A team of advisors brings broader perspective to exit planning process

Published September 5, 2018

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I am planning to exit my business in the next 3-5 years, and I’ve got my attorney assisting me in the process. Should I bring in more experts as I progress toward my exit date?

In our experience, exit planning is often a more complex task than many of our clients anticipate at the outset. In addition to setting your own exit goals and an ultimate passing of the torch, you’ll attempt to build business value, find an appropriate successor or buyer, navigate complicated tax implications, and keep your key employees onboard. That is only a small part of the checklist. With so many things to consider, and a multitude of angles to consider them from, you may want to consider creating a team of advisors to assist.

Simply put, no single advisor has enough specialized expertise to create and implement an entire exit plan. To give yourself the best chance to exit your business on your terms, you’ll likely require the services of several advisors from different fields. These may include a CPA, a financial advisor, a business lawyer, an estate planning lawyer, an insurance professional, a business valuation specialist, and an exit planning advisor. Depending on the size and complexity of your business, and the requirements you set to consider your exit successful, you may need anywhere from two to seven different advisors. That’s normal, and the diversity of expertise will work to your benefit.

Current advisors

As a successful business owner, you likely have advisors you work with and trust already. Creating an advisor team does not mean you must get rid of those advisors. In fact, if your current advisors have the skill and expertise to address issues about your business exit, it’s usually a good idea to include them. Their institutional expertise and experience with your business likely puts them a step ahead.

Advisor qualities

Although the advisors on your team will have different responsibilities—and thus different ways to judge whether they’re productive team members—there are a few general qualities to look for as you fill out a team. Ideally, you want the best of the best. You want known experts taking on the specific tasks or transactional issues in their respective fields. You also want collaborators. A good advisor will play well with others, so to speak, by contributing to group discussions, providing constructive feedback and listening well to both you and the other members on your team. They should have a track record of meeting deadlines and being communicative, and should be open to learning more about you, your business, and the other processes involved in a successful exit.

Ultimately, they should also be dedicated, and willing to put in the time necessary to ensure not just an on-time exit, but a successful one for all parties. Brainstorming with the team is a necessity. Spending time with the team will provide priorities and a sense of balance, and it shouldn’t be put aside in a crunch.

The right fit

There are several ways to construct a team of advisors. We recommend starting with someone that specializes in business exit planning. The team should also include your CPA, attorney and banker. Ask them for recommendations on any gaps in expertise that may currently exist. You can also ask your friends or friendly competitors but be sure to conduct your own interviews and check outside references.

For our clients, we adhere to the philosophy that business owners have the best chance of exiting their businesses successfully when they consult with multiple advisors with proven track records. If you have your eyes on a business exit, start building your own team of advisors sooner rather later. They will be critical to making your exit a successful one, for both you and your business.

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