Posts tagged with: exit strategist

How to Hire a Mentor Exit Strategist

It’s a big step to consider hiring an exit strategist. When you decide you want an exit strategist on your team, hire someone who will help reduce risks, maximize the value of your business, and prepare you and your business for sale or succession. Here are ten fundamentals to qualifying your ideal exit strategist.

Qualify Your Ideal Exit Strategist

  1. Hire someone who has done what you set out to do (e.g., launch a new product line, bring in $10M new revenue, streamline production to eliminate all late and lost jobs) to maximize the value of your business.
  2. Work with an advisor who has built businesses, has taken leadership, ownership, and accountability to get things done; hired the team and has risked everything themselves.
  3. Work with an advisor who teaches you more than one way to get things done, so you can customize the learning to you, your team and your company as you prepare for a transition/transaction.
  4. Work with a mentor who will sit with you to collaborate, rather than a consultant who keeps himself or herself apart. You need someone so engaged in your company and committed to your goals they are always thinking of better solutions for you, a virtual partner at your side.
  5. Work with an authority, someone who delivers specific ideas and solutions to run your business more effectively not just ‘If you fix this, your valuation will be higher’. Work with an authority who also offers training programs engaging your entire team to increase company valuation.
  6. Work with an advisor who is a peer, who has been in your shoes, and who teaches you at your level. You want a mentor who understands your size business, your industry, your challenges, who recognizes and values both your short-term and long-term objectives.
  7. Decide if you need a specialist in marketing/sales/service/HR/finances to solve a specific problem in one area; or if you want a mentor who will help you assess the entire operation to institute and/or refine business fundamentals to add value and leverage before you get to a transaction.
  8. Decide if you want to give away your core value to an outsider to get a task done; or if you want guidance and direction from a virtual partner who will help you integrate systems and strategies to take your whole company to the next level so you can achieve the financial success you know is possible.
  9. Decide if you want to hire a trainer to get you started in a specific skill set; or if you want to hire a mentor who will stick with you to achieve very specific results, in this case preparing for an exit on your terms, on your timeline.
  10. Do you need information that a one-time consultant will produce? Or do you need the ongoing insight, experience and expertise of an exit authority to turn information into knowledge you can integrate into your business, adding value every day?

Advisor Selection

The advisors you choose to surround you, in preparation and through the transaction process, directly impact the outcome you achieve. Know why each person is on your team, the value they add, and what they deliver. Hire the best you can find, not just the best ‘you can afford’.

Hiring the team you need to cash out on your terms is an investment that offers you a high return while reducing your risk to get there.

Use your exit strategist as a resource working with your advisors, integrating them effectively into your team, as the conductor of your orchestra (advisors) performing your symphony (exit plan).

Your exit strategist is central to ensure the success of you and your team of experts in any sale, scale or succession plan. Use these 10 fundamental qualifications to help you identify your ideal exit strategist.

Compare Your Exit Strategist, a Symphony Conductor and Tom Brady

In a news report this morning on CBS This Morning, Cultural Correspondent, Wynton Marsalis presented a piece called Symphony and Scrimmage comparing the central role that conductors and quarterbacks play. I couldn’t help but relate all that they have in common with the central role of your exit strategist. I have been using the analogy of the symphony conductor a lot this year. Look at the parallels between these two outstanding professionals, Tom Brady and Alan Gilbert, legends in their own fields. Look for the skills and results that you would want from the exit strategist at your side to achieve your optimum outcome.

Your Quarterback/Conductor

As Patriot’s quarterback, Tom Brady and New York Philharmonic conductor, Alan Gilbert related in the piece, the quarterback/conductor must:

  • Understand the function of every role
  • Have a sense of what every player is going through (every player on the field, every instrument and musician in the orchestra)
  • Not dictate how each person performs
  • Reacting  to how each person offers
  • Bring out excellence of every player on the field/every musician on stage
  • Know exactly what they are going for, what result they want from each player/performer

 To Achieve Your Exit Transaction/ Transition

Correspondant Wynton Marsalis explained that: “A well-balanced football team plays like a symphony orchestra. Their performance is a delicate balance….The professions are strikingly similar.” That delicate balance is imperative to achieve your exit transaction/transition.

To achieve their objective (winning a football championship/ delivering a world class performance of a symphony) the quarterback/conductor will:

  • Prepare extensively long before the team/orchestra is assembled to practice together
  • Constantly look at everything
  • Set the pace/tempo of the game/symphony
  • Synchronize the entire team/orchestra
  • Be one step ahead of everyone else, to control the present moment of play and see ahead/read the score ahead to queue the right player/musician to join at the right moment
  • Harmonize the mechanics of game play/movements of the symphony
  • Bring excellence, emotion and heart and timing to every game/symphony performance

Behind their perfect precision and finesse, is their ever present understanding of human fundamentals. Both of these world-class facilitators (Tom Brady and Alan Gilbert) said that the great thing about the football team/the orchestra is how they come together. The results defy belief, the parts together add up to something much bigger to excite the imagination. A sight to see.

