Advisors can be reluctant to raise the topic of business Exit Planning with their clients because many business owners may view the topic as complicated and complex. It’s true there are a lot of moving parts and multiple advisors involved in the creation and implementation of an Exit Plan. It also often requires knowledge beyond one’s core profession.
With all that it entails, planning for a business owner’s future may indeed be premature for you and your practice—especially if you have never engaged in multi-disciplinary business planning.
Is there an alternative to Exit Planning?
Fortunately, there is! The alternative to creating an extensive Exit Plan is to conduct an Annual Planning Meeting. This meeting is beneficial to both you and your clients because it:
Involves you in an owner’s future plans.
Is a gentle introduction to planning for those owners who have never done any form of planning.
Follows the Exit Planning structure to prepare owners for the next steps.
Helps owners become familiar with you and how you work.
Demonstrates to owners the financial and other immediate benefits of planning.
Uses a process which facilitates planning and as world-renowned management consultant W. Edward Deming said, “If you can’t describe what you are doing as a process, you don’t know what you’re doing.”
The Annual Planning Meeting
Each year schedule a meeting with your business owner clients and his or her key advisors; usually an attorney, CPA, insurance, and financial professional. If certain agenda items require other professional advisors, they should attend as well.
Exit Planning Advisors create and send an owner-centric meeting agenda to every attendee several weeks before the meeting. Doing so gives everyone time to review it, suggest additions and revisions, and come prepared to the meeting.
The agenda you send an owner could include the follow elements. Ask your clients the specific questions below to get the information you need to start creating the right plan for them:
- Owner Objectives: Have your objectives changed since we last met? Are there any new objectives that we, as your advisors, should be working to meet?
- Preserving Value: Is your company doing everything it should to reduce its tax liability?
- Protecting Value: What steps can we, as your team of advisors, take to protect your company from creditor attack and other risks?
- Promoting Value: What areas of your company need improvement in order to increase its value? (This topic often includes a discussion of motivating key employees.)
- Business Continuity Planning: What must be done to make sure that, if you die or become disabled, your business will continue with minimal disruption?
- Wealth Preservation/Estate Planning: What is needed to: 1) minimize estate and other taxes, 2) treat all of your children fairly (if applicable), and 3) provide financial security for your family?
This agenda follows BEI’s Exit Planning Process but does not include an explicit discussion of exit paths. It is simple, easy to do, and often leads to forming a comprehensive plan for your client’s future.
You may choose to include only those agenda items that you and the other advisors have the knowledge and experience to fully address. For example, if your professional training and practice (and that of the other advisors) are limited to business continuity and estate planning, it might be best to discuss only those topics during your initial meeting. As your knowledge, experience, and team of advisors grows, you can expand the Annual Planning Meeting agenda. To broaden your experience and knowledge, we suggest that you pursue advanced training and seek out and work with additional experienced and capable advisors in a variety of professions.
Annual Planning Meetings with your owner clients and their key advisors is a simple and effective means of introducing owners to business planning and your planning abilities.
Limit planning topics to those you and other advisors on your team have the experience and training to address.
Don’t complicate planning by delving into areas and topics in which you and the professionals on your advisor team are not experienced and skilled.