As we step into the new year, advisors are poised to take their client relationships to new heights by becoming not just financial guides or legal experts, but trusted partners in every stage of their clients’ business journeys. One strategic approach to achieving this goal is to incorporate more comprehensive planning services into your advisory practice to help your owner clients with what they need most.

The Trusted Advisor Vision for 2024

In 2024, the role of an advisor extends beyond traditional financial planning. A trusted advisor is someone who is deeply invested in their clients’ success, understanding their unique needs, challenges, and aspirations. The goal is to forge a lasting relationship built on mutual trust and a shared commitment to achieving long-term business objectives. Ultimately, advisors know what steps need to be taken in order to grow and protect business value so that owners are in an opportune position to sell or transition from their business on their own terms when the time comes. 

The Significance of Exit Planning

Exit Planning is a comprehensive strategy aimed at helping business owners successfully transition out of their businesses. As a trusted advisor, integrating Exit Planning into your practice allows you to guide clients through the complex process of selling or transferring their businesses. By addressing critical aspects such as valuation, tax implications, and succession planning, you position yourself as an indispensable partner in their business journey.

For years, BEI has shared several ways for advisors to work with owners on a crucial aspect of the Exit Planning Process: increasing business value. Time and time again, advisors find that emphasizing the importance of transferable value – what a business is worth to a buyer without the owner’s presence and involvement in the business – is what drives a successful exit. Transferable vale can be increased by having strong value drivers, including: 

• Next-Level Management
• Operating Systems That Improve the Sustainability of Cash Flows
• Diversified Customer Base
• Proven Growth Strategy
• Recurring Revenue That Is Sustainable and Resistant to Commoditization
• Good and Improving Cash Flow
• Demonstrated Scalability
• Competitive Advantage
• Financial Foresight and Controls

Strong Value Drivers are what make a company a desirable acquisition to buyers as they inherently contribute to cash flow. However, in the years working with Exit Planning advisors in a variety of different speciality areas, we’ve concluded that advisors share a common goal of helping owners improve transferable value – regardless of the owner’s exit timeline or if the advisor is specifically helping craft an Exit Plan. 

Exit Planning at its core begins with determining an owner’s pressing goals and objectives and therefore progresses through each stage and phase with the owner at the forefront. However, depending on area of expertise and clientele demographics, the advisory services provided at your practice might need a more holistic approach vs. a beginning-to-end Exit Planning engagement. 

Owner-Based Planning: A Holistic Approach

Owner-Based Planning, BEI’s latest endeavor, takes a holistic approach by considering the personal and professional goals of the business owner. This involves aligning the business strategy with the owner’s financial and lifestyle objectives. By understanding your client’s vision for their future, you can tailor your advice to not only enhance the value of their business but also ensure that the transition aligns with their broader life goals.

In order to focus on the goals of the owner, the advisor must showcase effective strategies and tools to engage owners in planning, even if they are not solely focused on Exit Planning. BEI’s Owner-Based Planning aims to enable advisors to implement core service offerings more effectively while assisting the owners in initiating the planning process. 

The Resolution for Success in Your Advisory Practice

Adding Exit Planning or Owner-Based Planning to your advisory practice is more than just a strategic move—it’s a resolution to elevate your client relationships and contribute significantly to their success. Here’s how:

• Proactive Relationship Building: Engaging in Exit Planning allows you to start discussions about long-term goals early in the client relationship. This proactive approach demonstrates your commitment to their success, fostering a deeper and more meaningful partnership.
• Comprehensive Guidance: By offering comprehensive planning services, you become the go-to resource for all aspects of a business transition. From financial implications to personal aspirations, your guidance becomes indispensable in navigating the complexities of change.
• Value-Added Services: Incorporating these planning strategies into your practice positions you as a provider of value-added services. Your clients will appreciate the foresight and dedication to their success, solidifying your role as a trusted advisor.
• Overcoming Challenges: While there are a plethora of challenges an advisor might face or interpret when considering Exit Planning or Owner-Based Planning, many can be overcome with a mindset shift and a dedication to career growth. From a lack of budget and bandwidth to fee aversion and learning curves, many obstacles can be overcome with the right strategies and resources. By addressing budget concerns, simplifying the process, and emphasizing the benefits, advisors can successfully add Exit Planning or Owner-Based Planning to their practice and provide valuable services to business owners seeking to boost business value and  transition their business effectively. 

As we embrace 2024, let this be the year your advisory practice evolves into a dynamic force, guiding clients not just through financial decisions but through transformative business transitions. Exit Planning and Owner-Based Planning are not just tools; they are the building blocks of lasting, impactful relationships that transcend the traditional advisor-client dynamic. Elevate your practice, elevate your clients, and let success be the common resolution we strive for in the coming year.