The Ultimate Guide to Business Exit Planning: Secure Your Future Today
What Is Exit Planning?
Exit planning is the strategy that allows business owners to leave on their terms—when they want, for the money they need, and to whoever they choose. As Chris Snider, CEO of the Exit Planning Institute, puts it: “Exit planning is simply good business strategy.” When you implement these strategies, your business becomes more efficient, more valuable, and easier to transition.
Why Focus on Exit Planning Now?
Even if you don’t plan to retire or sell for another decade, starting your exit plan today drives value into your company and aligns your personal and financial goals. That means more options—on your timeline—when you’re ready to move on.
The Three Essential Components of Exit Planning
To successfully transition your business, address these three key areas:
- Maximize Transferable Value
- Create a Personal Financial Plan
- Develop a Life-After-Business Plan
1. Maximize Transferable Value
First, get a market valuation to understand what a willing buyer would pay today. This isn’t a formal appraisal, but a reality check on your business’s attractiveness and readiness. If your current advisor isn’t exit-planning-savvy, find one who is—this will likely be the biggest liquidity event of your life.
Business Attractiveness & Exit Readiness
Think like a buyer: how appealing is your company? By auditing operations, management, sales, and customer processes, you uncover gaps and opportunities. For example, we once helped a client implement a sales training program and hire new reps, instantly boosting their business’s value.
2. Personal Financial Plan
Like planning a trip, your personal financial plan charts where you are today, where you want to go, and how to get there. Key questions include:
- How much do I need to maintain my desired lifestyle?
- How reliant am I on business income versus outside investments?
- What must my business sell for to fund my goals?
A holistic plan ensures you have a clear path to long-term security.
3. Life-After-Business Plan
The final leg is your blueprint for life post-exit. Many owners struggle with identity loss when the business is gone. Whether it’s more family time, hobbies, or new ventures, writing down your personal goals and legacy plan is essential.
Quick Review
To recap, the three legs of the exit-planning stool are:
- Maximize Transferable Value – Understand and enhance your business’s appeal.
- Personal Financial Plan – Map out exactly how much you need and how you’ll fund it.
- Life-After-Business Plan – Define what fulfills you once you step away.
Remember, your personal financial goals should drive business decisions—never the other way around.