Are You Financially Prepared for Your Exit?


[fname], what do you really want from your business exit?

As an exiting business owner, you likely do not adhere to the outdated model of 'sell my business. .invest the proceeds . . . retire'. There are far greater concerns that go into a properly planned exit strategy than simply the sale of the business and the 'leap off the cliff' into retirement.

In fact, many exiting owners want to know their options for exiting their business. There are many options for a business exit other than selling the business but an exiting owner first needs to know their own financial readiness for the exit. Without knowing your personal financial situation, it is impossible to examine options for your business exit. The reason is that not all options have the same probability of success. And a failed exit can be costly.

What Do You Want?

Have you taken time to consider what it is you really want from your business exit strategy? Or does the business of running your business prevent you from doing so?

Set aside time to reflect on why you started your business and what you would like to ultimately get from it. Your life's work is wrapped in your business. How you exit it is an essential piece of your overall life and wealth puzzle.

Have You Saved Enough to Make Your Exit a Reality?

The single greatest determinant in assessing your exit options is your personal financial readiness for your business exit.

Questions to ask to get started include:

How much have I personally saved outside of the business to prepare myself for the exit that I am considering?

What is my business worth if I exit according to my current plan?

At the closing, will I know the tax impact to the check that I am being handed?

At the closing, will I know the advisory fees that I need to pay?

What amount of investable assets would I be comfortable with in my account to support my post-exit lifestyle?

How much risk do I want to take with those investable assets to generate a return that will satisfy my post-exit lifestyle?

High or Low Financial Readiness

An exiting owner who has saved diligently and has amassed personal savings (and retirement savings) accounts that can satisfy their post-exit lifestyle has a High financial readiness for a business exit.

On the other hand, an exiting owner who has put most of the profits of the business back into running and growing the business will have little saved on a personal level and will have a Low financial readiness for a business exit.

An owner with a High financial readiness has many options available to them for an exit strategy plan. Internal transfers can be considered because the exiting owner is financially stable and can afford the exit of her choice. This exit may include a transfer to family, key employees, or even co-owners in the business. Because this exiting owner can withstand a lower value or even a contingent receipt of proceeds from the exit these options become available and can be considered.


It may well turn out that a successful internal transfer yields more after-tax, after-fee proceeds to an exiting owner. In addition, the exiting owner can depart from the business over a number of years in a controlled manner. These attributes are generally not available in the Sale of a business.

Low Financial Readiness

The exiting owner who has not saved money outside of the business will have most of their net worth tied up in the business. In order to 'realize' this wealth, the business likely needs to be sold to a buyer for the highest price. In this case, the exiting owner needs to get the highest price to supplement their modest level of savings on the personal side. Here, a controlled and phased exit is unlikely available as an option.

Alternatively, what is also likely available is a 'stay and grow' approach towards the future business exit. In this case, the exiting owner is matching the growth objectives for the business with their personal exit strategy planning goals and setting the intention of 'growing the business into their exit'.


This simply means that the exiting owner will either establish more vehicles for personal savings over the years leading up to the eventual exit, or this owner will grow the business to a value where it can be sold for a price that will meet the owner's future post-exit lifestyle. In either case, this exiting owner will likely have fewer exit options available to them today.

Start Your Planning Today

Whether you have been a very good saver on the personal side, or whether you need to plan for a future exit at a higher value, you should begin establishing your exit strategy plan today. In doing so, you are making a plan for the protection of your wealth and you will make adjustments to your business as you begin moving forward with your plan.

Remember that your 'sweat equity' is tied up in your privately-held business. And without a pro-active plan for protecting that wealth, you leave that business wealth exposed.


As always if you need some advice, you're welcome to email me of call me here at the office at 281-993-4530.


Regards, Charlie


Charles Wilson, CPA/CFF, CGMA, CBEC

Charles Wilson, LLC

307 S. Friendswood Dr, Ste B-2
Friendswood, TX 77546
281-993-4530 (O)
866-567-3975 (F)





Charles Wilson, CPA/CFF, CGMA, CBEC is a Certified Business Exit Consultant and is affiliated with Pinnacle Equity Solutions, Inc., an Exit Strategies Training and Solutions company.  Parts of the content in this email are taken from previous Pinnacle Equity Solutions, Inc's. newsletter library and website in accordance with Charles Wilson's certification in Pinnacle's Certification and Membership Program. All Copyrights are the properties of Pinnacle Equity Solutions, Inc. and Charles Wilson, LLC and their respective owners.