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Joan M. Ridley
Pres., CFP™, CEPA, CBI

2911 Turtle Creek Blvd., Suite 300
Dallas, Texas 75219

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So What's In Your Exit Plan?


Joan M. Ridley, CEPA, CBI, CFP™

You're about to enter into the transaction of a lifetime. If you're like most business owners, almost all of your investible net worth is locked up in your business. You're playing for keeps. The financial security and comfort of your family depends on exiting right. Preparation is everything. Gather all the facts before making a move.

The success or failure of your exit depends on how well you prepare, and, the quality of your exit planning team. And when we talk about “exit plan” we really mean the plan itself, and, the exit planning process. The exit plan itself includes review of, and, recommendations, based on the sum total of all the data that needs to be gathered before you decide on and commit to your exit strategy. It's the data gathering that we're focusing on in this article.

Warning: It's not a good idea to set your heart on a
particular exit strategy until you have all of the facts.

So what data do you need to gather? Basically, your exit planner needs to know four things:

  1. Your personal and business goals. Take your time here because a knee jerk reaction here could lead you down the wrong rabbit trail in terms of selecting your ideal exit strategy.
  2. Your current personal position. This includes your mental preparedness to leave the business. It also includes how dependent you are on the net proceeds, after taxes, fees, to maintain your ideal lifestyle, and to make desired gifts to family and non-profits. The analysis of your personal financial position should be a lifetime projection that all includes taxes and inflation. This step of the data gathering includes, examining all estate planning documents that affect the choice of strategy, family employee issues, and the capital you will need on deposit to support your post-exit lifestyle. This is an essential step in the development of the exit plan that many advisors and business owners overlook.
  3. The current position of the business. It's not about what a buyer would offer, but what price and terms a buyer would close on if you plan to sell to a third party. Historical trending of revenues and profitability, and industry will largely drive the offer, but the positioning of the value drivers will largely determine the closing terms and price.
  4. Impediments to achieving your stated goals. These road blocks are revealed as the above data is gathered. They should be addressed during the exit planning process.

Seventy-five percent of all business owners are not happy after they exit. This sad phenomenon is often because: 1) they skipped steps when preparing to exit; or 2) they could have made wiser choices when selecting their advisors. Regardless of which exit strategy you have in mind, stay in control of how and when you leave your business. A Certified Exit Planning Advisor is trained and committed to helping you exit right by gathering and examining all of the facts before helping you to implement the best exit strategy for you. So what's in your exit plan?


Joan M. Ridley is President of Business Wealth Solutions, a business consultancy that helps business owners create and implement their own life management plan. She is a Certified Business Intermediary, Certified Business Exit Planner, and a Certified Financial Planner™. In 2013 she received the first Excellence in Exit Planning Award conferred by the Exit Planning Institute for her pioneering contribution to this new discipline. She is the Founder of the North Texas Chapter of The Exit Planning Institute. Please visit us at www.bwsllc.net and call us at 214-692-9192.

Copyright 2014 Joan M. Ridley

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