Expanded Services for Business Owner Clients

Recently I earned a credential as a Certified Exit Planning Advisor (CEPA®). The thought of getting this credential came to me when I start to identify the commonality among business owner clients across different industries and different stages of life  – most business owners view their business primarily as a source of income that support their lifestyle before retirement, and because of how busy they are with day to day operation of the business, most have not given much consideration of the eventual exit from the business and how to monetize all the wealth that have been locked in the business until when they feel ready to retire. I can totally relate growing up in a business owner family and now having my own business, however, the lack of planning could lead to a lower-than-expected selling price (happening 75% of times) or not being able to sell the business at all (70-80% of times according to research) when business owners actually start trying to sell the business. The business is supposed to be one of the largest assets in business owner’s profile especially if you have been reinvesting into the business over time. But more often than not, I found business owner clients would either talk about their business as a separate subject from the rest of their financial plan or simply giving a rough number that they believe the business will be sold for when we are working on their comprehensive financial plan, but a wrong estimate of the value of the business will significantly distort the financial planning result and at the same time, the transition of business is tightly related to all the other financial planning subjects such as risk management, investment management, retirement management, estate planning, and tax planning. So I would like to expand my personal financial planning services to business owners to include exit planning for their business (as needed).

Apart from our existing services to business owner clients, I would like to help clients to be more prepared and proactive in terms of optimizing the sale of their businesses to better reach their financial goals. Our enhanced services for business owner clients will be a combination of our existing financial planning services with The Value Acceleration Methodology™ introduced in Certified Exit Planning Advisor (CEPA®) program offered a methodology to advise business owners with a value management system focusing on what you can do right now to building a business that has characteristics that drive your business valuation up based on how buyers evaluate your business at the time of sale. As we integrate this into the owner’s personal and financial objectives, it will allow us to help business owner clients preparing for exiting while growing their business instead of waiting till the last minute, which will introduce business owners to more potential options to exit on the owner’s timeline and terms. In the process, we will also introduce to business owners how appraisers value your business, how your financial data will be adjusted during valuation to reflect the true business’ value and earning potential, how the valuation multiples of your business are determined (the private market decide the range of the multiple, but what determines where you are in that range), how to increase the intangible value of your business, different types of valuation method, and different types of business sales as well as different types of buyers – as those help business owners have a better understanding of how much the business actually worth in the eyes of buyers, which sometimes could be quite different from how much the business owner thought the business is worth to them which will affect their personal financial plan. At the same time, this will help business owners identify the less obvious metrics that they can work on to boost the valuation in business.

Since the Certified Exit Planning Advisors are professionals in different fields who work with business owners, we also gained a deeper understanding of each other’s work, and the program help connect us to form exit planning teams. So when evaluating the readiness of sale of business in the discovery stage, I will be able to better help clients identify what other expertise are needed in client’s specific situation and connect and introduce clients to suitable professionals (business attorneys, M&A advisors, business brokers, CPAs, estate planning attorneys, etc.) who specialize in different areas of the exit planning process.

At the same time, being a Certified Exit Planning Advisor in the exit planning network allows me to stay on track of the most up to date technologies used in the area and will introduce or provide relevant software to clients as needed.

I look forward to being a better resource to business owner clients in all stages, and if you have or anyone you know are interested in this services, please feel to contact me!