Exit/Succession Planning

An exit plan is a written outline of an owner’s business exit strategy that addresses the strategic, financial, professional, and personal issues that have been described. It also identifies and quantifies the accounting, business, insurance, legal, tax, and valuation issues involved in transitioning a private company. While the sale of a company is an event, the exit plan is a process. Exit planning is something that is done over time and may, but does not necessarily, include selling the business. The exit plan is built around the personal objectives of the business owner. As such, it is something that should be completed by the business owner, with the help of a team of outside advisors, regardless of that owner’s age and current position, and regardless of the company’s stage in its business life cycle. A successful transition will require a thoughtful and coherent exit plan.

Exit planning can be described through a proven six-step process:

  1. Plan the exit by setting the owner’s exit goals.
  2. Determine the owner’s financial and mental readiness.
  3. Identify the type of exiting owner.
  4. Learn and choose the most applicable exit option.
  5. Understand the range of values a business can have and the one applicable to the chosen exit option.
  6. Execute the exit strategy plan to reach the business owner’s goals and protect his wealth.

Many ABA members are trained and experienced in helping clients through the exit planning process as part of a team of these clients’ other professionals.

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