What Is Exit Planning?
Exit planning is the preparation and process of an entrepreneur leaving their business. Exit planning seeks to help owners see their business from an outside point of view and will also generally help in any transaction processes that might occur during the exit (such as a transfer of ownership). Exit planning is more than just a business process, and exit planning can also take into account larger personal goals and the financial situation of the owner beyond the business.
Good exit planning generally involves clearly defined goals to be carried out over time, a great deal of preparation, often taking three to even ten years, and is flexible enough to allow for shifts in the business and countering unexpected events.
Why Do You Need Exit Planning?
Leaving a business, especially one you created from the ground up, is a daunting task and one filled with many steps that can easily turn into missteps. For many owners, most of their net worth is tied up in their business, and as such the exit might be the most important financial decision and process of their entire life.
You don’t want any errors to occur during that period. A solid exit plan that you work on with an excellent planning service prevents errors and makes sure that any transitioning or ownership transfer concerns are addressed. Yet most owners have no plan for leaving the company they created, and poor planning can result in lost opportunities and a massive amount of extra work.
And your departure will happen, sooner or later, in one way or another. It is impossible to run a business forever, and a contingency plan is a tool to help you sleep easier at night.
Exit planning is the preparation of your legacy, whether that be to set you up for the next part of your working life or simply making sure that your family is taken care of for years to come.
Speaking of next steps, exit planning is also vital for the continuance in leadership and for the long-term plan for the business in general. Not only might you wish to see the company you built persist and prosper beyond your tenure, but potential buyers will also be pleased to know that an exit strategy has been set up and that the transition, likely increasing the potential sale price of your business.
What Is the Process of Exit Planning?
While the process of exit planning can vary greatly from company to company, and to go into every detail would be an exhaustive task not suited for this article, the general process is as follows:
- Determine the owner’s objectives and ultimate goals.
- Determine the resources, business and personal, the owner has at their disposal.
- Prepare long term plans and contingencies to make sure the company can easily transition in any event.
- Maximizing the value of the business until the owner decides to sell.
- Work to facilitate the sale or transfer of the business to a new owner.
- Finalize the transfer, and aid or handle all appropriate documentation, while also protecting the owner from potential confusion or foul play.
- Follow through on business continuity and implementing plans and leadership transfer.
- Finalize details and advise the client post-sale as necessary.
1) Business Exits
After some time searching, we found that the overall best exit planning company was Business Exits, a global exit planner and business broker that has proven itself closing nearly all of its deals and specializing in the sale of businesses that range from $2 million to $50 million, making it the perfect fit for the average successful entrepreneur.
We recommend Business Exits for their excellent appraisal capabilities, ability to close a deal quickly, and commitment to getting you the best price for your business.
Some of the standout aspects of working with Business Exits include:
- Outstanding appraisal resources that are among the most popular in the industry. Working with them will help you find out exactly what you can sell your business for.
- Business Exits has entrepreneurial experience built into its framework and is an excellent choice for the entrepreneur who wishes to work with a company that completely understands their point of view.
- They have processes in place that determine the greatest potential values of your business and can help you to foster those into higher selling prices.
- Excellent vetting of potential buyers and a general philosophy that values you and your business’ time.
- They have relationships with a large list of entrepreneurs and buyers (numbering thousands), and you can rest assured that you will find the purchaser that is right for your business.
2) Woodbridge International
With over 25 years of experience and specializing in the sale of medium-sized businesses ($5 million to $250 million), Woodbridge International is an extremely large service provider in the field and a worldwide provider of exit planning and transaction services. Founded by Robert M. Koenig in 1993, Woodbridge has only expanded to open offices around the world and launching new initiatives.
Woodbridge international might not seem like the most personable providers when compared to some other services on the list, but they have the process down and you will be able to rest assured that the exit planning process is done right.
Standout aspects of working with Woodbridge international include:
- A very large pool of buyers that would be vying for your business, and an extremely large pool of international buyers. Woodbridge prides itself to connecting people and groups that would never otherwise meet.
- A large number of bids for your company based on that large pool of interested buyers.
- Excellent marketing of your company, complete with video content regarding the best your company has to offer.
- A clear international dominance, making it a great choice for business owners in countries other exit planning service providers won’t touch.
3) C.O.O. Services
C.O.O. Services, a leadership and executive search service provider that provides exit planning services for mid-range businesses and non-profits alike, is an excellent choice for business owners that have a lot to think about and a lot to plan. Their experience is well-suited towards those stages of the process, even if you want to use a different broker when you want to sell your business.
They use an in-depth exit planning process that will be sure to impress, and have served a long list of clients in a variety of different industries. Excellent consultants and highly personal, C.O.O. is the best choice for quite a few business owners looking towards long-term consideration.
Standout aspects of working with C.O.O. Services include:
- An executive and management point of view as opposed to a common financial-only one, ensuring that your priorities are met, and not just those of the exit planning service.
- An exit planning process that revolves just as much around planning just as much as it does the sale, often a rare occurrence in the industry.
- A big-picture approach that not only serves your business but you as an individual as well, looking at things such as estate planning and your next steps.
- An emphasis on business strategy that will ensure that your company is fully prepared for your exit. Every department, in every way.
4) Cayenne Consulting
Cayenne Consulting, started in 2001 by Akira Hirai, is a consulting firm that focuses on making sure entrepreneurs have everything they need, including a plan, before searching for investors (or buyers). Exit planning is one of the many services they provide, and they specialize in investor relations and finding sources of capital.
Cayenne Consulting is an excellent choice for someone looking at the long-term prospects of their business, looking to build growth and settle all affairs before closing any deal and leaving their company. It is also an excellent option for business owners looking for additional advising and services before eventually selling their business.
Notable benefits from working with Cayenne Consulting include:
- A great staff of experienced and distinguished consultants to meet whatever challenges and needs you have.
- An excellent network of contacts and affiliates to provide services that Cayenne doesn’t handle in-house.
- Offices in many major cities across the United States, and experience in most major industries your business might operate in.
- Top-tier capital attraction services which will leave you with the time and resources to spend growing and perfecting your business while you prepare to sell.
5) Henberger Group
Rounding out the list is Henberger Group, mergers and acquisitions specialists who specialize in helping companies with values estimated between $10 and $150 million. They have clear goals and priorities when it comes to exit planning and they are willing to help you achieve your ultimate financial goals, avoiding unnecessary taxes and a low selling price along the way.
Outstanding aspects about working with the Henberger Group include:
- A service provider who knows very well both sides of the equation: Henberger group provides services to both buyers and sellers of businesses (but never to both sides of a deal at the same time).
- They only take on so many clients at once, and as such, you can be certain you and your business will get the attention they deserve.
After taking into consideration every major provider on the market, we find that one of the following services would be an excellent choice for your business, although we strongly recommend Business Exits as the best and the right choice for most small to medium business owners.