The Exit Planning Process: Simplify the Complex

Sun, 06/04/2017 - 18:00


Many of our most recent articles have covered a wide range of Exit Planning topics for business owners: goal setting, resource determination, motivating key employees, income tax minimization, buy-sell agreements, and comparisons of various Exit Paths, among dozens of others.

One common advisor reaction to that mountain of information is, “How can I efficiently and effectively apply these techniques and strategies to actual client cases?” In fact, advisors who attend our two-day Boot Camp for Advisors express similar concerns:

  • “I’ve done some Exit Planning work for my clients in the past, but it doesn’t seem to be complete or comprehensive.”
  • “Every time I work with clients who ask me for help exiting their businesses, it seems like I’m recreating the wheel.”
  • “I don’t want boilerplate plans. Every one of my clients has different goals, issues, and challenges.”
  • “I’m busy. I don’t know whether I have enough time to do Exit Planning.”

The answer to these concerns is a comprehensive, organized, and tested process. Let’s see how The BEI Seven Step Exit Planning ProcessTM benefits both owners and advisors.

The Benefits of the Exit Planning Process for Business Owners

The BEI Seven Step Exit Planning Process provides five overarching benefits to owners:

  1. It is incredibly easy to determine whether the Process is successful. The only way the Process can be deemed a success is if its execution allows the owner to exit the business on his or her terms.
  2. It puts owners in touch with exceptional advisors, because Exit Planning is a team effort. The Process requires a leader/facilitator skilled in Exit Planning (i.e., an Exit Planning Advisor) who often recommends advisors from other professions (e.g., accounting, law, financial planning) to assure that the Exit Plan is executed appropriately based on their professional experience. No single advisor can create a comprehensive Exit Plan alone. There are simply too many moving parts.
  3. It requires the owner to create a written plan (with help from the Advisor Team) that is flexible enough to accommodate changes while holding the owner and his or her advisors accountable for performing tasks on time.
  4. Every comprehensive Plan consists of Seven Steps that cover all parts of an owner’s Plan (goal setting; resource determination; data-based estimates of business value and cash flow growth; tax minimization and asset protection; choice of Exit Path; business succession; and wealth preservation). Owners can also tailor their Plans to focus on a specific challenge, such as growing cash flow through key-employee incentive plans.
  5. Because each Plan is based on an owner’s unique goals, aspirations, and resources, each Plan is a one-of-a-kind road map that speaks directly to the owner’s desires.

The Benefits of the Exit Planning Process to Advisors

The Exit Planning Process also directly benefits advisors in six overarching ways. It’s this mutually beneficial relationship that has proven the Process successful for both advisors and business owners.

  1. The Process is universal in its practice but unique in its outcomes, which creates important time efficiencies for advisors. Each owner can enter different inputs (i.e., Exit Objectives) into the systematic Exit Planning Process and, no matter how different they are, successfully exit their businesses because the system is designed to bend to the owner’s will. This means that advisors can use the exact same Process for even the most different owners and still produce a successful Exit Plan.
  2. The Process gives advisors confidence that their representation is comprehensive because the Process itself is comprehensive and documented: It has been successfully used and continuously developed over 25 years.
  3. The Process facilitates collaboration with other professionals who contribute their experiences and professional knowledge to the Plan’s design and implementation. This provides advisors with a new stream of prospects that they may have otherwise never seen and opportunities to network with the best Exit Planning Advisors around.
  4. The Process provides advisors with state-of-the-art tools. BEI constantly updates its Exit Planning tools based on the experiences of hundreds of advisors who use them thousands of times each year. These experiences and updates have allowed the Exit Planning Process to evolve into the organized, thorough, and disciplined process it is.
  5. The Process systemizes quality control. The Process calls for well-defined timelines and accountability from all members of the Advisor Team. This discipline facilitates successful client representation.
  6. The Process organizes training and facilitates task delegation because the Process is repeatable and documented.

The BEI Seven Step Exit Planning Process is the backbone that runs through every owner’s Exit Planning engagement. Exit Planning and the Exit Planning Process are one in the same. The central question for you is, “How do I use it?

In our next article, we’ll show you exactly how to do that, beginning with Step One: Setting Exit Goals.