Isn’t that what you want from your All-Star exit team?

Your Exit Strategist as Conductor of Your Orchestra

Review these lists of what a quarterback/conductor must do and will do to achieve those world class results consistently. Isn’t that the standard of coordination, cooperation, collaboration you want your exit strategist to bring to your all-star exit team, planning your exit strategy?

If you’d like to learn more about how Exit Strategists at This Way Out Group can facilitate your strategy and your team of exit advisors (your football team/your orchestra) to achieve your ideal exit, call or email me today.

Qualifying Questions For Your Exit Planning Virtual Partner

 

Virtual Partner – Exit Strategist

When you are ready to ask for exit planning help – how to get out, where do you turn for help? You need to know if they are dedicated exit strategists or is their primary business in a related field or expertise? Here are five questions to ask potential advisors to determine if they will focus on your best interests.

1.   What is your specialty? What is your core business?

You want an exit strategist whose focus is exclusively on your optimal exit, who is not distracted by other disciplines.

 2.   How will you charge me for exit planning services pre and post transaction?

You want to know you are being charged for exit planning expertise and exit planning time, not attorney time to do exit planning. You need an exit strategist on board, engaged in your situation years before you need your attorneys, accountants, and wealth and insurance advisors.

 3.   How engaged will you be in my operational implementation and transition up to the transaction?

Leading up to the transaction, licensed advisors will be focused on the expertise they bring to the table. Their availability will be limited to help you with operational decisions and issues leading up to the transaction. After the transaction, you will need your exit strategist engaged to ensure your total integration into your reinvention lifestyle, but after the transaction, licensed expert advisors will move on to the next transaction. How much will they/can they be there for you?

You want an exit strategist who will be fully engaged in operational implementation, growth and optimization strategies, and your own transformation from operational president/owner to the strategic CEO of a stronger more profitable enterprise, not just the 6-month end game.

 4. Will you help me assess exit options and timing/tax/liquidity impact of each?

You need an exit strategist to help facilitate discussions with all your exit advisors to integrate their recommendations and tradeoffs for each exit option you are considering. Any of your transaction experts who stay focused in their own silo of expertise cannot provide the wider perspective you need to make the best decisions.

 5. What will you do to assist me in determining my reinvention plan and my goals and lifestyle beyond the business exit?

All the licensed transaction experts you engage for their expertise can ask you all the right questions, but they expect you to prepare and deliver the answers on your own. You need an exit strategist who will assist you in developing your reinvention plan and lifestyle beyond the exit, test it, refine it and lay out a blueprint to implement it from Day 1 of your reinvention.

Whether you engage the Exit This Way Out Group as your virtual partner or not, you need to use the materials, checklists, tables and guidelines provided here on the site and in our home-study course to make your business a wealth producing machine that will provide the financial independence you dream of to fund your reinvention.

Titles and Teamwork

Titles are important to understand the specialties, experience, and expertise advisors bring to your exit team. For exit planning, the attorneys, accountants, valuation experts, growth experts, wealth advisors on your team must be specialists in helping you cash out to achieve your goals, your dreams.

You can hire coaches to ask good questions and keep you accountable for the work to be done to plan and execute on your exit strategy.

You can hire consultants who can do many things for you: market research, competitive research, improve your sales results or reduce expenses to increase your profit margins.

It is essential to surround yourself with a team of experts who can collaborate (not compete with each other) to fulfill your goals and objectives on your terms, on your timeline.

That’s where I come in as a strategist. Sure, I bring coaching and consulting to the table, but my function extends much farther into your exit team, your organization and your reinvention.

I’m a specialist in engineering how you get the wealth out of your business. I’m an expert on preparing you, your company and your team for your exit to achieve your dreams. I’ve been hired by corporate leaders, fast-track entrepreneurs, royalty, family businesses, and multi-millionaires, among others.

You need your CFO, M&A attorney, tax attorney, insurance broker, wealth advisor, business broker/M&A/Investment Banker. You need all of them to get the deal that best serves all your goals for the team, your company and your future reinvention.  They are transaction driven and work for closure. That’s their primary focus.

In contrast, my role as an exit strategist is to prepare you the owner, your business and your team for the transaction and transition in the years leading up to that milestone event, and developing your reinvention plan so it unfolds just as smoothly after the transaction event itself.

