According to the Exit Planning Institute’s 2023 brochure, 79% of owners plan to transition in the next ten years (representing 4.5 million businesses and over $10 trillion in wealth) but have no written personal financial plan. Even if you’re not ready to exit, it’s logical to aspire for clarity in this essential area. However, the same research reveals that only 51% actually have a transition plan.
In our experience, there are several factors that create this gap between what a business owner wants for the future of the business, and where that founder stands today. First, many of the entrepreneurs to whom we’re introduced aren’t ready to exit the business today. Why allocate energy and intellectual bandwidth to something that isn’t imminent? There are plenty of strategic initiatives and cash-flow-driven activities that warrant daily attention. First things first.
Second, if you have indeed contemplated life-after-the-business, for many, it’s uncomfortable to envision a life in which you didn’t come to work every day. What would you do instead? How could it possibly be as fulfilling or rewarding as owning and running a company?
Third, you likely have great longstanding advisors on your team. Each of these trusted allies comes to your planning table with their primary discipline front and center. If you went person to person and asked each of them for their thoughts on the future, you’d find yourself with a multitude of answers. However, no single answer seems to cover all bases, and you have no way of knowing which proverbial trigger to pull.
Introducing the Exit Planning Institute and the Certified Exit Planning Advisor designation
At M Advisory Group, we believe that for exit planning to feel comfortable and compelling, business owners deserve to hear a unified voice that represents the wisdom of all of your advisors collectively. The collective wisdom is then supported by a clear and simple process for thinking through what your life might be like after the business, and for preparing the business for the next phase of its life cycle.
Importantly, the preparation and planning isn’t about imminent need. It does not mean you’re planning to exit – now, or even soon. It simply gives you clarity about the full spectrum of your choices, and allows you to accelerate the value of your company. The Value Acceleration Method is all about transferability. Focusing on the value of your business produces positive outcomes and increases your choices, regardless of the timing or path you choose.
The Exit Planning Ecosystem
The Exit Planning Institute (EPI) is a national organization that has certified over 5,000 Certified Exit Planning Advisors (CEPA) across the country. The philosophy is to have a CEPA on your team who then facilitates collaboration across your full team of longstanding, trusted advisors. The result is a complete ecosystem, or what we deem a consortium. Finally, all of the perspectives you’ve relied on all these years are front and center – yet now their separate vantage points are combined into well-rounded, multi-disciplinary strategies.
Importantly, we credit the success of the EPI model to its refreshing simplicity. It has all the fire power required to help a successful operating entity embrace its future. Yet, the steps of the process are clear and simple. It addresses the complete life cycle of exit planning, from discovery to preparation to the ultimate decision around keep versus sell, stay versus exit, now versus later.
Harvest your genius…
If you allow yourself a moment to reflect back on the decades of your life, you can likely pinpoint moments of uncanny clarity that allowed you to fix a big problem or achieve a substantial breakthrough. Possibility Thinking was coursing through you. You had that clear conviction that you were doing the right thing.
In retrospect, it’s easy to see that those moments were fed by sparks of greatness. However, in our experience, it’s much more than that. We believe those same seeds have fueled every one of your proudest successes and most impactful milestones. It’s just that sometimes that clarity comes so naturally, you’re not entirely sure of the process that led you to achieve it.
Our model guides you to harvest that underlying genius. We uncover, capture and document it. Then, together we apply the DNA of your genius to the design of your plan. As a result, we catalyze your deepest Possibility Thinking into the lives and livelihoods you wish to impact.
Unanswer the Questions
Designing an exit plan does not mean that exiting the business is a forgone conclusion. It simply allows you to harvest the genius of your company’s future. To do so, we need an objective assessment of the business, and the company’s financial value, that captures where things stand for the owner and the operating entity. Instead of relying on hunches or individual perspectives in these areas, we Unanswer the Questions.
We conduct a comprehensive Business Valuation based on 200 objective data points. Then we work through Readiness Assessments for both the owner as an individual, and for the business. Importantly, your CEPA advisor is compensated via a flat-fee. Their only objective is to give you an unbiased qualitative and quantitative assessment from a buyer’s perspective. This objectivity is reflected in three deliverables: the Business Valuation Report, the Business Assessment Report and the Owner Readiness Report.
The Soul of the Goal
We move into the second phase with a realistic EBIDA Multiple, and a Prioritized Action Plan: a set of initiatives that can meaningfully increase your multiple. Beginning with a year-long engagement, we conduct 90-day sprints with quantifiable goals and monthly reporting.
We call this phase The Soul of the Goal because it’s centered on clear, relevant outcomes. We accelerate the value of the business so that, if you decide to sell, you’ll know how to react to an offer. And if you decide to stay, these same initiatives will increase cash flow and business efficiencies, making it more fun to come to work every day.
Amplify Your Outcome
Through the integrated wisdom of your Exit Planning Ecosystem, and the clarity of a process-driven planning model, you’ll find inspiration to contemplate one of the biggest decisions of your life through a lens of Possibility Thinking.
Amplifying Your Outcome is about embracing your decision as a decision. At this phase of our process, many owners decide to keep the business and enjoy working for a while longer. All the great work from the first two phases has reduced stress and frustration. You find yourself back in the business you loved all these years and possibly with a leaner, more joyful role.
If you decide to sell, our process allows you to see all of your choices, not simply one perspective or a single alternative. You’ll know how much to expect from the sale, net of fees and taxes, and you’ll understand the optimal time horizon.
Finally, for the first time, the thinking process around this phase of your journey feels transformational instead of transactional. It rises to the occasion of the financial and emotional aspects in synchronicity.