Seven Step Exit Planning Process

“I know that planning my business exit is important, but thinking about all the moving parts is overwhelming. Is there a way to approach this one step at a time?”

“I want all aspects of my planning tied together in one coherent plan.”

There are many tools available to help individuals get into business, but few that help them get out. The Seven Step Exit Planning Process™ is a customized comprehensive approach to designing and implementing a business owner’s successful exit from his or her business. Exit Planning uses an owner’s unique personal objectives to convert his or her current reality into the desired outcome. The Exit Planning Process helps maximize the financial return, minimize tax liability, plan for contingencies, and increase the likelihood of a successful transfer of the business

STEP 1: YOUR EXIT OBJECTIVES – Each business owner’s unique objectives drive the creation of his or her Exit Plan. Step One establishes and tests your objectives so that your Exit Plan works to achieve your goals. Your key exit objectives are: (1) your desired departure date, (2) the value that you want or need from the business, and (3) the individuals or entities to whom you want to sell/transfer your business.

STEP 2: YOUR BUSINESS AND PERSONAL FINANCIAL RESOURCES – The starting point for reaching your exit objectives begins here: How much is your business worth today? How much cash flow does it currently generate? How much income do your non-business assets produce? We then project future cash flow as well as the future value of your business and non-business assets. Most importantly, the combination of Steps One and Two tells us the extent of value or cash flow increase that is necessary to meet your goals.

STEP 3: BUILD AND PRESERVE VALUE – Based on the first two steps, we make specific recommendations to help grow business value, protect existing value from the actions of others, and preserve company value by minimizing income taxes. Based on your company’s needs, these recommendations may include installing or updating financial reporting systems, aligning employee performance with the attainment of your profitability goals or protecting proprietary information through covenants not to compete with key employees.

STEP 4: SELLING YOUR COMPANY TO A THIRD PARTY – If you choose to sell your company to a third party, we design strategies to improve the likelihood of a successful sale, minimize the taxes you will pay upon sale, and maximize your sale price and terms. If you choose instead to retain ownership or transfer the company to insiders, you will skip this Step.

STEP 5: TRANSFERRING YOUR OWNERSHIP TO INSIDERS – Insiders are children, co-owners or key employees who often do not have the financial resources to pay owners what their companies are worth. If you choose to transfer your company to insiders, in Step Five we create a detailed plan to ensure that you receive the money you desire from your business, minimize the risk of non-payment and ensure that you retain control of the business until you have been fully paid.

STEP 6: BUSINESS CONTINUITY – As part of your Exit Plan, we coordinate your business continuity planning with your lifetime objectives. The purpose is to ensure that your goals (such as transferring the company to the successor of your choice and having your family receive full value for your ownership) are met whether you survive to see your business exit or not!

STEP 7: PERSONAL WEALTH AND ESTATE PLANNING – In Step Seven, we coordinate your estate plan with your Step One objectives. Our design emphasizes tax efficiency (in the transfer of wealth or of the business to family members or charity) and ensures that your family receives the amount of annual income necessary to satisfy the financial security goal you set in Step One.