15 Essential Exit Planning Questions for Your Certified Business Exit Consultant
When business owners are crafting their exit strategy, the advice of a certified business exit consultant (CBEC ®) is crucial to both maximize the business’ value and ensure a smooth transition. Here are 15 questions every business owner should ask their CBEC ® before creating a formal exit and succession plan for their business:
- What are the different exit strategies available to me?
Business owners need to first understand the different exit options, such as selling to a strategic buyer, management buyout (MBO,) family succession, ESOP, gifting, private equity acquisition, or merging with another company. CBECs ® are trained to explain the positives and negatives of each option.
- What is the current market value of my business ?
Business owners should also seek out a professional valuation to understand how much their business is worth. To get the most accurate valuation, the business valuation should be completed by someone who understands your business and industry, and not just someone who has access to business valuation software.
- How can I maximize the value of my business before selling it?
Business owners should, furthermore, be educated about steps to increase their business’ value. In some cases, this is a necessary step, as a considerable number of business owners need to boost the value of their business in order to retire comfortably.
A business’ valuation can be improved in a number of ways – by strengthening the business’ systems, procedures & controls, culture, operational efficiencies, human capital, customer relationships, or by investing in growth.
Because the market is anticipated to be a buyer’s market for the foreseeable future, today, looking attractive and ready for sale is more important than ever !
- What tax implications should I consider with respect to my exit strategy ?
Business owners should review potential tax liabilities and strategies with a tax expert, so they can be proactive and minimize the taxes associated with their exit.
- How can I ensure a smooth transition for my employees and clients when I exit my business ?
Business owners should create plans for maintaining their business’ continuity and managing the transition to new owners with someone certified in succession and exit planning.
- What are the legal considerations involved in selling my business ?
Business owners must understand the various legal aspects of a business exit to reduce the associated risks. Seasoned CBEC’s ® have a general understanding of these considerations and can often refer you to the right attorney for your business circumstances.
- How can I structure my exit to meet my financial goals ?
CPAs and CBEC’s ® can educate a business owner about asset sales, stock sales, as well as payment options, such as lump sum vs. installments payouts, so the business owner can best align the sale of their business with their financial objectives.
- When is the best time to exit my business ?
The optimal time to exit your business includes personal, business, and market considerations. CBECs ® can help you decide on the optimal time for preparing and exiting your business.
- How should I prepare for my life post-exit ?
Most business owners have “extreme regrets” after selling their business because they did not think through what they want their life to be after they sell their business. CBECs are trained to help a business owner plan their life after the sale of their business.
- How should I invest the proceeds from the sale of my business ?
CBECs ® should be able to introduce you to wealth managers they have vetted. These professionals can provide you with sound advice on managing and investing the proceeds from the sale of your business to help you secure the financial future you desire after you exit your business.
- What are the risks associated with each exit strategy ?
CBECs ® understand the potential business exit pitfalls and how to avoid them. Because 80% of a business owner’s net worth is in his or her business, it is important that the business owner gets the sale of their business right.
- Can I speak with business owners who have successfully exited their business ?
CBECs ® can connect you with business owners who have successfully exited their business, so you can learn firsthand about their experience, better understand the process, and visualize the probable outcome of your exit.
- How will my personal financial situation be impacted by the sale?
Along with other professionals, like CFPs, CPAs, attorneys, and others, CBECs ® can analyze the impact of your exit based on your personal finances and desired lifestyle in retirement.
- What steps should I take to prepare my business for sale?
CBECs can provide you with a checklist of preparatory actions to make your business more attractive to buyers and Certified Management Consultants CMCs ® can help implement those changes.
- How can I protect confidential information during the sale process ?
Selling a business required several legal documents. CBECs can help you take the steps necessary to safeguard sensitive information during negotiations by helping you to draft a non-disclosure agreement, or NDA, with potential buyers of your business. In addition, your CBEC ® can provide you with a confidentiality agreement before you begin working with him or her.
In conclusion, by asking these 15 questions up front, business owners can work with their CBEC ® to develop a comprehensive exit strategy that meets their financial goals and ensures a smooth transition to the new owner(s.)
About Greater Prairie Business Consulting, Inc.:
Greater Prairie Business Consulting, Inc. (www.greaterprairiebusinessconsulting.com) is an award-winning, national consulting practice serving entrepreneurs, small to mid-sized privately held & family-owned businesses, and middle market companies of any type with revenues between $1 million and $250 million. The firm helps small, mid-sized and middle market companies maximize their performance and exit.
Greater Prairie Business Consulting, Inc. can be reached by calling 1-800-828-7585 or emailing info@gpbusinesssolutions.com.
About the Author:
James J. Talerico, Jr. is an award-winning author, speaker, and a nationally recognized small to mid-sized (SMB) business expert.
With more than thirty- (30) years of diversified business experience, Jim has a solid track record and an A+ BBB rating helping thousands of business owners across the US and in Canada tackle tough business problems to improve the performance of their organizations.
His client success stories have been highlighted in the Wall St. Journal, Dallas Business Journal, Chicago Daily Herald, and on MSNBC’s Your Business. He was named “Texas Business Consulting CEO of the Year,” by CEO Today Magazine, identified as a “Top 10 Management Consulting Entrepreneur to Watch in 2023” by Entrepreneur Magazine, was listed among the “10 Most Visionary Companies to Watch in 2023” by Inc. Magazine, and has also been ranked among the “Top Small Business Consultants” followed on Twitter.
For more than half a decade, Jim was a regular guest on “The Price of Business,” a nationally syndicated radio program on Bloomberg Talk Radio and has also appeared as a subject matter expert on many FOX Radio interviews. He is a regular contributor to several blog sites and has frequently been quoted in publications like the New York Times, Dallas Morning News, Philadelphia Inquirer, The Entrepreneur’s Review, and on INC.com, in addition to numerous, other industry publications, radio broadcasts, business books, and Internet media.
Jim received a Gold “Stevie Award” for “Thought Leader of the Year,” a Gold “Stevie Award” for “Media Hero of the Year During Covid” and a Bronze “Stevie Award” for “Best Entrepreneur” in the Category of “Business and Professional Services” at the American Business Awards ® in New York City. The competition received more than 3,700 nominations and is the premier accolade for business excellence in the US honoring organizations of all sizes and industries. Jim also received an “Outstanding Leadership Award” at the Money 2.0 Conference for his contributions to the financial services industry.
Jim is the author of “8 Steps to Becoming an ETHICS FOCUSED ORGANIZATION,”™ a small business certification program that utilizes a unique eight – (8) step approach for strengthening ethics in any organization. The certification program won the Better Business Bureau’s “Torch Award for Ethics” for the North – Central Texas Region, the International Better Business Bureau’s “ Torch Award for Ethics,” and a Gold “Stevie Award” for “Ethics in Sales” at the International Sales & Customer Service Stevie Awards ®. Participants who complete this certification program are eligible to receive eight – (8) continuing education units from the University of Texas’ Division of Enterprise Development.
Jim received his Certified Business Exit Consultant (CBEC) ® designation from The International Exit Planning Association (IEPA) to help entrepreneurs, small business owners, family businesses, and middle market companies maximize their business exit, and he received his certification in succession planning from the ASPE.
Jim is also a Certified Management Consultant (CMC) ® and an active member of the Institute of Management Consultants.
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