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What's Your Plan When Plans Change?

March 08, 2024

"The best-laid schemes of mice and men gang aft agley." -Robert Burns 

What should you do if a plan you made isn't working out? Let's look at how Exit Planning can position business owners to successfully adjust to changing conditions. 

Adjusting Over Abandoning 

Over the past few years, many business owners have learned that even their best plans can quickly go awry. This can lead to a temptation to abandon planning. However, there could be a better way. 

A major benefit of Exit Planning lies within its flexibility. This flexibility derives from a strict adherence to achieving an important goal: financial security for the business owner. This goal is the foundation on which you’ll pursue your other goals, such as when you leave your business, to whom you sell your business, and what you'd like to pursue after you no longer own the business. To do this successfully, the Exit Planning Process must be flexible. 

While achieving financial security is complex, the fact that every planning element moves toward achieving this goal regardless of the circumstances, injects simplicity and focus into the planning process. This can make it less devastating when something doesn't go precisely as planned, because there are multiple ways for business owners to achieve financial security rather than just one. 

Diversifying Strategies 

Almost every financial advisor and risk management expert will tell you that diversifying is a cornerstone of success. In Exit Planning, your Advisor Team will likely consist of a diverse array of professionals (e.g., lawyers, financial planners, CPAs/CAs) whose expertise can offer various strategies for success, along with backup plans. 

For example, you may begin the Exit Planning Process by pursuing a third-party sale because it can offer the quickest means by which to achieve financial security. However, you may discover that the quickest way to achieve financial security doesn't align with other goals, such as when a third-party buyer intends to shut down local operations and put employees you care about out of work. 

The Exit Planning Process could help you craft backup plans that align values-based goals with your financial security goal, which can better position you to exit on your terms. 

The diversity of your Advisor Team's expertise could help you see a fuller picture of what you want from your planning and how your planning can adjust to fit new wants and needs. Even when things don't go exactly as planned, you can still move forward without having to start all the way over. 

Planning That's Dynamic 

Like your business itself, Exit Planning is rarely static. It can evolve as your wants, needs, and desires evolve while still offering guardrails that prevent the plan from becoming scattershot or based too heavily on fads or fleeting emotions. 

That's because Exit Planning includes short-term goals, such as determining a business' current value, and longer goals, such as establishing next-level management teams and building additional business value. These goals often work with each other and affect each other fluidly.  

The depth of your Advisor Team's knowledge acts as the gears and mechanisms of a finely-tuned watch, which tells you where you are in your planning and what to expect. But like a finely-tuned watch that travels across a new time zone, your Advisor Team can adjust your planning when things change, allowing you to keep your eye on what you need to do to meet your goals. 

We strive to help business owners identify and prioritize their objectives with respect to their businesses, their employees, and their families. If you have questions on this topic, we can help with more information or a referral to another experienced professional. 

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial professional. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial professional. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need.

This is an opt-in newsletter published by Business Enterprise Institute, Inc., and presented to you by our firm.  We appreciate your interest.

Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.