Financial Advisory Practice For Sale

Exit Planning: Talk vs. Action

Owners are talking with advisors about exiting their businesses.

Are you one of them?


BEI conducted owner surveys in 2014 and 2016. In both, owners could pick as many responses as appropriate to complete the following statement: “To date, I have had at least one conversation about my plans to stay in/exit from my business with my ________.”

In 2014, 22% of owners said that they had talked to their spouses or significant others about exiting their businesses. Next on the list, at 9%, was “my business-owner friends.” Compare those response-getters to the professional experts:

CPA     11.79%

Financial planner/investment advisor     9.91%

Business consultant/coach     8.03%

Business lawyer     7.10%

That’s not a strong showing for those of us who make our living working with owners.


In only two years, we saw a huge change in the rates at which owners are talking to those same groups.


  1. Overall, owners in 2016 demonstrated a greater interest in at least discussing their exits than they did in 2014.
  2. Most owners (including non-boomers) are discussing their business exits with family, friends, and one or more advisors.
  3. If your clients are not talking to you about exiting, they may well be talking to another advisor.

Taking (Limited) Action

Our next question was, “What actions have you taken so far to prepare for your exit from your business?” We found that although more than half of owners had talked to an advisor about their exits, only 17% had created a written Exit Plan.

Owners responded that they had taken limited steps toward their exits, such as obtaining a valuation, hiring an employee to take over their responsibilities, calculating how much money they would need from the sale or transfer of their businesses, and dealing with ownership succession in their Estate Plans. Based on these steps, it’s safe to assume that owners tended to reach out to advisors who could address each specific need with their professional expertise (e.g., talking to a business consultant about training a successor). This means that owners tend to build their Exit Plans piecemeal rather than constructing a comprehensive Exit Plan with an Exit Planning Advisor.

For example, the survey results suggest that if owners indicated a desire to transfer ownership to a child at death, their Estate Planning attorneys created documents necessary to achieve that goal. There is no indication that the attorneys broadened the discussion or relationship to include lifetime Exit Planning tools, designs, or processes.

Similarly, owners who indicated a desire to sell their companies to key employees likely talked to business appraisers, which in some cases led to a business valuation. From a “typical” (i.e., non-Exit Planning) perspective, those appraisers acted professionally and consistently with their education, training, experience, and professional designation.

The same is true for the business-planning lawyers, financial advisors, and all other professionals who viewed their engagements with owners solely from their professional perspective. We have all been guilty of leaving owners to wander like explorers in uncharted territories, using trial and error to figure out how they will reach the exits they desire.

Seventeen Percent

Certainly, some owners are talking to advisors who know how to create comprehensive Exit Plans—maps charting the route from where those owners are to where they want to be. In fact, 17% have created written Exit Plans. They are the lucky few who have talked to advisors who understand that Exit Plans require contributions from more than one professional discipline.

Eighty-Three Percent

That leaves 83% of owners who are out wandering the Exit Planning wilderness. This is a huge opportunity for advisors wishing to be more proactive by asking their existing and prospective clients questions such as:

  • Are you confident in your ability to leave your business when you want, for the money you need, and to the person you choose?
    • If not, which steps are you considering to prepare for your exit?
  • What’s the biggest obstacle to your ability to leave your business on your terms?

Asking questions like these broadens the discussion with the owners you work with and leads to additional opportunities to represent them in what matters most—ensuring their business exits on their terms.

If you are going to talk to owners about their exit goals and plans, you need to be prepared to provide a comprehensive solution, one that extends beyond your area of professional expertise. Successful Exit Plans are the products of a group of advisors from various disciplines working together to reach a client’s goals. No one can create a successful Exit Plan alone, and everyone who understands Exit Planning has a deep appreciation of the value of other professional advisors.

Perhaps that’s why we work so well together.


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