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Exit Planning is a customized process of setting goals and deciding how best to achieve them.  Whether an owner’s successor will be children, a key employee or an outside buyer, Exit Planning helps business owners maximize their financial return and minimize their tax liability when they transfer the business. If a business owner dies or become disabled before he or she retires, Exit Planning will help the business survive the owner’s departure – enabling the owner and family to receive its full value.


Step One – Establishing Owner Objectives

A winning Exit Plan rests on three owner-established goals:

  1. When the owner wants to leave.
  2. How much money the owner wants when he or she leaves.
  3. Who the owner wants to leave the business to.

These form the foundation of your Exit Plan.

Step Two – Establishing Business Value and Cash Flow

Step One establishes what the owner wants or needs in order to leave the business in style. Step Two determines what the owner has – how much is the business worth? If the owner is selling to a family member, key employee or co-owner, future cash flow (for reasons you will learn) of the business after the owner leaves it, is even more important than value.

Step Three – Promoting Values

What features, or characteristics, are necessary to make the 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.

Step Four – Sale to a Third Party for Top Dollar

If the owner’s goal is to sell to a third party, this is when the owner will learn how to do so for top dollar.

Step Five – Transfer to Management or Family Members

A transfer to insiders does not end with the closing.  Only when the price is paid in full does the transfer end.  This step is when owners learn how to orchestrate a successful transfer 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 an owner dies or becomes disabled before the exit is complete, the owner’s dream of financial security will become unattainable.  This step discusses how Business Continuity is done whether or not the owner has a co-owner.

Step Seven – Wealth Preservation Planning

The sale of a business generates cash – cash for the owner, the family and the IRS. This step addresses how to minimize the IRS’s share.