Titles aren’t everything. The licensed experts on your exit team don’t get paid to help you maximize the value of your business before the transaction. They don’t get into the business fundamentals, the growth strategies, cleaning up the financials, contingency planning, protecting IP, employee contracts to tie the team to the company beyond your departure, succession planning, protecting and preserving your wealth goals, minimizing both your tax concerns and the company’s tax impact.

They are your trusted advisors. They will advise you to do all of the above. And for a fee, they’ll work with you on these things outside their experience and expertise. But it’s not their bailiwick. The data proves that this approach is failing you, the CEO. Only a dismal 10% of all sellers (business owner/CEOs like you) EVER close the deal, and complete the transaction in this model.

It takes 2-5 years to prepare you, your team and your business to transition to what’s next, profitably. That’s why This Way Out Group exists. This is the support, integration, and facilitation that an exit strategist from This Way Out Group provides.

If you have any questions relating to exiting your business, please email me. I’d be happy to assist in whatever way I can.

Who’s On Your Exit Team? The Rest of The Team

In addition to the legal team you need around you as you prepare and execute your exit, you also need a wide range of other experts, including a financial team, transaction team, and other advisors, consultants, and experts to complete the sale and your transition to reinvention. Here’s the rest of the scope of expertise you want to assist you through this process.

Financial Experts

Business CPA – You need your business accountants putting the books in order for valuation and in a form that is buyer attractive, showing off the business in the best light.

Personal CPA – You need your personal accountant to focus on your own accounts, or accounts to be set up prior to the exit transaction.

Chief Financial Officer – Even if you’ve never had anyone in this role, you need a chief financial officer looking at the strategic financial impact of every marketing, financing, or growth decision leading up to your optimal exit option. Your CFO can bring valuable advice, expertise and insight to the process leading up to your exit. In addition, just by having a seasoned professional in the role adds value to the business that is appealing to prospective buyers.

Tax Advisor – You need your personal tax advisor to be an integral player in the discussions of your exit options to voice the tax impact on you of each choice and protect your long-term best interests.

Wealth Advisor – Your wealth advisor can help you fulfill your ultimate goals, live the lifestyle of your dreams, and leave a legacy and a dynasty. They can offer the best advice and opportunities if you include them in the discussions early – before you’ve made your exit choices. They can set up accounts in advance ready for you to utilize to maximum advantage at exit.

Transaction Experts

Depending on the size of your business, the type of business and the type of sale you are pursuing, you will want to use different transaction experts. They bring experience, connections, process and negotiating skills to the exit transaction that are irreplaceable for a successful exit.

Business Broker – A business broker assists buyers and sellers of privately held small businesses in the buying and selling process. They will value the business, advertise it for sale, interface with initial buyer inquiries and interviews, discussions, and negotiations. They facilitate due diligence and generally assist with the sale of the business.

M&A Advisors – Mergers and acquisitions is a specialized field of corporate strategy, finance and management dealing with the buying, selling, dividing and combining of different companies to help an entity grow rapidly in some way. M&A advisors, as a sub-niche of investment bankers, do not provide financing.

Investment Bankers – If your business is large enough and the exit transaction is large enough or complex, you may need to work with an investment banker. Investment banks assist in raising capital or acting as your agent to issue securities.

Others

Business Partners – Your partners, whether they are currently active or silent in the business, must be part of the exit planning discussions. Your final plan must consider their concerns and or they can destroy your whole exit.

Life Partners/Spouse/Family – Your business exit and your reinvention plans affect them too. Your exit must take these people into consideration too.

Exit Strategist – You need someone focused on the strategic side of planning, systematizing, growing the business , someone who will help prepare you to move into a more strategic role tell sell well and someone who will help you explore and prepare for your exit and reinvention. You need an exit strategist who works with you on all levels through the whole process, who can coordinate and facilitate your entire exit experts team.

Marketing Consultants – You may want to bring in other experts to maximize the value of the business to the buyer

Staffing Consultant – You may want to hire in key players/successors to make the business more attractive to the buyer

HR Consultant – An Human Resources consultant can help you formalize your corporate culture and tie your team to the company, beyond your exit to secure their future with the company under the new owner.

Schools Just Don’t Teach Comprehensive Early Exit Strategy Support

Schools just don’t teach this stuff, especially for private businesses. They focus on starting and running a strong profitable business, not how you’ll get out or how you’ll get your money out.

Most business owners only go through the exit experience once in a lifetime. They have no experience or hindsight to draw from to do this right.

There is only limited primary reference material available to teach CEOs how to plan and manage the business exit. The anecdotal lessons from CEOs’ personal exits reinforce the difficulties of exiting on your terms and on your timeline.

