Unlock the Full Potential of Your Business with Strategic Partnerships

Any small business owner can attest that the journey is filled with challenges, triumphs, and seemingly endless decisions that shape the future of their enterprise and their personal financial life. The most successful owners will quickly acknowledge that they didn’t reach their final plateaus without help from others.

At some point in the journey, owners will reach a point when they need to begin thinking about life after the business. Unlocking the full potential of your life’s work so that it provides the most value to you requires opening the door and leveraging the expertise of a strategic team of advisers. The team can vary depending upon individual needs but at a minimum should include your Wealth Manager, CPA, and a Business Transition Consultant (also referred to as a Business Exit Planning Specialist). Each of these experts provides valuable knowledge that can help elevate the success of your final transition based on the specific needs and goals of the owner.

Here are some steps you should take to build your business exit planning team and the benefits it can bring to both your business and personal success:

1. Start Your Transition Strategy Early

Many business owners delay planning for their eventual exit, assuming it’s a decision that can wait until the distant future when they are closer to making it or feel confident that they’re financially able. However, the most successful transitions are often planned years in advance.

A business exit planning consultant can help you define your long-term goals and identify the most appropriate transition strategy. Whether your plan involves selling to a third party, passing the business on to a family member, or pursuing an employee buyout, having a clear roadmap ensures you are ready when the time comes. 

By knowing your most likely endpoint, you are better able to make decisions today that address operational efficiencies, optimize revenue streams, ensure potential successors are equipped to take over (if transitioning internally), and time your transition to align with the most favorable market conditions.

2. Develop a Personal Wealth Plan for Life After the Exit

Exiting your business marks the start of a new financial chapter in your life. Without proper planning, many business owners find themselves unprepared for life after the exit. Your wealth manager ensures that your personal wealth strategy accounts for your needs, aspirations, and financial goals.

Some of the key considerations your wealth manager will account for include:

• Cash flow analysis – will the proceeds sustain your desired lifestyle?
• Retirement planning – how will your investments, savings, and other income sources support you?
• Estate planning – what legacy do you want to leave for your family or causes you care about?

Your wealth manager works to diversify your investment portfolio, protect your assets, and create a sustainable income stream. He will also coordinate with your CPA to develop a tax-efficient wealth strategy to ensure you retain more of what you’ve earned.

3. Manage Business Financials for Tax Efficiency

The financial health of your business is critical not only for its day-to-day operation but also for your eventual exit. Proper financial management ensures your business is positioned as a valuable, efficient asset. In this endeavor, your CPA becomes a key partner in creating tax strategies that include:

• Minimizing taxable income while maintaining profitability.
• Structuring your exit event to mitigate tax implications (for example, asset sale versus stock sale).
• Leverage tax credits and deductions to ensure you take full advantage of everything that’s available to you.

By proactively managing your financials, you’ll not only save money during ownership but also enhance the attractiveness of your business to potential buyers.

4. The Power of Collaboration

Your wealth manager, CPA, and business exit specialist each bring unique expertise to the table, and their combined efforts create a synergy that drives optimal results. Beyond the technical and financial knowledge, the proper assembly of this team should also provide advantages like:

• Seamless communication. When your advisors work collaboratively, they ensure your financial strategies are aligned across personal and business domains. For instance, your wealth manager helps define your post-exit financial needs, and your CPA structures the sale to meet those needs in the most tax-efficient way. Your business exit specialist helps position your business for sale while your CPA ensures financial records reflect its true full value.
• Holistic perspective. This team of advisors combines to provide a 360-degree view of your situation, considering both your business and personal goals. By doing so, every operational, financial, or strategic decision supports your broader vision.
• Proactive planning. By identifying potential challenges early, your advisory team helps you avoid costly mistakes. For instance, planning well ahead of a sale allows you to address tax liabilities, resolve financial inconsistencies, and maximize the value of your business.

5. Position Yourself for Success

Exiting a privately held business can be a very personal endeavor filled with many nuances as unique as the owners. Unlocking the full potential of your business journey requires planning and consideration of these actionable steps:

• Build your team. Find a trusted team of advisors that includes a wealth manager, a CPA, and a business exit specialist.
• Set clear goals. Define both your personal and business objectives early.
• Start planning now. Even if you’re years away from exiting, begin preparing with a focus on enhancing business value and financial efficiency, and adjust along the way as needed.
• Communicate regularly. Keep your advisors informed about changes in your business or personal circumstances to ensure strategies remain aligned.

Building such a team of advisors ensures you’re prepared for every stage of the journey. As a fee-only wealth advisor, we’re a great place to start in the creation of your team as our interests are completely aligned with yours. We have the expertise, experience, and connections to help you build your personal Wealth Plan and find the right team of advisors that can focus on you and your distinct business enterprise. Through their collaboration and expertise, you can stay focused on what you do best – leading your business to success.