The Factors that Shape Your Succession and Exit Transition Plan

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Preparing your exit transition plan from your business takes a great deal of forethought, analysis, and
often outside expert counsel. Business owners often underestimate the time
involved in the succession planning process, and because of that, the intention
to ‘retire in a few years’ gets passed by. What’s needed is a clear business
exit strategy, with defined goals at specific junctures. 

Preparing your business exit transition plan is essentially creating the plan for finalizing your
official status with the business, and wrapping up your full involvement in the

Once you fully commit to this
strategy, you will see yourself starting to make different decisions around the
company’s operation. 

You may start to delegate more of
the nuts and bolts of operational aspects to others in the company. You may step
back from hand-holding certain clients. You may inspire others to create new
products to carry the company forward after you leave the firm. You may start
to consider the aspects of selling your business at a high valuation

It is 2021. Over 50% of baby
boomer business owners are 64 or older, and three-quarters or more of their
wealth is tied to their businesses. According to the Exit Planning Institute,
about half of these business
owners are looking to exit
 from their businesses in the next
five years.  

If you are over 65 and thinking of
your transition into retirement in five years, the time is now to start
planning a transition exit plan. It will take this amount of time to analyze
all the different aspects of a successful transition. 

The Key Factors
in a Succession and exit transition plan

Some of the key factors involved
in a successful business exit transition plan involve knowing the answers to a set of
personal and business questions. 

First, there are personal
questions that should be thought through and answered:

  • Where are you in your life plan? What’s Next? In 5 yrs? and 10 yrs? 
  • Do you have the right people in place to continue the legacy of
    your business? 

  • What retirement wealth plans need to be fulfilled in a transition?

There are business transition
questions, like:

  • What are my options for transitioning the business? Who is the
    right next leader?

  • What is the business worth today? How does this fulfill your
    retirement plans?

  • How does one prepare a business for an exit transition plan? 

Your age may be another
consideration. You’ve heard baby boomers say “Age is just a way of keeping
score” and similar phrases. And it’s true. Your energy, ideas, vitality, and
enthusiasm for your business count for a lot more than the number on your driver’s
license. It’s crucial to determine the answers to these questions when
determining your next steps. 

The Timing

The stock market is strong. Your
business revenues are up. You ask yourself, “Can it last forever?” To those of
us who aren’t Jeff Bezos, the answer is no, it can’t. That’s why keep abreast
of market conditions for a potential transition or sale should be top of mind
for business owners.

A 2018 UBS Bank report on business
ownership found that more than 40% of business owners expected to
leave their business in the following five years. The pandemic of 2020 may have
hastened the plans for some of them. But as these business owners are getting
close to retirement age, they are feeling the pulse for a new chapter in their

But selling the business in the
right market with strong financial headwinds is important to them too. The
report found that among the business owners who were considering an exit, more
than half of them planned to sell their businesses, and another 20% hoped to
leave the business to family members. Less than 20% planned to close the
business and another 10% were unsure of their plans. 

If you have been building growing
value and revenues in your business, and you’re looking ahead to that next
phase in your life, then it’s time to look at succession planning. Succession
planning is a good business strategy for always being ready for what’s next! 


You may have certain stock option
plans that kick in at a certain age. Your revenue targets may be on track for a
successful windfall. These are the factors that can shape your exit strategy
and determine your next steps in moving away from the business and handing it
off to your management team. 

Freedom for the

Many business owners, when in
their later ages, on the back nine, start to feel the tug of a more restful
lifestyle, warmer climates, or perhaps a full change of life into retirement.
To those, this is a certain type of freedom.  
Age plays a large part in these
feelings. Your body may be slowing down, and you find you are a little less
tolerant of the stresses or the daily fires of a business.  

Planning for

A successful transition means
preparing the person and the business for a transition in leadership and/or
ownership. If a sale is part of the transition plan, a well-organized business
transition strategy becomes an asset, often adding higher value to the selling
price and greatly reducing risk for the buyer. This increase in value adds
greater wealth to retirement accounts reduces the time to transition a business
to the right buyer, and creates more sustainable businesses to carry on the
legacies of the founders.   

If you are a CEO or founder of a
successful business and are beginning to think about your personal and business exit transition plan,
 then call us at Value Growth Partners.  We would be happy
to share best practices to assist you in developing your unique personal and
business transition strategy. Call us at (312) 525-8382 or learn more on our website.

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