exit Planning, advisors can be more consultative with business owners and present unique solutions to problems that keep owners up at night. Because Exit Planning is an ongoing process, advisors can provide strategies and advice for longer time frames without straying too far from their core work. And Exit Planning helps advisors attract business owners to their core services because Exit Planning is founded on the goal of letting business owners take full advantage of their business success.
No single advisor must know every Exit Planning nuance. Instead, advisors work in a team to cover all of the necessary bases for business owners. This lets advisors with Exit Planning knowledge provide their core expertise and draw upon other experts and systems when a problem strays outside of that expertise. So, while Exit Planning has potential to allow ambitious advisors to learn new strategies, the glut of Exit Planning uses the advisor’s core expertise to focus on the owner’s future success in the big picture.
It’s Not Helpful for Owners Who Never Want to Exit
Even owners who never want to exit can benefit from Exit Planning. If owners view their businesses as an extension of themselves, Exit Planning gives them the strategies they need to assure that the business thrives with or without them. For owners who want to work themselves to death for the people they care about, Exit Planning lets them maximize company value and plan for how to make that wealth liquid and distribute it on their terms after they die. For owners who want their legacies to live on well after their death, Exit Planning helps them form succession plans that speak directly to their wants.
Exit Planning is more than just planning for a business exit. Exit Planning is planning for a successful future that overcomes the unexpected. Exit Planning gives owners and the people they care about the freedom to live the lives they want—before, during, and after their business exit. Exit Planning lets advisors extend their core expertise to the successful business owner community and reap the benefits of advising the cream of the crop.
- Exit Planning does more than help business owners plan their business exits. It provides short-, medium- and long-term strategies for owners who want to reap all the benefits of their lives’ work and make their businesses as strong as possible.
- Exit Planning lets advisors use their core expertise in tandem with the expertise of other advisors to offer high-demand consultative services to successful clients, all while extending their prospect pools.
- Even owners who never intend to exit have goals for future success. Exit Planning addresses goals for future success, whether owners want to exit or not.