Seven Step Process™

There are many tools available to help individuals start a business, but few that help them exit. The Seven Step Exit Planning Process™ is a customized, comprehensive approach to designing and implementing a business owner’s successful exit from his or her business. Exit Planning uses an owner’s unique personal objectives to convert his or her current reality into the desired outcome. The Exit Planning Process helps maximize the financial return, minimize tax liability, plan for contingencies, and increase the likelihood of a successful transfer of the business.

Seven Step Approach:

(1) Exit Objectives – Each business owner’s unique objectives drive the creation of his or her Exit Plan. Step One establishes and tests your objectives so that your Exit Plan works to achieve your goals. Your key exit objectives are: (A) your desired departure date, (B) the value that you want or need from the business, and (C) the individuals or entities to whom you want to sell/transfer your business.

(2) Business and Personal Financial Resources – The starting point for reaching your exit objectives begins here: How much is your business is worth today? How much cash flow does it currently generate? How much income do your non-business assets produce? We then project future cash flow as well as the future value of your business and non-business assets. Most importantly, the combination of Steps One and Two tells us the extent of value or cash flow increase that is necessary to meet your exit goals.

(3) Build and Preserve Value – Based on the first two steps, we make specific recommendations to help grow business value, protect existing value from the actions of others, and preserve company value.  Depending  on your company’s needs, these recommendations may include installing or updating financial reporting systems, aligning employee performance with the attainment of your profitability goals, protecting proprietary information through covenants not to compete with key employees, or taking specific actions to minimize taxes .  The goals of Step 3 are to: (A) Strengthen your company to better withstand competitive pressure. (B) Create a more systematic way to attract, motivate and retain your best employees. (C) Build the business value you need to one day sell or transfer your company for the amount you need to retire comfortably.

(4) Selling Your Company to a Third Party – If you choose to sell your company to a third party, we design strategies to improve the likelihood of a successful sale, minimize the taxes you will pay upon sale, and maximize your sale price and terms. In addition, we help prepare you and your business for sale before the negotiations begin.

(5) Transferring your ownership to insiders – Insiders are children, co-owners or key employees who often do not have the financial resources to pay you what your company is worth. If you choose to transfer your company to insiders, we create a detailed plan to ensure you receive the money you desire from your business, minimize the risk of non-payment and retain control of the business until you have been fully paid. Step 5 addresses these issues: (A) Want to give the business to your children, but believe that taxes will make that impossible? (B)Would chose to sell your ownership to an insider if you thought you could get fair value for it? (C) Have promised the business to your management team, but realize that they don’t have any money?

(6) Business Continuity – We coordinate your business continuity planning with your lifetime objectives. The purpose of Step 6 is to ensure your goals (including transferring the company to the successor of your choice and having your family receive full value for your ownership) are met whether or not you survive to see your business exit.  This step is critical if you: (A) No longer are comfortable with the “understanding” you have with your partner(s) about what you would do if one of you dies, (B) Believe that your spouse would be incapable of running the business if you were to die or become incapacitated (C) Wish to protect the income stream that supports your family should something happen to you.

(7) Personal Wealth and Estate Planning – Step 7 coordinates your estate plan with your Step One Exit Objectives. Our design emphasizes tax efficiency in the transfer of wealth or the business to family members and/or charity and ensures your family receives the amount of annual income necessary to satisfy the financial security goal you set in Step One.

The Exit Planning Process is designed to work with your existing advisors and will also identify areas where specific advisors are necessary in order to define and implement your exit objectives.