“At any given time, 40 percent of U.S. businesses are facing the transfer of ownership issue.”
The Benefit to the Visiting Advisor
Business Exit Timing, LLC can help your independent practice or firm attract new business owner clients and/or retain existing ones by adding an exclusive suite of Business Exit Plan products to your menu of client services. This expertise will better position your practice to accommodate the wave of family business ownership transitions expected to occur over the next 10 to 15 years. Our team of professionals will assist with the development of comprehensive written Business Exit Plans using BET’s proprietary 6-Step Business Exit Planning Process™.
We offer two types of strategic relationships with other professional advisors, including estate planning and business attorneys, CPAs, private client bankers and investment managers.
BETiming can serve as a member of your client’s advisory team with the responsibility to design and help implement a Business Exit Plan. Your client is directly invoiced for the payment of our fees.
BETiming can serve as a consultant to a trusted advisor on the client’s advisor team. Our fees would be invoiced to that advisor’s practice or firm.
What is a Business Exit Plan (BEP)?
A Business Exit Plan is a comprehensive written road map designed to help owners successfully exit their business on their terms and their schedule, not someone else’s.
The BEP addresses all of the business, personal, tax and financial questions applicable to selling a business to an outside third party or transitioning the business inside to the next generation, a co-owner or key employee(s).
The BEP includes contingency planning—expecting the unexpected—for the owner and the owner’s family in the case of a prolonged illness, permanent disability or a premature death. It also protects the company from financial devastation caused by the death or disability of a co-owner or key employee.
A Business Exit Plan’s ultimate purpose is to maximize the value of the business at the time of exit, minimize taxes, mitigate risk exposure, plan for unforeseen contingencies, and ensure a timely exit with the owner realizing their personal and financial goals.
Are you ready for the Tsunami?
Beginning in 2006, Baby Boomers (people born between 1946 and 1964) began turning age 60 at the rate of 8,000 per day. This trend will continue through 2024, creating the most significant generational transfer of wealth in the history of our country.
Robert Avery, economist and demographic expert at Cornell University, predicts Baby Boomers will transfer $10 trillion in wealth to later generations. According to Avery, “the majority of Boomer wealth is held in 12 million privately-owned businesses of which more than 70% are expected to change hands within the next 10 to 15 years.
This phenomenon has created a literal tsunami of Baby Boomer business owners intent on exiting their businesses within the next 10 to 15 years.
Why is this important to you as a professional advisor?
As their trusted advisor, your current Boomer business owners will look to you for the help they need to successfully exit their business. If you cannot provide a comprehensive, customized, written Business Exit Plan, they may be forced to go elsewhere (to your competitors) for the help they need.
Case in Point–Do Not Let This Happen To You
An inability to retain business-owner clients has similar symptoms to high blood pressure—most of the time you don’t feel it but, in the end, it can kill you.
A partner of a prestigious law firm had the experience of reading about a recent ownership change of one of his firm’s valued high net worth clients in the local business journal. This news served as a bit of a revelation.
The client was a beverage distribution company that had retained the law firm since its formative years, beginning with one truck, until the change in ownership with a fleet of trucks. Though the business owner relied on the lawyer’s counsel for select business operating matters, he engaged a different advisor to help with exiting his company.
When asked why, the business owner simply did not believe that his original law firm had a procedure in place to successfully guide him through a comprehensive exit planning process. Unfortunately, the original law firm was not able to maintain a relationship with the company beyond the transfer of ownership and estimated that they lost over $200,000 in annual reccurring revenue. This is not an isolated incident and it is one that takes place with increasing frequency. More and more Boomers are contemplating an exit or transition of their businesses in anticipation of retirement or the beginning of a new phase in their lives.
Deliver With Confidence
Whether you are a lawyer, CPA, trust officer or a wealth manager, the lesson here is obvious. Though developing new business owner relationships is important to the future of any advisory business, of equal importance is maintaining relationships with existing business owner clients. To be successful, this needs to be accomplished at every stage of the business life cycle and especially at the transfer of ownership.
Let BETiming keep you in the driver’s seat by developing a comprehensive Business Exit Plan for your valued high net worth business owner clients.