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EXIT PLANNING

Even though half of privately owned businesses will change ownership in the next 10 years, only 75% of business owners have an exit plan. Because of a lack of planning, many of these owners struggle with…

Undervaluing their company
Inability to control their exit
Lack of buyers (“one buyer is no buyer”)
Paying too much in capital gains and income taxes
Paying too much in estate taxes
Headaches for family members to solve

 

WHAT IS EXIT PLANNING?

 

“An exit plan asks and answers all the business, personal, financial, legal and tax questions involved in transitioning a privately owned business. It includes contingencies for illness, burnout, divorce or death. Its purpose is to maximize the value of the business at the time of exit, minimize taxes, and ensure the owner is able to accomplish all his or her personal and financial goals in the process.”

– Exit Planning Institute

At Vantage, our Certified Exit Planning Advisors (CEPA) work with clients to create a successful exit strategy that maximizes the value of the business, ensures personal and financial preparedness, and helps secure your future.

A Vantage Exit Strategy allows you to…

✔ Control how and when you exit your company
✔ Maximize value
✔ Keep as much revenue as possible
✔ Shorten due diligence and documentation periods
✔ Have better control over confidentiality
✔ Have strategic options to choose from
✔ Know your future is secure

Typical Business Owner Questions:

WHY DO I NEED A TRANSITION PLAN?

– Early planning, typically 3 to 5 years before a planned owner transition, allows sufficient time to understand the strengths of your business from a potential buyer’s perspective and also to shore up any perceived weaknesses.

I’M UNSURE WHETHER MY CHILDREN OR EMPLOYEES WANT MY BUSINESS OR COULD RUN IT SUCCESSFULLY WITHOUT ME?

– Many owners assume that their adult children and/or employees would love to “inherit” the business when they are ready to leave it. It is wise to verify this assumption thorough “vetting” of not only their desire but also their ability.

WHAT HAPPENS TO MY FAMILY’S FINANCIAL SECURITY TODAY IF I’M HIT BY A BUS ON MY WAY HOME?

– You should have adequate life insurance but even if you do, your family and employees deserve to know your “wishes” in case of this event, just like the purpose of a “will”.

WOULD SOMEONE ELSE BE INTERESTED IN MY BUSINESS?

– Most businesses have potential 3rd party buyers interested in running your business. Some are owners of similar businesses but many more are people currently working in jobs for someone else and that have a strong desire to operate their own business.

WHAT IS MY BUSINESS WORTH TO SOMEONE ELSE?

– Most businesses that are not completely dependent upon their owner (more than 3 employees) will have a value to a potential 3rd party. Even if you have no intent to sell your business now, it is good to know how your business would be perceived by the marketplace and what if anything you could do to improve its perceived value.

WHAT ARE MY OPTIONS TO EXIT?

 – There are typically several options to consider when planning to exit your business. The least desirable for the owner and the employees is to have no plan and close the doors upon your disability, divorce, death or other exit.

OUR EXPERT COACHES CAN GUIDE YOU THROUGH YOUR EXIT STRATEGY

 

CONTACT US TO START A CONVERSATION

Typical Business Transition Plan Components

DEFINE OWNER’S TRANSITION GOALS
– using a series of tools and questionnaires, the owner’s goals are identified and documented for future reflection and assurance of goal accomplishment

SUMMARY OF PERSONAL AND BUSINESS SITUATION
– through analysis of business and personal questionnaires and other requested data, a synopsis is created of the relevant facts that will enter into the decision making process

BUSINESS ASSESSMENT
– using a statistically proven assessment tool, 32 business elements and 8 primary business value drivers are assessed to document the effect that these factors have on the enterprise value of the company

BUSINESS VALUATION
– using standard techniques employed by the investment banking community, provide a business valuation range grounded in the reality of the market place

TRANSITION OPTIONS ANALYSIS
– a presentation of available transition options and the pros and cons associated with each

VALUE ENHANCEMENT OPTIONS
– a presentation of potential value enhancement options for the business’ enterprise value. This is done to provide a path to enhance the enterprise value to better align with the shareholder’s business, financial and personal goals if needed

PERSONAL ACTION PLAN
– a step-by-step action plan to accomplish owner’s personal goals associated with their transition

BUSINESS ACTION PLAN
– a step-by-step action plan to accomplish owner’s business goals associated with the transition plan

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