Many small business owners believe successful exit planning simply means building a high-value business that can be sold at a price that rewards their many years’ efforts. While partly true, this mindset fails to consider other crucial factors that are necessary to ensure not only a desired sale price, but perhaps more important, long-term, post-exit happiness.
Our exit planning services use a wholistic approach utilizing what we call The Three Pillars of Successful Business Exits. Those pillars are:
- Business Attractiveness. Obviously, you want to create a superior-performing business with a high multiple and strong intellectual capital. But business attractiveness is not the sole criteria that defines successful exits.
- Financial Readiness. Business owners should have a sound financial plan that defines, among other things, the required income from a business sale necessary to provide a comfortable income stream. To help business owners achieve financial readiness, we compute a company’s Wealth Gap, which is the difference between the owner’s current wealth and the wealth necessary to provide adequate income. The wealth gap also becomes the basis for developing action plans to improve the business’s value.
- Personal Readiness. Typically, owners’ experiences running their business give them a strong feeling of purpose and fulfillment. However, research shows they rarely ponder how they will achieve similar feelings of purpose and fulfillment in post-exit life. Studies show that 94% of exiting business owners lack a post-exit vision that ensures their life has strong purpose and meaning. This fact indicates that many business owners are at risk for feeling unfulfilled and unhappy in what should be the happiest period of their life. Therefore, we believe proper exit planning must include making sure an owner has a clear vision for their life’s next act.
At Regal Wealth Advisors, we work with small business owners to make sure they properly consider all crucial factors that lead to a successful business exit. We offer the skills and knowledge of two Certified Exit Planning Advisors, Mike Zimmerman, President and Founder, and John Packer, Small Business Director to help you grow the value of a small business owner’s most important investment. Mike and John are a uniquely equipped team with decades of combined experience in wealth management and small business consulting.
We invite you to contact our office at 717-838-3178 and schedule an appointment to learn more about how to our exit planning process, a process that seeks to make your next act—whether you want it to be next year or several years from now—the most rewarding phase of your life.
By John W. Packer, CPA, CEPA, MBA