Advanced Exit Planning

Here is what we have learned over the years, a successful exit plan will work for you because:

A) There is a Written Plan with measurable objectives based on your goals.

• A written plan is essential to serve as a roadmap for you and it will coordinate other involved advisors.
• Our Accountability Checklist is based on predetermined objectives and serves as a yardstick against which to measure your progress through the Exit Planning Process.
• You, the business owner, will know exactly what to expect at each of the various steps along the way.

B) You Have an Experienced Team of Advisors.

• We will assemble your team, each with their own area of expertise, as required by your plan. Lawyers, accountants, financial and insurance professionals, business consultants, and perhaps others must each have extensive experience in their field to help you create and implement the Exit Plan.
• You will have us, experienced in the Exit Planning Process.

C) Your company has strong cash flow and a marketable value.

The Facts:

• Cash flow is critical to determine what your business is worth.
• A quick look at value of a company is a multiple of EBITDA or a multiple of cash flow. If a business has very little or no EBITDA, or cash flow, there is very little if any value to the business above liquidation.
  • Cash Flow is critical if you are transferring the business to an insider such as a child, co-owner, or perhaps a key employee or management team.
  • A common denominator between these insiders is that each usually has very little, if any, money with which to buy your business interest.
• As such, these insiders must rely on the future cash flow of the business after your exit. This cash flow will provide the bulk of the funds they need to pay the balance due you.
• Cash Flow and Value must justify a sale price high enough that the net profit, after all debts and tax bills have been paid, will enable you to satisfy all your financial objectives when combined with your other sources of income.

D) You have (or will develop) a Strong, Effective Management Team in Place.

• It’s very difficult to sell a business to a third party without a management team in place to continue running the business after you have exited. A competent management team is a major plus for any prospective buyer and the lack of such a team can be a deal-breaker.
• This management team must be able to profitably manage the day-to-day operations of your business. A potential buyer needs to know that the business will continue to operate smoothly and profitably after your exit.

E) Time…

• Planning for your exit from your business takes time. Strong cash flow, high business value and a competent management team are essential elements that must be in place before the sale.
• Time is always a plus as it allows for more alternatives. It is not uncommon for business owners to begin this process 3-5 years before they think they want to sell their business.