Comprehensive early exit strategy support is in short supply. Effectively executing your exit strategy requires collaborative teamwork from and with your expert advisors. You need to own the exit process as your top priority. An exit strategist can become your most trusted strategic advisor to achieve that end.

An entrepreneur who tries to continue running the company operationally and prepare the company for their profitable exit will do neither well. When you build an expert team, you can plan your exit to achieve your ultimate goal.

Qualifying Questions for Your Exit Strategist

How do you select an attorney? How do you select a CPA? How do you select an M&A Advisor or a banker?

For each member of your exit team you’re looking for experience, credibility, project management, confidentiality, communication, cooperation, a systematic process. That’s equally true for your exit strategist who will help you stay focused on your exit goals, explore your exit options and help you get out so you can move on to your reinvention (fka retirement).

For anyone who says they can do the exit planning piece for you, here are five core questions to make it clear to you what they will do for you.

  1. What is your specialty? What is your core business?
    Your current advisors probably do an excellent job of helping you build and grow the business, the objective when you hired them. Is their core business helping you exit or is it to fulfill some other core objectives for the company?
  2. How will you charge me for exit planning services pre and post transaction?
    If you engage your licensed expert (attorney, accountant, tax advisor, insurance broker, wealth advisor, business broker) to guide you through the exit process starting years before the transaction, how would they charge you for that new service? Would it be at the same rate as you currently pay them for their licensed expertise, or some other formula?
  3. How engaged will you be in my operational implementation and transition up to the transaction?
    You need to know if they will be telling you what to do or helping you complete those tasks to prepare the business for sale.
  4. Will you help me assess exit options and timing/tax/liquidity impact of each?
    The greater the lead-time, the more exit options you have. Will your advisor work with you 2-5 years in advance of your targeted exit to explore those options?
  5. What will you do to assist me in determining my reinvention plan and my goals and lifestyle beyond the business exit?
    You increase your likelihood of a successful and prosperous exit transaction when you have a clear reinvention plan spelled out of what’s next. Will your exit strategist assist you to explore opportunities and identify criteria, needs and goals that the business exit will allow you to achieve?

You need an exit strategist who is focused on you, your goals, your exit, your transition.

You want an exit strategist who has years of experience focused on exit planning and the strategic transition (not just the transaction).

Do your due diligence on every member of your exit team, starting with the quarterback – your exit strategist.

P.S.To avoid possible pitfalls that could potentially derail your exit transaction plans, get your team on board early. Please contact our office if you would like to discuss your objectives and timeline in confidence.

Hire a Mentor Exit Strategist

It’s a big step to decide that you will hire an exit strategist. When you decide you want an exit strategist on your team, you want to hire someone who will help maximize the value of your business and prepare your business for sale or succession. Here are ten fundamentals to qualifying your ideal exit strategist.

  1. Hire someone who has done what you set out to do (e.g., launch a new product line, bring in $10M new revenue, streamline production to eliminate all late and lost jobs) to maximize the value of your business.
  2. Work with an advisor who has built businesses, has taken leadership, ownership, and accountability to get things done; hired the team and has risked everything themselves.
  3. Work with an advisor who teaches you more than one way to get things done, so you can customize the learning to you, your team and your company.
  4. Work with a mentor who will sit with you to collaborate, rather than a consultant who keeps himself or herself apart. You need someone so engaged in your company and committed to your goals they are always thinking of better solutions for you.
  5. Work with an authority, someone who gives you ideas one-on-one to run your business more effectively. Work with an authority who also offers training programs you can provide to your entire team to increase company valuation.
  6. Work with an advisor who is a peer, who teaches you at your level. You want a mentor who understands your size business, your industry, your challenges, who recognizes and values your objectives.
  7. Decide if you want an expert in marketing/sales/service/HR/finances to solve a specific problem in one area; or if you want a mentor who will help you oversee the entire operation to institute and/or refine business fundamentals.
  8. Decide if you want to give away your core value to an outsider to get a task done; or if you want guidance and direction from a virtual partner who will help you integrate systems and strategies to take your whole company to the next level so you can achieve the financial success you know is possible.
  9. Decide if you want to hire a trainer to get you started in a specific skill set; or if you want to hire a mentor who will stick with you to achieve very specific results, in this case an exit on your terms, on your timeline.
  10. Do you need information that a one-time consultant will produce? Or do you need the ongoing insight, experience and expertise of an exit authority to turn information into knowledge you can integrate into your business, adding value every day?

Your exit advisor is central to your successful sale, scale or succession plan.These fundamental qualifications are essential.

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