The Exit Planning Process

Planning to exit your business can be overwhelming when considering the broad range of issues and advisors you will be working with. At Business Exit Strategies we follow the Seven Step Exit Planning Process™ developed by the Business Enterprise Institute. This process revolves around your objectives in leaving your business and aligns current and future advisors to these objectives.

The Seven Step Exit Planning Process™ is summarized below:

Step One - Establishing Owner Objectives

Your successful Exit Plan will rest on three owner-established goals:

When you want to leave
How much money you want when you leave
Who you want to leave the business to

These objectives form the foundation of your Exit Plan.

Step Two - Establishing Business Value and Cash Flow

Where you are is as important as where you want to go. This next step determines what you have - how much is your business worth? With this in mind, we can determine what needs to be done in order to achieve your objectives in Step 1.

Step Three - Preserve, Protect and Promoting Value

What features, or characteristics, are necessary to make your business saleable and valuable? These features (Value Drivers) either reduce the risk associated with owning the business or enhance the prospects that the business will grow significantly in the future. In this step, we will identify ways of Preserving, Protecting and Promoting your business value and cash flow.

Step Four - Sale to a Third Party for Top Dollar

Selling your business to an outside third party has immediate value to you in terms of cash in your hand. This will certainly minimize your financial risk and eliminate any family succession issues. However, the markets are not what they used to be. Your exit plan will develop an action plan that will set your company up to sell for its highest value.

Step Five - Transfer to Management or Family Members

A sale to insiders does not end with the closing. Only when your price is paid in full does the transfer end. This step we will identify action steps that orchestrate a successful sale to insiders who often lack sufficient cash.

Step Six - Developing a Contingency Plan for the Business

Business continuity is much more than simply making sure there is a new owner. If you die or become disabled before your exit is complete, your dream of financial security will become unattainable. Your exit plan will develop solutions to realizing your business' value in case something unexpected happens to your or your business partners.

Step Seven - Wealth Preservation Planning

The final step in creating your exit plan is to resolve issues related to preserving your wealth and passing it along to your posterity. For business owners, this issue can be complex at times because a large portion of an your total estate is tied up in the value of your company. Your exit plan will work to resolve these issues and provide a clear road map in achieving your goals and objectives.

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