Even if you are years or decades away from stepping away from your business, it is never too early to start thinking about your exit plan. A strategic plan ensures that all of your future goals and ambitions are met. Whether your goal is to maximize the profit from the sale of your business or leave a strong legacy –you need a well-structured plan to achieve your envisioned outcome.
An experienced exit planner is key to conceiving a plan that will maximize your business’s value, secure your financial future, and ensure a seamless transition. However, while the need for expert guidance is clear, choosing the right partner might not seem as straightforward.
In this article, we’ll examine the role of an exit planner and how choosing the right partner sets the stage for long-term success. With decades of experience helping business owners plan for the future, Saddock Financial Partners provides the requisite insight and strategy for a seamless and successful transition.
What Does an Exit Planner Do?
An exit planner’s role depends on a business’s unique needs but always involves guiding owners through each stage of the exit process.
In addition to a transition’s financial, operational, and legal aspects, an advisor can help position your business for the best possible sale- identifying buyers, exploring mergers, and gauging optimal exit timing.
Most importantly, exit planning isn’t one-size-fits-all. An exit planner can assist with various transition scenarios depending on the circumstances.
Types of Business Exits that an Exit Planner Can Help Navigate
A business can change hands for myriad reasons. The best exit planners can assist with any or all of the following common transition scenarios:
- Selling to an outside buyer
- Succession planning for family members or employees
- Mergers and acquisitions
- Liquidation or closing the business
Key Factors to Consider When Choosing an Exit Planner
The strength of your exit planner will determine the success of your transition. Accordingly, verifying that any potential candidates meet the following criteria is a necessary first step:
1. Experience and Credentials
Do your research and ask your exit planner about their certifications, such as a Certified Exit Planning Advisor (CEPA) or Certified Business Exit Consultant (CBEC) designation.
In addition, ask about their Industry-specific experience. All businesses have unique transitional challenges and considerations based on size and sector. It is important to determine whether your exit planner has experience working with companies like yours.
2. Financial and Valuation Expertise
An adept exit planner should be skilled in various business valuation techniques. Possessing knowledge and understanding of multiple methods means they’ll be able to assess your business’ value accurately now and when it’s time for a transition.
You’ll also want an exit planner with a strong background in tax law or access to a team member with expertise. A background in tax law helps navigate tax implications and financial structuring. Most importantly, it reduces your tax liability exposure when it’s time to sell or change hands.
3. Legal and Regulatory Knowledge
Exit planning is a lengthy process with paperwork and legal or regulatory hurdles. Ensure your exit planner is comfortable with contracts, regulatory compliance measures, and potential legal disputes.
To that end, a qualified exit planner should have access to attorneys to help navigate unforeseen challenges and ensure a legally sound transition.
4. Network of Professional Advisors
Exit planners routinely collaborate with accountants and tax advisors on financial structuring, legal experts on contracts and compliance, and wealth managers on post-exit financial planning.
The best exit planners have a network of these professional and trusted connections to simplify the transition process.
5. Customization of the Exit Strategy
A good exit advisor should tailor the strategy to your business’s needs. Be wary of exit planners who take a one-size-fits-all approach, as this often overlooks critical industry and business-specific factors and may not align with your long-term goals.
6. Communication and Trustworthiness
Transparency and clear communication should be a key aspect of any exit planner’s skill set. Exit planning is a complex, long-term process that can take months or even years. The right exit planner should prioritize continuous communication.
Steps to Vet an Exit Planner: Final Considerations
When choosing an exit planner, the following steps will help ensure you make the right choice:
- Conduct research, seek referrals, and check online reviews and credentials.
- Interview multiple candidates and ask about their industry experience and history with similar clients.
- Review their strategic approach and ensure it aligns with your goals.
- Ask about their fee structure and clarify all upfront costs.
Start Your Search for the Right Exit Planner with Saddock Financial Partners
Planning your exit the right way starts with the right exit planner. Saddock Financial Partners provides the expertise to help you navigate every step with confidence.
Connect with us today to start the conversation, and you’ll discover how a well-organized exit plan sets the stage for long-term financial success.
