Selecting Business Exit Planning Advisors

In the last issue (#48), we discussed the Benefits of Business Exit Planning. In this issue we address Selecting Business Exit Planning Advisors.

"The biggest obstacle to finding a professional adviser is not being clear about what you want." Paul Clitheroe

Selecting Business Exit Planning Advisors

In Issue #47 – A 20-Step Business Exit Planning Process, two of the important steps were: assembling and communicating your goals to advisors; and selecting a qualified “quarterback” from among your advisors to coordinate and document the results of the exit planning effort.

Assembling a team of multi-discipline advisors is an important step in the business exit planning process.

Exit planning requires a multi-discipline approach.

There are multiple types of plans being developed: a contingency plan to deal with an unexpected death; a business plan to improve the business based on its current valuation and obstacles to a successful sale; a succession plan to improve the capabilities of internal management; tax planning to minimize taxes and maximize net proceeds when the business is sold; retirement transition planning to prepare you mentally for life after business ownership; financial planning to project your retirement needs; wealth management to preserve and protect your assets; and an estate plan to maximize the assets passed to your heirs.

You need a good quarterback for your exit plan

No single advisor is going to have the necessary skill and knowledge to meet all the needs of a comprehensive exit plan. However, one of your existing advisors may have exit planning as a sub-specialty with enough knowledge of all the aspects to shepherd the required resources to complete the required functions. It is best to appoint one of your advisors as the “quarterback” in charge of coordinating the entire exit planning process. The chosen advisor can work with your other professional advisors to accumulate all the necessary information and data necessary for a comprehensive exit plan. Make sure your quarterback is not a rookie, but someone with significant experience in exit planning and accomplished in project management.

Exit planning is an emerging profession

A few organizations have developed training programs to provide certification in exit planning. Each organization has created their own unique process for developing an exit plan and each provides educational services to advisors in other professions to enable incorporation of exit planning into their professional practices. Some of those trained advisors will seize the opportunity to truly make exit planning a primary service. Others will offer exit planning as a sub-specialty marketing ploy to get a foot in the door for their primary specialty. Your best bet for a quarterback is to identify an advisor who offers exit planning as a primary service. If an advisor is learning the ropes on your nickel, they may lack the efficiency of an experienced exit planner, which may result in higher fees for lesser expertise.

Organizations offering exit planning certifications

Following, in alphabetical order, are the three training organizations and the professional designations they provide in business exit planning:

Organization

  • Business Enterprise Institute
  • Exit Planning Institute
  • Pinnacle Equity Solutions

Designation

  • Certified Exit Planners (CExP)
  • Certified Exit Planning Advisor (CEPA)
  • Certified Business Exit Consultant (CBEC)

A collaborative approach to exit planning

These organizations stress a collaborative and comprehensive approach to exit planning. Your quarterback will require input from some of your other advisors but can help move the effort along on a timely and efficient basis, and will develop and write the exit planning report. Although your input is required, the quarterback can help reduce your time investment and keep moving the ball forward while you concentrate on your role as a business owner. By enabling you to ultimately monetize an illiquid asset (your business) and increase its value, and provide other financial and emotional benefits, the advisor monies expended in developing your exit plan will generate a significant return on investment.

Types of advisors

Depending on your situation and your current advisors, your quarterback may come from the following professions: a business broker, a merger and acquisition (M&A) intermediary, a CPA/accountant, an income tax specialist, an attorney, a personal financial planner, an estate planner, an investment advisor/manager, a professional business appraiser, a real estate appraiser, an insurance professional, an employee benefit specialist, a business/management consultant or a dedicated exit planner.

Don't compromise when selecting the advisor to quarterback your exit plan

As it relates to exit planning, no single profession is necessarily better than others. However, if none of your current advisors have previous significant exit planning experience, don’t compromise. It’s too important. Find an exit planning specialist in your local market who can work with your existing advisors to efficiently develop your business exit plan.

When selecting your …….