Exit planning is a process designed to facilitate business owners in making and implementing the most important financial decision of their business life: the exiting from their business. The process addresses all of the business and personal elements involved in an exit including financial considerations, management succession, legal issues, tax minimization considerations, insurance planning, and estate and wealth management issues.
Why should I plan for my Exit?
It is inevitable that we will all someday leave our jobs or exit our business. Planning for the inevitable helps ensure that the departing or retiring owner has secured his/her financial well-being through retirement and has an exit strategy in place which will maximize the value of the business and/or transfer ownership to the desired successor(s). Proper planning promotes business continuity and peace of mind for the owner, for his/her family and for employees of his/her firm.
When should I begin planning for my Exit?
Ideally, the exit planning process should begin three to five years (or more) before the owner's exit from the business. Moreover, it is a good practice to have a strategic exit plan in place regardless of the owner's age or the life cycle stage of the business. By planning well in advance of the exit, there is ample time to value the business, shore up potential operational and financial shortcomings, implement value enhancing and tax planning strategies, plan for management succession where appropriate and take proper steps in the owner's personal financial planning, insurance planning and estate planning.
How much do your services cost?
Bunker Hill's exit planning fees are scalable to the size and complexity of the business in question. Our clients report that they receive a very high return on dollars spent for services, in addition to the comfort of knowing their eventual exit has been thoughtfully and professionally planned. Generally speaking, the exit planning engagement fees can range from as low as a couple thousand dollars for very small businesses or partial plans to as much as $25,000 or more for a large or complex business. Bunker Hill does not charge potential clients for an initial consultation .
Why should I pay for an Exit Planner, and what do I get for my money?
You hire an exit planner to help formulate and implement a plan to achieve your business departure goals. In essence, you hire an exit planner to help you with the most important financial decision of your business life. You receive a comprehensive written plan that outlines your business and personal financial goals and detailed strategies designed to achieve these goals within a logical timeframe. It is, in essence, your very detailed roadmap for an optimal transition out of your business. A roadmap is nice, but this is only part of the value received. Exit planning is a process, and there is value is merely going through the process. You may be addressing key issues for the very first time or you might be securing outcomes which were always desired, but for which there was no clear path of attainment. Your well- constructed and implemented exit plan can and should offer an exceptionally high return on investment.
Do you Guarantee results?
You hire an exit planner to maximize the probability of achieving your business departure goals. Success is measured relative to the goals you establish with your exit planner when beginning the exit planning process. While no plan or process can guarantee a 100% attainment of goals, your odds of success when using a qualified and experienced exit planning firm, such as Bunker Hill, can be greatly enhanced.
Why should I choose Bunker Hill Exit Planning?
Bunker Hill has successfully provided exit planning services for nearly three decades. We believe this longevity is our reward for providing exceptional customer service. Our experience covers a wide breadth of industries and exit motivations. We also offer a host of services which are often complimentary to exit planning. By engaging Bunker Hill you receive a turn-key approach to planning and implementing your exit.
Where are you located?
Bunker Hill's main office is located in Houston, Texas and we also have associates serving the Dallas/Fort Worth and Oklahoma City markets. If desired, we can also recommend service providers local to your location. Please see the Contact page for more information.
Am I too small to pay for exit planning?
Generally speaking, all business owners should plan in advance for eventual exit from their business. The decision of whether or not to engage the services of an exit planner should be predicated upon whether or not the perceived benefits exceed the cost of services provided. In most cases, the incremental value received from exit planning will far outweigh the professional fees paid. Many firms, such as Bunker Hill, price their services commensurate with the size and complexity of the business.
What if my Business is currently facing challenges impairing its value?
There are both macroeconomic factors and business specific factors which can negatively impact the value of a business. For example, most would agree that we are currently living in tough economic times. This reality might militate towards operating the business instead of seeking an exit event in the near term when the market value of the business may be temporarily depressed. Or, you might be facing challenges very specific to your business which may or may not be linked to the general economy. Comprehensive exit planning is mindful of the importance of timing. The exit planning team can help identify challenges and weaknesses and develop value enhancing strategies aimed at maximizing eventual exit event proceeds. Ideally, exit planning is commenced three to five years (or more) before an owner's exit: this allows time to address current challenges.
Where Can I learn more about Exit Planning?
We encourage you to contact us for more information whether your interest is general or specific in nature. We will be happy to send you materials or direct you to information sources whether or not you choose to use our services.
When is the best time to discuss my exit with a planner?
We recommend that you formally engage an exit planner three to five years before your contemplated exit. This builds in ample time to adequately address and prepare for all business and personal aspects of departure. A three to five year window is ideal, but not mandatory: exit planning can also be beneficial for owners with a much shorter time horizon to exit.
How much is my business worth?
Many business owners are aware of general rule-of-thumb guidelines as to the value of their business; however, rules-of-thumb are no substitute for a professional valuation - especially where the value of the business comprises the bulk of a person's net worth and where such value will be the foundation for funding retirement. Proper valuation of a business is a complex undertaking highly dependent upon such factors as the cash flow generating capability of the business, future prospects of the business and a host of other macroeconomic and business specific factors. Most significantly, Value is not a static concept: it will change over time given the company's financial performance and perceptions of its future. It is generally advisable to have a valuation of your business conducted by a credentialed valuation professional well in advance of a planned exit (with updates as one moves closer to the planned exit). The Bunker Hill team employs a credentialed valuation analyst. An indication of value is an integral component of a comprehensive exit plan.
What if I want my family or my employees to assume management?
Transferring the company to family or employees is a common goal - particular among family run businesses. If properly constructed, such transfers can help perpetuate the company's mission and allow the owner to remain involved in the business while still achieving financial security. A key disadvantage is there is typically little cash available at closing and increased or continued financial risk. There are also numerous tax and compensation issues to be addressed. A professional exit planning firm is well equipped to help the business owners navigate through these issues.
Do most business owners use an exit planner?
The simple answer is No; however, an increasing number of owners are seeking the services of an exit planner. This trend is the result of millions of owners now approaching retirement age; their growing awareness for the need to plan well in advance to ensure a comfortable retirement and a smooth transition of their business interests and the growing awareness of firms like Bunker Hill who provide exit planning services.
The Economy is bad, should I wait to engage an exit planner?
Keep in mind that exit planning is ideally commenced three to five years before a planned departure; therefore, given the length of the typical business cycle, the likelihood is the economy will have improved during this time period. Moreover, economic downturns do not affect all business sectors equally, and if fact, some businesses may actually flourish during downturns. The period of time between initial planning and ultimate departure may be used to mitigate or correct shortcomings and to implement strategies to increase value.
Will I have enough Money fully fund my Retirement?
It has been reported that many people fear running out of money during retirement more than death. Exit planning can help better the odds against such a calamity. Exit planning includes the totality of a business owner's financial life: by examining both business and personal finances, the contemplated proceeds from the business can be weighed in context of whether or not the owner will be sufficiently funded for retirement. For example, exit planning may reveal that the business has not yet achieved the critical mass necessary to command a value needed for a secure retirement. In such cases, value enhancing plans can be designed and implemented and/or time of departure can be modified. The key is to plan as early as possible. Please check out Bunker Hill's Retirement Planner tool to see if you are on track to achieve your retirement financial goals.
How Do I Get Started?
You have made a wise decision to investigate exit planning. Call the Bunker Hill exit planning team at 713-223-5730 for a no-obligation discussion of your situation, or feel free to use our contact form.