The Most Effective Succession Planning Starting Point

Now more than ever before, business owners are thinking about their business exits. According to The BEI 2016 Business Owner Survey , 79% of business owners want to exit their businesses within 10 years , and 57% of owners want to exit within the next five years. However, business owners and their advisors face two challenges to achieving this goal.

Challenge #1

Many business owners say that they are reluctant to initiate a discussion with their advisors about Exit Planning because they don’t think their advisors can help. This misperception often stems from the assumption that one advisor needs to do it all, which is never the case with a properly crafted Exit Plan . Fortunately, BEI provides a host of marketing and client-education tools to its Members that help advisors successfully overcome that misperception.

Challenge #2

While many baby-boomer business owners say that they want to exit in 5–10 years, it’s likely that they said the same thing 5–10 years ago, and 5–10 years before that, too. And if you ask them when they’d like to exit five years from today, they’ll likely say, “Oh, in about 5–10 years.” This rolling five-year Exit Plan is common among even the most ambitious business owners.

The cause of this rolling five-year Exit Plan stems from the problem of fuzzy goals —theoretical ideas that cannot be acted on—which we will explain and help solve in this post.

Fuzzy Goals, Directionless Owners

Fuzzy goals, especially related to a business owner’s exit date, provide cover for owners who are reluctant to make the decisions that drive action. Thus, it’s important for advisors to be persistent, perhaps insistent, when working with owners to develop actionable goals.

Consider the following example of a conversation between Wilbur, a business owner, and Joelle, his CPA and newly minted Exit Planning Advisor. Because it was tax season, Wilbur set an appointment with Joelle to discuss his taxes, and after they finished, Joelle asked Wilbur, “Have you given thought to someday leaving your business?”

“Funny you should ask,” Wilbur said. “I have. I think I’d like to exit in about five years.”

Joelle’s eyes lit up. “Great!” she said. “I can help with that. Are you interested in moving forward?”

Wilbur paused. “Well, not right now,” he said. “I’ve got a pretty full plate. Let’s talk about it the next time we meet.”

By failing to persist, Joelle could not help Wilbur with his Exit Plan. Instead, Wilbur’s nebulous idea of a departure date allowed him to procrastinate, perhaps for years. Barring some life-changing event, Wilbur isn’t likely to wake up one morning, call Joelle, and say, “Let’s set some specific goals for my exit and start acting to achieve them!” Joelle and Wilbur both missed an opportunity because Joelle did not take the first step. But what is the first step?

The First Step in Exit Planning

Let’s return to this same discussion to see how Joelle could have helped Wilbur by taking the first step. Again, after meeting with Joelle to discuss his taxes during tax season, Wilbur expressed interest in exiting in five years.

“Great!” Joelle said. “I can help with that. Five years from now is April 1, 2023.”

“No fooling . . .” Wilbur said.

“Yes, and having a date in mind is one of the best places to start ,” Joelle said. “Now, in order to exit by April 2023, we need to know a bit about your income. Do you know how much income you spend now?”

This is now a very different conversation: Joelle has planted a seed in Wilbur’s head. Wilbur’s exit date is no longer a floating, distant, five-years-from-now event. Instead, it is April 1, 2023. But what happens if Wilbur still chooses to postpone any discussion of his business exit —which is a common occurrence for Exit Planning Advisors—until their next meeting, six months later?

Addressing Owner Resistance

When it comes to Exit Planning, advisors often need to be persistent in their persistence. Let’s look at how the goal-setting conversation required Joelle to continue persisting with an interested but unsure Wilbur.

“How much I spend now?” Wilbur repeated. “Sure, I have good guess.”

Joelle paused for a moment, then spoke. “Wilbur, I’m not really comfortable using an off-the-cuff estimate to calculate something as important as your business exit. I’d like to get an accurate estimate before we move forward, since what you have now affects what we need to do get you financially secure.”

“That’s a good point,” Wilbur began, “but right now, I’ve got a pretty full plate. Can we talk about all this next time we meet? Say, six months?”

Joelle knew that the only way to assure that Wilbur followed through was to set a date to discuss.

“Yes, we can. Let’s schedule that meeting today. I’ll send you a rundown of the information I’ll need from you, then two weeks prior to our meeting, I’ll send you an agenda.”

One day after their initial meeting, Joelle sent Wilbur her rundown. Two weeks before their next meeting, she sent him an agenda. Meanwhile, she hadn’t heard from Wilbur, other than to receive two emails that said, “Thanks for sending this. I’ll get on it ASAP.”

On the day of their second meeting, Joelle was relieved to see Wilbur walk in her office with a stack of papers. After exchanging pleasantries, Joelle began the meeting.

“Wilbur, the last time we talked, you decided to exit on April 1, 2023, which is four-and-a-half years from now.”

“That’s right,” Wilbur said. “And I went through the income I think I have, but I’m not sure whether this is right.” He began spreading papers on Joelle’s desk. “Basically, I thought I had a lot more than I do , and I’m worried maybe I’m doing something wrong.”

Joelle nodded. “Wilbur, I think the best thing for us to do is figure out how much income you’ll need when you leave to maintain the lifestyle you want when you exit.”

“I’m not sure how to do that,” Wilbur said sheepishly.

Related: The Golden Rule of Successful Succession Plans

“Your financial planner can help us make that calculation,” Joelle responded. “Would it be OK if I called her to ask her to help us make an accurate estimate?”

“Definitely,” Wilbur said. “I’d appreciate that.”

“And once we get that number, you and I can start to talk about the goals you’ll need to set to get there.”

“That sounds great,” Wilbur said, looking more relieved.


The most common obstacle to Exit Planning, for business owners and advisors, is owner reluctance to set specific goals. But specific goals are actionable and elicit action from owners. That’s why it’s so important for Exit Planning Advisors to be persistent with business owners interested in exiting.

Starting and maintaining a business, and exiting a business share a major similarity: Fuzzy goals in both cases are often the root cause of failure. Successful business owners know the importance of actionable goals when they start the business. Now, it’s up to Exit Planning Advisors to show them that the same is true of their business exits , and reap the rewards.