Comprehensive exit planning

Exit & Succession planning: The cog and the machine

Succession Planning Is Business-Centric

Succession planning focuses on preparing the business for an owner’s exit. Specifically, developing continuity within leadership/management provides the ability to continue the operation following an owner leaving due to retirement, inability to work, or death. While succession planning is an important part of Exit Planning, it focuses on the business from which the owners departing rather than the owner themselves.

Exit Planning Is Owner-Centric

Exit Planning is a comprehensive analysis of all of the factors that affect an owner’s departure from the business. Exit planning goes beyond succession planning to also address issues directly relevant and critical to the goals of the owners.

Exit Planning is an intricate process in which Veracity Advisers collaborates with the owner(s) to create and implement combinations of strategies and steps that uniquely address each owner’s goals and aspirations. In doing so, they are better positioned to leave the business when they want, to whom they want, and for the money they expect.

Comprehensive exit planning

Let's start with "A-Purpose-In-Mind" Approach.

All business owners exit their businesses at some point… by design, or default!

79% of privately held businesses expect to transition ownership within the next 10 years.*

40% of those business will experience ownership transfer to key employees.*

The development and implementation of a thorough exit plan empowers business owners to:

ü  Sell their business at the price that they desire

ü  Sell their business to whom they desire, and

ü  Sell their business when they desire.

Our clients turn their lifetime of commitment and endeavors into the wealth of retirement. This often starts by maximizing the value of the business and minimizing its taxes. It’s common for business owners to implement business plans and set goals, though little emphasis is given to exit planning. 

“In preparing for battle, I have always found that plans are useless but planning is indispensable.”

- Dwight D. Eisenhower (As quoted in Six Crises by Nixon, Richard (1962). “Krushchev. ” Doubleday.)

Analysis is often conducted on how unanticipated events may impact the ongoing business of a company, but rarely is the impact of such events assessed to the business owner’s exit plan. When the unexpected happens – from the death or disability of an owner to a significant change in the national economy- it’s important to be prepared for the impact with options conceived the written exit plan.

If ‘thinking’ about a plan is all that has been done, the only option may be to wait for events or conditions to stabilize before measurable actions may be taken.


The seven step exit planning process TM

Step One: Identify Owner Objectives

We create Exit Plans that are owner-centric: Each owner’s unique goals determine the destination for each Exit Plan.

Step Two: Quantify Business and Personal Resources

We establish the value of an owner’s business immediately following goal setting because business value is critical component in an owner’s ability to meet his or her exit objectives.

Step Three: Maximize and Protect Business Value

After completing Steps 1 and 2, many owners find that current business value will not yield the post-exit financial security they desire. We collaborate with owners to protect existing business value and create customized plans to increase company value.

Step Four: Sale of Ownership to a Third Party

If owners desire to sell to a third party, we advise those owners on how to prepare themselves and their companies for sale.

Step Five: Transfer Ownership to Insiders

We advise and guide owners who choose this Exit Path to create a transfer plan that keeps owners in control of the business until they receive the entire purchase price.

Step Six: Business Continuity: Lifetime and At Death

We work with owners to protect businesses (and owners' families) if: 1) the owner does not live to transfer or sell the business, or in the case of co-owned business, 2) to facilitate the lifetime departure of one owner in a way that is equitable to both the departing and remaining shareholders.

Step Seven: Personal Wealth and Estate Planning

We coordinate owners' plans for their business with their estate plans for their families.

For the business owner, our process:

Maximizes quantifiable and non-quantifiable value of:

  • The business
  • Keeping the business going long term
  • Providing employees with a job
  • Being and industry leader
Minimizes risk that:

  • Owners will be unprepared
  • Key people with hopes for the future will leave
  • The child who takes over the business will fail
Keeps the owner in control of:

  • The choice of the next owner
  • Whether a change of ownership occurs during the owner's lifetime or at death
  • How and when the owner leaves the business
  • The term on which the owner sells/transfers ownership

(* Business Enterprise Institute Business Ownership Survey, Denver, Colorado 2014)

Veracity Advisers is a division of Capital Markets IQ, LLC, a SEC registered investment advisor. 

© 2019 Veracity Advisers

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by Veracity Advisers, to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered personalized investment advice for compensation.