It’s critical that as an Exit Planning Advisor, you simplify the owner’s Exit Planning to-do list by having them start the process by writing their plans down. Written plans have major benefits if done properly and if the right items are included. 

Benefits of Written Plans in Exit Planning

Exit Planning Advisors know from experience how much their business owner clients have on their plate. From building business value to developing capable successors, to figuring out what they want to do once they leave their business, Exit Planning is often seen as a daunting task to business owners – one that is often overlooked or simply put off until “a later date. While it is a lot of work, Exit Planning isn’t something that business owners can push off or tackle on their own if they want to exit on their terms.   

It’s critical that as their most trusted advisor, you simplify the owner’s Exit Planning to-do list by having them start the process by writing their plans down. The act of writing down the Exit Plan can provide three potential benefits when done properly.  

Benefit #1: Increase Clarity, Accountability, & Opportunity for Success  

Conversations with business owners are crucial in learning your client’s goals and ambitions. However, encouraging them to take part in writing out their goals, resources, and desires will allow business owners to think critically and minimize misinterpretations. Eliminating misconceptions will lead to more clarity and consistency, which will likely cut down the length of the implementation period.  

Written plans also encourage accountability. The plan details the responsibilities of each participating member of the Advisor Team. The written plan tracks deadlines and holds everyone accountable for the tasks they need to complete to stay on track.  

Lastly, simply asking your clients to write down their goals increases the likelihood they’ll achieve them. There is proven power in handwritten goals. Dr. Gail Matthews, psychology professor at Dominican University in California, found in a 267-participant study on goal setting, that individuals are 42% more likely to achieve their goals just by writing them down as opposed to leaving them in their head.  

Benefit #2: Maintaining Control  

A written plan allows the business owner to keep control of the business until they are ready to give it up. It also simultaneously controls when and how they transition out of ownership. Owners who lean into writing clear and specific plans can easily pass on their plans to their Exit Planning Advisor to lead and execute with the Advisor Team.  

The more work the owner can put into the written plan upfront, the less work will be needed on their end when it comes to executing the process and the Exit Plan won’t necessarily need to be their primary focus. This increases planning efficiency and gives business owners the time they need to increase the company’s value. In addition, having written plans in place will control the perception that potential buyers might have because it will demonstrate a commitment to business vision and goals.  

Benefit #3: Minimizing Cost & Time  

In general, creating an Exit Plan takes several months, while the execution spans several years. Both creation and execution of an Exit Plan requires input from owners, their families, their management team, and all participating advisors. With so many moving parts, owners can oftentimes fall into a trap of spending more time and money than necessary to exit.  

Written Exit Plans help mitigate costs in terms of time and money.  

These written documents track everyone’s progress and pinpoint where bottlenecks might be occurring. . As the Exit Planning Advisor, you will wear many hats to relieve responsibility from the owner. Most importantly though, you will keep the plan current and be sure it is always reflective of the resources, goals, and assets relevant to the owner’s desired business exit. When all participating advisors are on the same page, the time and money spent on the process itself is often reduced.  

What to Include in a Written Exit Plan  

While the benefits of beginning the Exit Planning Process with a written plan are clear, your business owner clients may wonder what they should cover in their written plan.  

As their Exit Planning Advisor, and with the help of BEI tools and resources, you can provide them with assessments, templates and more that will specify what all is needed in a written plan. However, to get them thinking, you could suggest that they begin their plan with the following considerations:  

1. Incorporate Flexibility 

Owners may be hesitant to write down their plans because they might perceive that as meaning they are set in stone. Assure them that this is not the case because written Exit Plans can, and often do, change.  As business goals evolve, a written Exit Plan gives the planning strategies a chance to evolve in lockstep.  

2. Set Measurable Goals  

A key benefit to the owner of a written Exit Plan is the ability to pass on their responsibility to participating advisors. Assigning goals that are trackable ensures that each member of the Advisor Team has clear deliverables and a deadline to get it done. Being able to measure the results of goals is especially important when one goal is to protect and grow business value.  

3. Evaluate Business Value  

Does your client know what their business is worth today? Have they identified the best ways to increase the value and cash flow of their company? Having an answer to these questions provides insight into which strategies you can recommend as the Exit Planning Advisor.  

4. Protect Family & Business  

Be sure your clients include continuity plans to account for unforeseen circumstances and/or their temporary or permanent absence. It’s also crucial to consider what it would take to ensure the financial security of the owner, their family, and their business in these circumstances.  

5. Preferred Exit Path  

Does your client plan to transfer to insiders (family, co-owners, employees) or sell it to a third party? Regardless, mapping out the preferred exit path will help you advise your clients on what is feasible and what steps need to be taken to get there.  

As an Exit Planning Advisor, you will have the knowledge to articulate these benefits to your clients and get the ball rolling with getting your client’s thoughts on paper. While business owners are busy addressing today’s latest economic challenges, beginning the process with a written plan will ultimately allow them to exit on their desired terms. BEI has tools and resources that can prepare you to help your clients with a written plan to guide their business and their family through their business exit. Schedule a meeting with us today to learn more.  

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