Planning Your Clients’ Exit Strategy

by Robert Hopper, CPA, partner, Sax LLP | Feb 15, 2018

One of the most important functions we have as our clients' trusted business advisor is to help them navigate through and plan for their exit strategy. Exit strategies take many forms and could be needed for various reasons – company leaders could decide to sell the business, there could be a health or family crisis that prevents a leader in a company from continuing to lead, or it comes time for retirement.  An exit strategy ensures the health and continued stability of a company if this transition arises and solidifies the method in which a business leader can cash out and move on from the company. This process is usually overlooked because of the immediate needs of the company.

One overall approach that is important to take with clients is to get them in the mindset of “always ready and prepared to sell their business”.  Why do we say that?  Think about it, when you finally make the decision to sell your home, what do you do?  You compile a list of items to fix or replace that you should have done while you owned the home. This is the same for a business. 

Whatever the intended end-goal or objective for a company, there should be a dialogue, overall understanding between leaders and a strategic plan in place to reach it.  Further, here are some items that should be considered when formulating an exit strategy:

  • Is there enough financial wealth that the business can be transferred to others?
  • Are other family members and/or leaders capable of running the business?
  • Has there been an estate plan that accomplished the transfer of ownership in a low tax efficient manner?
  • Can a deal be structured that would enable an owner to have sufficient cash flow when they walk away from the business?
  • Are there any other reasons why it is critical that the owner maintains contact with the company such as customer transition, vendor transition, or manages other key contacts?

An exit strategy is a work in progress, and never static depending on the status of the company and the ever-changing goals of leadership. The plan should indeed be structured sooner than later to secure the intended future of the company, and it should be evaluated on a yearly basis.


Robert F. Hopper

Robert F. Hopper

Bob Hopper is the Partner-in-Charge of Sax’s Manufacturing and Distribution Practice, and provides accounting, tax and consulting services to a wide variety of clients. He specializes in helping business owners grow their business, identify issues, and increase efficiencies to be as high-performing as possible.

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