-Mike Nedreski, President White Oak Wealth Partners
Succession planning is an important concept for business owners who are leaving their businesses, but this type of planning primarily focuses on the transfer of leadership and/or management from one generation to the next within the business. This one-off approach usually identifies successors within a business and provides them with an opportunity to develop their skills and experience in order to replace the existing leaders of the business at a future date. While succession planning is an important topic for owners who are in the process of leaving their businesses, it typically addresses only one aspect of a successful exit from the business.
Exit Planning, on the other hand, is the comprehensive analysis of all of the factors that impact a business owner. Exit Planning addresses not only the succession aspect of leaving a business but also a wide variety of other issues that can be important to a business owner, including current and future planning with respect to their personal financial stability, their business (its value, its employees, its position in the market), their family and community. Exit Planning starts from the perspective of the business owner's goals and objectives in each of these critical areas, along with current and projected resources (business value, personal and business financial resources), to identify the unique combination of strategies and steps that are most likely to allow them to reach their overall goals.
Exit planning begins with a strong foundation. In my opinion, business exits are successful only when they meet all three of an owner’s primary objectives; leaving the company on the date the owner chooses, leaving the company to the successor that an owner chooses, and leaving the company with the amount of cash desired to secure a comfortable post-business life for the owner.
“How much time does it take to plan a successful exit?” is a great question. The answer depends on the business owner’s objectives and answers to many questions such as: Is there a strong management team in place? Does that team want, and is it prepared to pay for, the owner(s) interest? Is cash flow growing? Are there third-party buyers active in the same marketplace? and so many more. Suffice it to say, the more time devoted to planning, the more successful the strategies and the ultimate outcomes.
Interested in learning more? Please join us for our upcoming webinar where I will be discussing a proven seven-step process for creating and implementing a successful exit plan. I will dig into each step in the process and provide some best practice tips. If you are a business owner and attend only one webinar this year, make this the one. I guarantee that you’ll walk away with AT LEAST one relevant idea that can add value for you and your business immediately.
To register for the webinar, please visit http://bit.ly/Proven-Exit-Process or if you have questions, please contact Amanda Kochirka, Program Director for the Erie Regional Chamber & Growth Partnership at firstname.lastname@example.org.