The exit planning marketplace is changing with this new economy. I wanted to provides some insights as to my views on these current changes and how they may assist you with incorporating exit planning into your practice.
Having been in the exit planning field for 9 years, I have a unique perspective on this emerging marketplace. My company, Pinnacle Equity Solutions, not only provides education and training to advisors looking to incorporate exit planning into their practices, we also provide exit planning services for a select few business owner clients as well. And as we are slowing moving out of this recession, I see an increased interest and demand for exit planning services. And not just from business owners, but from advisors as well who want to learn more about exit planning and how it will help them grow their business.
The Marketplace of Exit Planning
There is no better time than now to get into this emerging field of exit planning. Although the economy may be slow to recover, the exit planning business is poised for tremendous growth. Baby Boomers are now coming to retirement age and are beginning to focus on what they need to be doing in order to protect their businesses as well as their wealth. They are 'awakening' to the idea that they need to get their equity out of their businesses.
I have often said that one of the largest obstacles to the exit planning business is the lack of context that an owner has in relation to how they should go about exiting. This is, in part, because up until recently, few if any advisors or consultants had chosen to focus on this area. Therefore, most owners do not know what it means to 'properly' exit their business or even what an exit plan truly is and what it can accomplish for their business succession. Business owners have not been educated on the importance of an exit plan. It is now the role of the advisor to begin these exit planning conversations and help guide business owners by implementing and executing a successful exit plan.
The Marketplace of Exiting Owners
Business owners today are more discriminating. They have been navigating through this challenging economy and have adjusted their budgeting process. Therefore, advisors need to provide a ‘genuine’ service. The marketplace has moved to a point of 'show me' instead of simply 'telling me'. This means that you need to approach the owners with a clear idea of what an investment in an exit plan (or at least an exit planning conversation) will mean to them. Without this type of impactful approach, most owners will not respond positively as it is still difficult for them to see the value in an 'exit planning exercise' without the advisor having a strong belief in the process and a way to message it to that owner.
Despite this obstacle, there remains no question that the marketplace for this service is picking up. In 2009, business owners were focused on survival, not an exit. But as we pass the half way mark of 2010, there is much more interest and demand for exit planning services. Most owners are beginning to feel that the worst of this recession is now behind them and that it’s time to plan for the future. I 've heard many comment on how they made it 'through this one' - meaning this most recent recession, but these owners do now want to go through the next one. This makes sense because these baby boomer owners will be in their '70s by the time the next recession hits. They need a plan, a solution, so they are in a position to successfully exit their business when and how they wish to do so. An exit plan empowers owners to do exactly this.
The Growing Marketplace of 'Exit Planning' Advisors
The objective for anyone who calls themselves an 'exit planner' should be the ability to provide solutions to the privately-held business owners that include an assessment of the owner's goals and enough objective and comprehensive information to allow that owner to make a fully informed decision relating to the exit from their business as well as the protection of their total wealth. Most importantly, advisors need to provide a process by which an owner can be guided towards the right decisions to have a successful exit.
In today's changing marketplace, it is essential for advisors to have the ability to sell exit plans with a 'proven' results-driven system and process that the business owner is looking for today. They need to have a comprehensive understanding of this marketplace as well as the ability to engage the business owner with these exit planning conversations.
I believe that one of the key essentials for true success in the exit planning field is to invest in a course of study and training. Expand upon your knowledge with all the available tools and resources and to begin networking and meeting with other advisors and consultants who have exit planning experience. Making all of these opportunities available to advisors around the country is Pinnacle's objective for our expansion in the 2nd half of 2010 . . . stay tuned for more exciting updates on these plans for expansion and how they can benefit your business.
The exit planning marketplace is changing with this new economy. Embrace these changes and prepare yourself to engage in this emerging field. Although exit planning is not 'new' anymore, it's still early in the game. There are many opportunities ahead as the marketplace continues to grow and business owners 'awake' to the idea of exit planning.
As always, I hope that this newsletter is helpful towards keeping you focused on exit planning and assisting you with putting it into your advisory practice.
Specializing in Business Exit Strategies, John M. Leonetti, Esq., M.S. Finance, CM&AA founded Pinnacle Equity Solutions to provide advisors with the tools they need to incorporate Business Exit Planning into their advisory practices. To learn more about John's Exit Strategy Services and to receive a FREE copy of his special report, "How To Incorporate Exit Strategies Into Your Advisory Practice", visit Pinnacle Equity Solutions