What is the difference between exit planning, succession and transition planning?

In addition to exit planning, succession planning and transition planning are terms associated with an owner exiting a business. Exit planning is slightly different from succession planning because it could involve the sale of the business to a third party while succession/transition plans typically involves transferring the business to a family member or key employee.

When should a business owner begin to plan?

While a business owner can start the formal exit planning process at any time, planning far in advance, between 2-4 years, will significantly maximize the value to the company and business owner. At a minimum, an owner needs to consider:

  • Estimated timing of exiting/transitioning business which includes:
    • Anticipated time it will take to sell the business
    • Time it will take to transition their business to the buyer (post transaction)
  • Structure of transition (family member vs. third party)
  • Value of business and savings needed for retirement
  • Do I have the appropriate insurance coverage

By planning early, your Skoda Minotti Exit Planning Team can also create a contingency plan for unexpected circumstances, such as illness, burnout, divorce and death.

What Questions Should I Be Prepared to Answer?

Using our free, no obligation, Assessment your Skoda Minotti Value Acceleration/Exit Planning Team will walk you through a series of questions to determine your exit readiness. For example:

  • Have you determined an exit time-frame when you will be ready?
  • How much cash will you need to live on after exiting your business?
  • How much is your business worth today?
  • How can you ensure financial security for your family if the unexpected happens to you?

Questions? Contact Us:

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