Last week we asked our Advisor community, “What do you believe is the most important to a business owner during their exit?” Here are the results:
52% said Personal Planning
24% said Financial Planning
24% said Business Planning
EPI Vice President, Scott Snider, provides a deeper look into this question:
Total trick question! For those of you who are CEPAs you know the truth. None of these are the “most important” because they are equally important if a business owner wants to have a significant and fulfilling transition. At EPI, our organizing principle is what we call “Master Planning” or The Three Legs of the Stool. According to Walking To Destiny, Master Planning helps to maximize the value of the business by ensuring the owner is personally and financially prepared to maximize net proceeds and that they have a plan for what they will do next.
What is your Wealth Goal?
The process for exiting is driven by a wealth goal. The wealth goal is motivated by what the business owner wants to do personally in life, both now and after the sale of their company. Once the advisory team helps the owner establish those goals and their personal purpose, it allows the advisor to establish a wealth goal and identify the Wealth Gap. That Wealth Gap will be filled by the business. This begins a conversation around business planning and what the business is currently worth and what it could potentially be worth. The goal becomes driving value into the company to fill the wealth gap so the business owner can live their life and continue to hit their goals.
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