Building a business is hard work. It takes years of effort, commitment, planning, and execution to succeed — and hopefully, you take time to enjoy the ride along the way. But at some point, you will exit your business, either with a plan or without one.
Because an exit is inevitable, failing to plan for it can come at a cost, both financially and emotionally. The impact can extend beyond you, affecting your family and your employees. This is especially true given that your business is likely your most complex and valuable asset.
At Trust Point, which Emerj360 is a division of, we work with businesses and business owners every day. Our team brings the credentials, expertise, and experience to help owners like you plan a successful exit, whatever form it may take. Our focus is on helping you simplify and secure your wealth, so you can provide for and protect what matters most: your family, your employees, and your legacy.
Three Legs of the Stool
As Certified Exit Planning Advisors (CEPA®) and financial professionals, we help clients bring structure and clarity to the exit planning process. At its core, this means focusing on three areas — often called the “three legs of the exit planning stool”: (i) business readiness, (ii) personal financial readiness, and (iii) personal readiness. This framework simplifies a complex process and underscores the importance of a strong foundation in all three areas for a successful exit.
Business Readiness
A business often represents up to 80% of a business owner’s net worth. That’s why it’s important to work on the business — not just in it — to maximize value and transferability, even if an exit is years away.
Exit planning requires time, focus, and deliberate effort. It starts with a thorough assessment of the current state, a clear understanding of the owner’s goals, and a plan to bridge the gap between the two. The process may involve engaging key employees, reviewing company structures and processes, and taking steps such as obtaining a formal business valuation, conducting a value gap analysis, and completing a risk assessment.
Personal Financial Readiness
Because a business owners’ net worth is often concentrated in the business, it’s essential to have a plan for managing the proceeds from an eventual exit. These proceeds may need to support the owner for the rest of their life. With proper planning, they can also help achieve long-term goals, reflect personal values, and reduce stress and uncertainty for the owner and their family.
For many, an exit marks the first major step into public markets and diversified investing. Partnering with a seasoned professional can help ensure a smooth and successful transition.
Financial readiness involves planning across several areas, including tax strategy, estate planning, investment management, and legacy planning. At Trust Point, our team brings deep experience in all of these areas, and we work collaboratively to ensure our clients’ personal finances are positioned for the exit and beyond.
Personal Readiness
Personal readiness underpins all the other aspects of exit planning. While experienced advisors can guide the process and ask meaningful questions, only you can define what you want your life to look like after exiting your business. Ask yourself:
- Who are you outside of your business?
- What do you want the next chapter of your life to look like?
- How do you want to spend your time after exiting your business?
- Who do you want to spend your time with?
- What do you want your legacy to be?
These questions can be difficult and deeply personal. However, reflecting and working to answer them will help shape a financial strategy that supports your long-term goals and aligns with your values and sense of purpose after the exit.
Success Begins with Early Planning
Working in your business can consume all your time, making it easy to postpone long-term planning. This can be especially true when it comes to exit planning. It’s no surprise, then, that the most common mistake business owners make is not starting soon enough. This often leads to regret after an exit.
In fact, a report from the Exit Planning Institute found that 76% of business owners express regret within a year of exiting.
At Trust Point and Emerj360, we see exit planning as a long-term business strategy. We bring the right people together to determine the best course of action, and we put that plan to work.
The timeline for successful exit planning varies by business and owner. Generally, if the goal is to improve value and transferability, we recommend starting at least three to five years before the planned exit. This allows time to assess, set goals, and implement necessary improvements.
Once the business work is done, the focus shifts to the owner’s personal and financial readiness. Again, the earlier this planning begins, the better. Tax strategies and other personal financial tools may become unavailable as an exit nears. Based on our experience, business owners should start this process at least 18 to 24 months in advance. Though the early stages of exit planning can feel full of unknowns, one thing is certain: no one regrets starting early and being well-prepared.
Simplfy and Secure What Matters Most
Exiting your business is one of the most significant and personal transitions you’ll ever make. That’s why it deserves a thoughtful and proactive approach.
Our credentialed team coordinates the entire process, including financial, legal, estate planning, and family governance services. This enables us to build a cohesive strategy aligned with your goals and values, both for now and for future generations. Together with our clients, we plan not just for the transaction but for the long term.
While there is much to consider, selling your business should be an exciting step forward. With the right team and plan, you can move ahead with clarity and purpose. Even after the sale, the business you built can continue to support you, your family, and your future.
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By Trust Point Team Members Randy Van Rooyen, CFA®, CEPA®, Senior Vice President of Strategic Relationships & Jon Marquet, JD, CEPA®, Retirement Plan Consultant
