For some business owners and advisors, Exit Planning looks too big and unwieldy to pursue. Business owners often worry that Exit Planning will take up too much of their time, time they could be using to grow the business. Advisors worry that they don’t have the time or expertise to provide quality Exit Planning services. In the 22 years BEI has helped advisors provide Exit Planning services to business owners, we’re confident in saying that these worries are misplaced. In this article, we’ll show how advisors can help owners leverage their strengths toward Exit Planning and how advisors can leverage their own strengths in Exit Planning.
How to Help Business Owners Leverage Their Strengths
Successful business owners usually have similar talent stacks. They’re driven, they can sniff out talented people to work with and for them, and they know how to implement processes that let them achieve their goals. These talents are what guide the success of their businesses, and they are the same kinds of talents necessary for the success of their business exits. Advisors can help owners leverage their strengths so that they can dive into Exit Planning with minimal effects on their time.
Leveraging Drive in Exit Planning
Business owners are driven to succeed. Constant competitiveness, determination, and motivation push them to tackle challenges that less driven people would shy away from. Advisors can use this drive to encourage business owners to begin Exit Planning now instead of later, when that drive is likely to dry up.
For many business owners, the pursuit of Exit Planning comes down to a matter of drive. While it may seem like Exit Planning piles more work onto their plates, that’s rarely the case. Advisors must show business owners that when they dive headlong into Exit Planning with the same drive that they used to start and establish their businesses, they often end up with more time, more freedom, and more money. Additionally, Exit Planning helps owners protect their families, businesses, and legacies from the unexpected.
There are three actions advisors should urge business owners to take to leverage their drive into successful Exit Planning.
- Write down their vision of post-exit life: Writing goals down increases the likelihood of achieving those goals. This does not mean that owners must have a fully fleshed plan for their exits: The Exit Planning Advisor takes that responsibility. Broad strokes or ideas, such as “I want to travel” or “I want to volunteer” or even “I want to sit on a yacht doing nothing,” will establish a baseline for future planning. Getting owners to think about Exit Planning in their terms can get them to realize how urgent Exit Planning is to them.
- Write down things that are important to them: A business exit affects more than just the exiting owner. It often affects the owner’s family, employees, and community. Writing down things that are important to them can help them focus on addressing those things in their formal Exit Plans. Additionally, getting owners to think about what’s important to them often causes owners to turn up things that they didn’t realize mattered to them. For example, in writing down the people who are important to them, owners often discover that they wouldn’t feel comfortable selling the business if it negatively affected their employees, even if it fulfilled all of their other goals.
- Talk with an Exit Planning Advisor: Contacting an Exit Planning Advisor is the catalyst that drives a successful business exit. Exit Planning Advisors analyze the wants and needs owners have, the current state of the business, and which future actions to take to achieve the owner’s specific goals. Through their training and tool kits, Exit Planning Advisors can synthesize an owner’s brainstorming into an actionable plan, capitalizing on the owner’s drive now.
Leveraging Talented People in Exit Planning
It’s challenging for owners to find talented people to work with and for them. Successful business owners have a knack for finding those people, and they are crucial to successful Exit Planning. There are two things advisors can encourage owners to do to lay the groundwork for an eventual, successful business exit.
- Talk to their current advisors: Advisors to business owners who don’t actively practice Exit Planning often don’t know about their clients’ Exit Planning intentions until it’s too late. This can leave current advisors out in the cold when their clients finally decide to do something about their exits. Many business owners assume that their advisors will approach them about Exit Planning. If their current advisors (i.e., you) don’t do that, they may assume that their advisors either don’t know about Exit Planning or worse, don’t care. Asking a simple question, “What have you done to address your eventual business exit?” opens the door to a deeper, more lucrative relationship with your clients.
- Start considering successors: A key component of Exit Planning is having a management team that can run the company after an owner’s exit. Even if owners decide to sell to a third party, they’ll need a management team to run the show if they want any hope at receiving top dollar for the business. You can encourage business owners to start scouting for potential leaders within their organization or urge them to hire a business consultant to help them. The goal is to determine whether your clients have in-house leaders who can potentially take over or whether the business relies solely on your client, which is never a good position for the exiting owner.
Leveraging Processes in Exit Planning
Processes drive goal achievement. Rarely do successful businesses become successful by chance. The same holds true for a successful business exit. Looking at Exit Planning as a process rather than extra work brings familiarity to the concept of Exit Planning. Help business owners acquaint themselves with the Steps involved in creating a successful Exit Plan, then use your expertise and Advisor Team to turn the process into a comprehensive Exit Plan.
How to Leverage Your Strengths as an Advisor
Business advisors thrive in their areas of expertise. Experience shows that advisors struggle to see how their expertise fits into the big picture of Exit Planning. A common misconception advisors have is that if they aren’t equipped to do one part of Exit Planning, such as business valuation, then they aren’t equipped to do Exit Planning at all. This simply isn’t true.
Exit Planning Advisors come from many different professions, such as accounting, finance, insurance, and law. They leverage their strengths within their professions to provide relevant advice to business owners. They then leverage the tools and training that they have as Exit Planning Advisors to gather other advisors to join their Advisor Team, make recommendations to business owners about their exits, and implement their clients' Exit Plans efficiently.
Exit Planning helps advisors see additional value that their expertise can bring to the Exit Planning Process. It prevents advisors from leaving opportunities on the table, letting them use their expertise in a high-demand industry while properly using other advisors’ skills as members of the Advisor Team.