Frequently Asked Questions (FAQ’s)
Q: The term “Exit Planning” is a commonly used term. What does the term mean to the Pacific Exit Team?
A: When we talk about exit planning we are referring to the entire range of issues and decisions included in a comprehensive road map designed to guide business owners through the successful exit from a privately-held business. An exit plan asks and answers all the personal, business, financial, legal, tax and retirement planning questions involved in selling a privately-owned business.
Q: How does a well-designed and implemented exit plan help a business owner?
A: Among other things, it helps owners control how and when they will exit their business, maximize the value of the business, minimize tax burden resulting from sale of business, help them reach their business and personal goals, and ensure continuity of the business.
Q: I have a good attorney, can’t my attorney (or CPA) handle the exit planning for me?
A: Most accountants and attorneys are able to advise upon issues in their specific areas of specialty. However, exit planning encompasses so many different issues that no one firm – let alone any single professional – can be reasonably expected to be knowledgeable in all areas of exit planning.
Q: I’m not planning to sell my business for another 5-10 years, why should I spend my time on exit planning now when so much can change in that timeframe?
A: That is an excellent question, and there are two answers.
First, exit planning can be viewed as a form of estate (or contingency) planning. For most people, their business is their most valuable asset. It should be protected by preparing for all contingencies and ensuring that there is a clear plan for the business in case of accident, illness or other unforeseen absence of the owner.
Second, in adopting a long term view, owners can install strategies and procedures now that can produce big results given a longer timeframe. By the time you do decide to sell, you (and the business) will be ready to go and your business will have a track record worthy of an acquisition!
Q: Who should be on my “multi-disciplinary” team?
A: To guide a company and its owner(s) through the entire exit planning and execution process requires the help of several experienced professionals. The multi-disciplinary team should include an M&A advisor (or business broker), CPA, attorney, wealth manager and likely one or more consultants to help with other areas of your business (finance, accounting, HR. marketing, etc.).
Q: How do I start the exit planning process?
A: A good place to start is to find one (or more) professional advisors experienced in the exit planning process and start learning about exit planning. It will also be important to determine how much your business could be worth now and how much money you will need for a comfortable retirement. One valuable resource from the Pacific Exit Team is the Exit Planning Assessment, a custom analysis covering a wide variety of areas relevant to you.
If you would like to learn more about exit planning, the Exit Planning Assessment (EPA) Report or the capabilities of the Pacific Exit Team, please contact us.