The 7 Step Process


Step 1:

Identify the Owner's Objectives This is the first step. Once you determine your objectives the rest of the process is dedicated to meeting those set goals.

Step 2:

Quantify Business and Personal Financial Resources This is also another critical part of the Exit planning process. You need to determine how much money is needed to facilitate the life you have planned. This will in turn determine the selling price of your business.

Step 3:

Maximizing and Protecting Business Value This means increasing the value of your company. It will be beneficial after you determine to whom you want to sell the business and how much you plan on asking for it. This will allow owners to work on the business rather than working in it.

Step 4:

Ownership Transfers to Third Parties This type of sale can cause the business to be sold for a promissory note. All buyers cannot afford to pay the full value in cash. Buyers in this situation are generally key employees or children. In turn, this will cause the owner to maximize security while minimizing taxes.

Step 5:

Ownership Transfers to Insiders This sale process should allow the owner to select the price, deal structure, and operating philosophy that appears to be the best fit. An auction can also keep the business owner in control of the sale. You can also choose to do a negotiated sale where the owner is already identified.

Step 6:

Business Continuity One of the biggest benefits of having an exit plan is that it allows for contingency planning to ensure that the business will continue even after ownership changes. Contingency planning also provides for the family's income and other needs in the event of death or disability

Step 7:

Personal Wealth and Estate Planning Wealth preservation allows you to do the following:

All of these steps are crucial in creating an exit plan that allows the business owner to leave in style.