Guiding Your Path to a Meaningful Legacy
Your Ideal Exit, Your Way
Your business is the result of years of hard work and dedication. Now, it's time to ensure a strategic succession plan that aligns with your vision and goals for the future. Whether you’re passing the torch to a family member or transitioning to a trusted partner, we can help preserve your legacy and safeguard your desires for the next generation.
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The Challenge
Exit planning is a vital part of business succession planning. According to a 2016 survey by the Exit Planning Institute (EPI), 40% of business owners want to sell their business within the next five years. The impact of COVID-19 has only increased the pressure and desire to sell.
It's no surprise why this is the case—80-90% of a business owner's wealth is typically tied up in the business. As an entrepreneur, your hard work in building this valuable asset should pay off. Whether you're looking to capitalize on that value or pass it on to ensure your legacy, proper succession planning is crucial.
Yet, only 79% of surveyed business owners have a written succession plan in place. Alarmingly, 70-90% of private businesses listed for sale don't sell. Most business owners run lifestyle businesses, not value-based businesses, meaning the business heavily relies on them. The key is to build a value-based business independent of the owner, which is why business succession planning is more important than ever.
The Opportunity
Starting your business was a leap of faith, and now you have the opportunity to secure its future. By understanding the elements that add value, such as the four intangible capitals and protecting against the five Ds of unintentional transition, you can significantly increase your business's potential sale price. Most business owners leave a large amount of cash on the table because they fail to prioritize the right areas.
By focusing on enterprise value rather than just income generation, you can increase the potential value of your exit. There's a significant amount of money waiting to be claimed if you're willing to invest in boosting the business's value. The difference between what you want and what you will receive is known as the Value Gap—one of the three Gaps we address in the succession planning process.
The Solution
Our succession planning process can help you find the additional value you're seeking. Using the Value Acceleration Methodology®, we not only increase your business's value but also balance your personal and financial goals to create the legacy and transition you desire.
- Enterprise Value Assessment: This initial step gives you a clear picture of what a potential buyer might pay for your business and identifies the three Gaps and other areas to focus on to increase value.
- Preparing the Business: Here, we enhance the business's value and operational efficiency. We develop and implement a master plan that prepares both the business and you, the owner, for a decision to grow or sell.
- Decision Time: Ultimately, you decide whether to sell or continue growing your business. With the preparation and guidance we've provided, you'll make this decision on your terms.
Succession planning is sound business planning, as it allows you to intentionally increase the value of your hard-earned enterprise, ensuring you achieve your goals rather than settling for less.
Frequently Asked Questions
Are you questioning whether now is the right time to sell your business or what the stages of an effective succession plan entail? We can answer these questions and more, including:
What are the three stages of succession planning?
The stages are Discover, Prepare, and Decide. Discover involves an Enterprise Value Assessment to understand your business and identify the three Gaps. Prepare involves actionable 90-day “sprints” to increase value. Decide is when the owner chooses to continue enhancing value or to sell.
Which options should I consider when planning for business ownership succession?
There are numerous options for transitioning your business. What's important is to clearly understand why you're selling and what you want from it. The method of transition can be very flexible.
What is succession planning, and how does it align with my personal objectives?
Succession planning involves aligning your business goals with your personal objectives. During the Discover phase, we explore the personal side to ensure your future aligns with your aspirations.
How do I know how much my business is worth?
By conducting an Enterprise Value Assessment, which we can facilitate.
Is exit planning the same as succession planning?
Exit planning is a component of the broader succession planning process. Exit planning focuses on the actual process of selling the business and getting the highest value possible, while succession planning focusses on the continuity and legacy of your business as it will continue after you leave.
When is the right time to transfer or sell my business?
When your exit plan and personal goals are aligned.
What happens if my partner unexpectedly exits the business?
This risk is part of the 5 Ds that can trigger an unintentional exit. Proper protection can help avoid this scenario.
Planning and Succession: Your Ideal Exit with a CEPA Professional
You've spent years building your business to its current success. But what comes next? Whether you're planning to sell or focusing on future growth, our team of Certified Exit Planning Advisor (CEPA) professionals can provide the succession planning tools, resources and expertise to realize your dreams. We'll work closely with you to maximize your business's transferable value, develop a financial plan for life beyond business, and create a roadmap for whatever lies ahead.
About Us
We are an independent, fee-based financial planning firm with expertise in client education, retirement planning and exit planning.
Our Team
Our professional advisors thrive on a foundation of trust, authenticity and transparency that prioritizes your happiness at every life stage.
Contact Us
Ready to work with transparent financial professionals who prioritize your best interests? Reach out to Centennial Financial Group today.