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Phased Comprehensive Planning

Submitted by John Brown on Fri, 07/10/2020 - 8:00am

When advisors use BEI’s Seven Step Exit Planning Process™, they create owner-centric and owner-specific, comprehensive business Exit Plans. By “comprehensive,” we mean plans that recommend and execute the actions necessary (and assign tasks with deadlines to various parties) to transfer a company: 

  1. To an owner’s chosen successor.
  2. On a date the owner chooses.
  3. For an amount of cash that achieves that owner’s goals.
  4. In a way that grows and protects a business until it is sold or transferred.

That’s a tall order.

It’s not too surprising that many owners are not willing to immediately devote  a huge chunk of time, effort, and money to achieve all those goals when they are wrestling with a critical issue that demands their immediate attention. There is another group of owners who don’t understand what comprehensive Exit Planning is, and  feel no need to engage in it. 

For both groups of owners, we recommend that you suggest tackling one “phase” of an Exit Plan at a time. Focusing on one issue and resolving it paves the way to concur the next steps of the Exit Plan. 

Get the Facts

Before engaging in a comprehensive Exit Plan or just a single phase of it, Exit Planning advisors should always begin with an accurate determination of an owner’s goals and resources gap. That foundation is necessary to address any one of an owner’s challenges or issues. For example, you may discover that an owner’s over-arching concern is growing the business. In that case, your initial engagement might address that challenge before you turn to the owner’s other Exit Planning needs. 

Discovering an owner’s biggest concern, and how to deal with it in a manner that also promotes the owner’s ability to exit on their terms by:

  • Targeting a pressing personal or business-related concern that quickly generates positive results.
  • Using the first two steps of BEI’s Exit Planning process to help owners articulate their goals and quantify their resources. Advisors use this information later when creating a more comprehensive plan or addressing another phase of that plan.
  • Setting the stage for a long-term relationship between owners and advisors.

Addressing Owners’ Primary Focus First

Let’s assume that advisor George is meeting with a new prospect, Henry Sailor. Henry’s company’s cash flow has stalled in recent years despite his best efforts to increase it. Henry is not planning to leave his business for at least five years, so he does not see the need for a comprehensive Exit Plan. His focus is on improving the business’s cash flow. He also wants to make sure his business continues to grow if something happens to him. Henry wonders if George is the person to help him.  

As the only one of Henry’s advisors skilled in Exit Planning, George suggests, “Let’s begin by calculating how much cash you will want when you leave your business in five years. Based on that number, we’ll address your immediate concern first, healthy cash flow. We’ll quantify how much business cash flow must increase annually and recommend specific actions to make that happen. At the same time, we’ll suggest a number of actions you can take to ensure your business continues if you don’t start the planning process.” 

Phased Planning

This approach is called phased planning. These phases are what make up the pillars of a standard comprehensive plan. The distinction is that in phased planning, this “planning phase” constitutes the entire planning engagement. As is the case in our example, sometimes owners are not willing to focus on more than one concern at a time.

In most engagements however, once the first phase nears completion, it is natural to discuss what next steps the owner might take. Just as George understood Henry’s goals and resources, it is easy to propose goal-based next phases to owners. For example, George might have suggested transferring ownership to one of Henry’s children or protecting his company should key employees leave his business to compete as a next phase.

When advisors prove their ability in an initial phase of planning (always completing the first two steps of BEI’s Exit Planning process to do so) they can easily move from one phase to the next. They can confidently suggest additional recommendations based on an owner’s goals and resources. Addressing an owner’s concerns one-by-one is a great way to prove your value


  • Addressing a single Exit Planning issue is a great approach to owners who want to resolve a major concern quickly and economically and are not (yet) willing to engage in more comprehensive Exit Planning.
  • Focusing on and resolving an owner’s most pressing problem is also a great solution for advisors because it enables them to prove their value quickly; and paves the path to a comprehensive planning engagement.

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