The Keys to Successful Exit Planning

The Keys to Successful Exit Planning

Date: March 19, 2019,

One way or another, we all leave our area of business eventually. Whether by retirement or death, our working days are numbered, and there’s a lot of business to tie up before leaving. Exit planning cuts to this core: having everything in order when you depart, under whatever circumstances that may be.

The Process

To prepare an effective exit plan, a few steps are immediately necessary. These include pre-planning, collaboration, prioritization, evaluation, adjustment and finishing. Each of these steps plays a vital role in realizing a smooth and stress-free exit from your business. As with your will and estate, your exit planning process will benefit from regular adjustment and lots of planning. In many ways, your exit plan is like a will: it dictates what will become of your business once you are gone –whether you are liquidating your assets or passing your business to a relative – preventing chaos and confusion in your absence.


You need to know what you’re working with before you can draft an effective plan. This part of the process mostly consists of gathering your trusted financial and legal advisors to help assess your worth and the worth of your business, the amount of income needed to retire comfortably and to help advise on any outstanding contractual obligations or concerns before your exit.


Once you’ve laid the initial groundwork, you’ll need to get everyone together. Group discussion helps ensure that all areas of your plan can be executed with transparency and understanding. For example, your financial analysts might not know the specific legal obligations you must fulfill before exiting the business. Your legal counsel might not understand the finances necessary for a secure retirement, etc. Bringing all parties together helps foster an understanding between the various spheres of your plan, and allows you all to converse about your obligations and business objectives for the exit. In this stage, your plan will first begin to take form.


Your advisors represent the business side of your exit; however, there is also a personal element to your departure. You may be ready to leave the business sooner than your advisors believe is optimal. You may be planning a new venture in another industry, or you could be facing health complications that make it difficult to continue working in your business. Whatever the case, your personal desires must be taken into account and prioritized against your business objectives. Some individuals are willing to compromise on their business objectives in favor of convenience or comfort; for others, the reverse is true. Determining your priorities will clear this up.


Life doesn’t always go according to plan, and when a wrench is thrown into your exit plan, it can destroy your sense of security. That very possibility is why it is so important you evaluate your options with an experienced financial planner and discuss alternatives to your exit strategy, if necessary. Again, this depends on your personal and professional priorities, and your various plans should reflect the best options for your business value and your comfort and preferences. You will likely be selling or transferring your business to someone else – evaluating your options based on their potential for growth, family inheritance and timing are all factors (among many others) worth considering.


If your current options do not reach the necessary values and conditions you’ve determined, a qualified financial advisor can help you adjust your plan or objectives, and may present options you had not previously considered. Your priorities will again be a major determining factor in this step: are you willing to sacrifice some of your time and comfort to possibly increase your business value before exiting? Or would you prefer to sacrifice some business value for a more timely exit? The goals you’ve set for your retirement or inheritance will also guide your decision-making in this step. Once you’ve made the proper adjustments (or none, if the plan exceeds your necessary value and timing), proceed with your plan!

Leaving a business is a surprisingly complex process, but following this basic blueprint can help you know where to begin. Crafting a smooth, stress-free exit from your business is possible, and our financial advisors can assist you with each step of the planning process. At Harvest Financial, we offer comprehensive exit planning strategies for a wide range of businesses, as well as a range of other financial planning and assessment options. Contact our office today to learn more.

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