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Sponsored by: Altus Exit Strategies
Updated: January 15, 2024

Altus Exit Strategies — Plan your exit. Realize your future.


Q: How Do You Begin with Exit Planning?

A: As skilled and as successful as most business owners are, they cannot create and execute their own Exit Plans. Those owners who do attempt to craft their own Exit Plans usually fail and, at best, they leave a lot on the table: a lot of money, time and/or their own happiness.

Provided photo
David V. Jean, CPA, CCIFP, CExP — Director, Altus Exit Strategies, LLC

For your Exit Plan to succeed, you need legal expertise, financial advice, tax planning, financial advisory input, and often, consulting ideas. If you decide to sell to a third party, you may require the services of a Business Broker or Investment Banker. 

First, owners should retain a valuation expert to perform an estimate of the company’s value to find out what it is actually worth. Regardless of the state of the M&A market, best guesses and educated opinions on the range of value for the business are nice, but they are weak foundations for Exit Planning. If you plan to sell to a family member, co-owner, ESOP,or employee, retain a certified business appraiser. If you foresee a sale to a third party, ask a business broker or investment banker for a “sale-price estimate.” 

Second, owners should sit down with their financial advisors to figure out how much cash they will need to support the post-exit lifestyles they desire. Tapping into the expertise of a financial advisor to help objectively analyze an owner’s future needs and make realistic, risk-sensitive assumptions about investment rates of return is paramount.

Q: Why Set Exit Goals Before You’re Ready to Exit?

A: The three primary exit objectives you must set are:

1. On what date do you want to exit your company?

2. Do you want an outside third party or insiders (key employees, children, ESOP) to succeed you?

3. How much cash will you need from the sale of the company to enjoy a financially secure post business life?

It is inappropriate to suggest that you, the creator of a business, should exit before you choose. But the cold reality is that most owners need to grow the value of their business significantly in order to exit with the lifetime income they desire, and that growing value takes time.

Therefore, knowing the size of the gap between your company’s value today and the value necessary for you to retire comfortably is the starting point for all planning. It dispels the tendency to procrastinate under the mistaken assumption that planning and action can be delayed and prompts many owners to take immediate action to grow and preserve value.

Q: How can you best navigate the early stages of Exit Planning? 

A: Exit planning begins when owners understand their ultimate objectives and what they have to do to reach them.

Be Prepared for a Collaborative Process: As you consider planning your exit, you’ll gather advice and strategies from several different business advisors on your Advisor Team. That’s because you’ll likely have several goals that you’ll want to achieve, and the experts who can help you approach those goals tend to span several professions. 

Remember That You Are in the Driver’s Seat: While the advisors on your Advisor Team will use their expertise to address your wants and needs, they will not tell you what your wants and needs are. When it comes to your business and goals, you are the expert. A properly crafted Exit Plan addresses your concerns, establishes your priorities, and achieves your objectives and aspirations. You should feel comfortable saying what you want to achieve, and let your advisors determine whether and how it’s achievable.

Don’t Get Ahead of Yourself: It’s easy to get caught up with how many exit strategies are available to you at the outset. Before you choose an Exit Path or settle on a planning technique to achieve a particular goal, your Advisor Team will evaluate your priorities and the resources available to you. Only after that review should they start to identify solutions. This will help prevent you from addressing problems that don’t exist. It can also help you identify unrecognized problems and needs.

Keep in Mind that Exit Planning Is a Process: Some business owners get intimidated by how involved Exit Planning seems from a big-picture standpoint. It’s important to remember that Exit Planning is a process that typically spans years between the first identification of your goals and the results from all implemented solutions. Your Advisor Team can help you take specific actions to address the things that need to be addressed, in the order that makes the most sense.