Exit Planning

When the Readiness Assessment determines that both the business and the owner are ready for an exit, we move into the Exit phase. The Exit Planning service will vary depending on the needs of each company, but will typically involve four major steps:

• Evaluating exit options
• Building the appropriate team for the option(s) selected
• Pursuing the selected exit
• Completing the exit transaction

Evaluate Exit Options

Most business owners aren't aware of all of the different options available for an exit. Each option has its own benefits and limitations. Owners need to consider the importance of legacy, price, timing, and ease of transaction in considering the different options.

Some of the exit options include:

1. Family inter-generational transfer
2. Partner buy-out
3. Management buy-out
4. Employee ownership (ESOP)
5. Financial third-party buyer
6. Strategic third-party buyer
7. Recapitalization
8. Orderly liquidation
9. Hybrid combination of some of the above

Build the Team

During the Exit Planning phase, the external team of advisors gets much larger. The specific disciplines required depends on the option(s) being pursued. We will help you identify candidate team members, will lead the team, and will coordinate between the activities of the various team members. Your core advisors both on the personal side (e.g. financial advisor, estate planner) and the business side (e.g. CPA, legal counsel) will become much more involved, but may need to be supplemented by experts that specialize in the exit options being pursued (e.g. valuation experts and attorneys specializing in acquisitions). Some unique specialists will also likely be brought in (e.g. a family business advisor, a business broker or investment banker, a banker specializing in ESOP funding).

Pursue the Exit

Most exit options involve pursuing multiple counter-party candidates. Some of these (e.g. a strategic sale) will require the business owner taking the lead. All of them will require significant support from the entire leadership team, especially the owner. Potential buyers want to know what they would be getting. Transaction specialists (e.g. a business broker) will quickly establish a virtual data room to accelerate and smooth this process and minimize the impact on day-to-day business operations. Candidates will be identified, vetted, pitched, and negotiated with. If all goes well, all of this hard work results in an agreement to consumate a deal.

Complete the Transaction

An agreement is just the beginning. Depending on the nature of the transaction, there will still be much work between agreement and closing of the transaction. At the same time, the buyer will begin working with the business owner and the leadership team on the transition plan. Everyone wants a successful Day 0, when the financial transaction is complete, and Day 1, when the business begins successfully operating under new ownership.