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Who Should Be on Your Exit Planning Advisory Team? Thumbnail

Who Should Be on Your Exit Planning Advisory Team?

Building Your Professional Advisory Team

Why should a business owner have an exit planning team?

I grew up playing a bunch of sports like football, baseball, and basketball. Football was my favorite playing as a running back. With all these sports you need a TEAM to be successful in any game to win. If there was no offensive lineman in a football game, the quarterback and running back wouldn't be able to move the ball nor would the quarterback have any time to throw a pass to their wide receiver. Each position has a specific role and job to do in a game. And you cannot be effective on the field and win games if you are missing any one position. 

It's the same concept for a business implementing exit planning. One of the most important things to do is assemble a team to help you through the process. Some team members you'll be working with before, during, and after the process and others will strategically come in for one assignment and that's it.

Who should be on your exit planning team?

I'd recommend at a minimum you should have access to and be working with a CPA, an attorney, CFP, and a CEPA. Some of these folks will be with you before and after the sale of the business and most of the time the CFP and CPA will be with you the rest of your life to make sure your wishes and your goals are met and taken cared of. 

The Key Players and Why They Are Important

The Certified Public Accountant (CPA)

Not just any CPA but a forward-thinking CPA. Remember this term when interviewing or if you already have an existing CPA relationship. Why is this important?  Typically when you go to a CPA to file your taxes, it’s too late to make any strategic tax planning moves. And when you file your taxes the CPA is technically looking backwards in time at your numbers. A forward-looking CPA is someone you meet with at least a couple times a year IN ADVANCE to get tax advice on how you can strategically lower your overall tax liability. They can do projections on what your potential tax bill will be so you can plan ahead and make strategic moves. The last thing we want to do is overpay in taxes. Don't leave the IRS a tip!

The Business Attorney

The attorney's main goal is to Protect You. They provide legal advice and many forms of protection for your personal assets and your business.There are many types of attorneys out there so to clarify I’m talking about a business attorney who can help you understand complicated documents and contracts filled with all the legal jargon that's nearly impossible to understand. There job is to keep you out of legal trouble. Similar to CFPs and CPAs, attorneys are required to follow ethical and fiduciary codes of conduct enforced by the American Bar Association. Having a sharp business attorney will be important for your exit planning advisory team. 

The Certified Financial Planner (CFP®)

This is one of the MOST IMPORTANT players on your advisory team because they specialize in PLANNING. CFPs can get a holistic view of your entire financial life, understand your personal goals, and help you develop an action plan to meet those goals, while also preventing you from getting derailed in the process. On a side note not all CFPs are created equal. Just because someone has the CFP designation doesn't mean they know how to advise on your business and talk exit planning strategy. Look for a multi-credentialed CFP who can guide you through the many life cycles of a business and through your life after the sale. Here are 10 Questions to ask your Financial Advisor to make sure they are working and advising you with YOUR best interests in mind.

The Certified Exit Planning Advisor (CEPA)

CEPA’s have an expertise in exit planning, meaning they can advise and guide a business owner on how to successfully sell or transition their company. This includes growing its value, bringing in necessary experts to be on the exit planning team, making sure an owner’s personal goals are aligned with their business goals, and positioning a business for a potential sale. Now with the CEPA designation you will often come across other CFPs, attorneys, CPAs, that also hold the CEPA designation. This is VERY GOOD when you see this because not only is that individual well versed in their main specific field like an attorney or CPA but they also understand the Exit Planning process. Here is an online directory to Find A CEPA  in your local area provided by the Exit Planning Institute.

"Individual commitment to a group effort - that is what makes a team work, a company work, a society work, a civilization work."

    - Vince Lombardi

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