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Exit Planning for Advisors: Profitable Opportunity in 2023

Exit Planning for Advisors 2023

In the business world, having a strong business plan will generally yield a successful operation. Likewise, strategic planning can help management teams and staff to financial stability and clarity. 

Exit planning for advisors is becoming a hot topic in the financial services industry. It makes sense then that exit and succession planning guide the company to the next stage. 

This next stage could include selling the company to a third party or passing it on to family members and several other possible exit pathways. 

It’s also an opportunity for business advisors and consultants to add value to their current service offerings with the help of exit planning software.

Exit Planning & Succession Planning

Think about these numbers. Most business owners are over the age of 55. Over 60 percent of business owners plan to use the money they receive from their business as a main source of income.

Additionally, between 80 and 90 percent of their wealth is tied up in their business. However, less than 20 percent have an exit plan.

For these reasons, a great opportunity exists for business consultants and advisors to add exit and succession planning to their offerings and exit planning software helps them deliver this service in a timely and structured manner.

What is Exit Planning?

Exit planning is the process of preparing a business for transfer or sale, ensuring the smooth transition of ownership and management. This process goes beyond simply selling the business and instead encompasses a range of strategies and steps.

Exit planning is done to ensure that business value is maximized at time of exit, minimize taxes and risks, and secure the financial future of its owner.

An exit plan outlines how a business’s value can be converted into wealth. It also facilitates a seamless transition for the owner’s next professional step or retirement. It also considers how much money a business owner needs to live comfortably as they enter that new stage. 

It addresses many concerns, such as tax and legal issues and the personal objectives of the business owner/s. 

Succession planning is a key component of effective exit planning. It involves identifying critical roles and key positions within the business, developing plans for their transition, and ensuring that potential successors are identified and groomed for leadership positions.

Human resources are essential for succession planning. It includes recognizing and developing talent within the organization. Additionally, it involves creating a strong pool of potential internal candidates.

For financial advisors and consultants, exit planning offers a new revenue stream and the opportunity to provide added value to their clients. By helping businesses continue to thrive and ensuring a smooth ownership transition, advisors can provide essential support and guidance to their clients during a time of significant change.

Exit planning software can also play a key role in the process, providing tools and metrics to track progress, measure growth, and close the value gap.

By using powerful software tools, advisors can better assess a business’s current value and identify potential areas for improvement while providing their clients greater visibility into the exit planning process.

What is Succession Planning?

The University of Washington Human Resources site defines succession planning as the process of identifying the critical positions within your organization and developing action plans for individuals to assume those positions. It involves creating development plans, building a talent pool, and ensuring that businesses continue to run smoothly during times of transition.

Effective succession planning is a critical part of any organization’s long-term strategy. It involves taking a proactive approach to identifying potential successors for key roles and providing them with the necessary training and support to be successful in their new roles. Succession planning is particularly important for businesses where there are fewer potential internal candidates or where key positions are particularly critical.

Financial advisors can play a key role in helping businesses develop effective succession plans. They can work with human resources teams to identify potential successors, provide training and support, and ensure that businesses continue running smoothly during transition times. Advisors can also guide how to close the value gap, track progress, and measure growth using powerful software tools.

By offering succession planning services, advisors can develop a new revenue stream that helps businesses plan for the future while ensuring they remain competitive in a rapidly changing marketplace.

Whether it’s working with internal candidates to develop leadership roles or building a talent pool of potential successors from outside the organization, financial advisors have a critical role to play in the success of any business. 

So if you’re an advisor looking to expand your services, consider adding succession planning to your list of offerings – it’s a profitable opportunity that can pay dividends for years to come.

Succession planning is a next-step guide for filling organizational positions once the current owner passes the reins to new leadership. Succession planning ensures a smooth transition and strengthens the company over time. It’s useful in identifying critical positions within the organization and potential vacancies.

A New Revenue Stream for Business Advisors and Consultants

Business advisors who add exit & succession planning services are presented with an opportunity to differentiate themselves from other advisors while creating additional revenue.

Exit & succession planning is a complimentary service offering to the more traditional business advisory/consultancy services provided, allowing firms to easily integrate it into their practice while increasing the value provided to clients.

Providing exit and succession planning services gives consultants a big-picture view of their client’s businesses and allows them to add value to their services.

Blending exit and succession planning into an advisory practice generates five potential opportunities:

  1. Exit planning allows advisors to have better conversations with business owners.
  2. The advisor possesses more knowledge and understanding of the business owner and their business. This allows them to probe further and engage in broader, more meaningful conversations.
  3. Advisors who use exit planning have a comprehensive view of their client’s business and objectives. This is in contrast to a limited, one-dimensional approach.
  4. The exit and succession planning process typically takes three to five years. This extended timeframe allows advisors to work with clients over a longer period.
  5. With this, advisors will generate recurring revenue while significantly adding value to the client’s business. 

Furthermore, advisors can support their clients in identifying critical roles within the organization and developing effective succession planning, including identifying potential successors for key positions.

Businesses can thrive long after their founder’s departure by proactively approaching talent pool development plans.

A key benefit of offering exit planning services is that advisors can help business owners close the value gap, allowing them to receive the full value of their company when they decide to exit. Advisors can track progress and measure growth towards these goals using powerful software tools for exit planning.

Why is it important for advisors?

Adding exit planning services to a business advisory/consultancy practice presents a unique opportunity for advisors to create a new revenue stream while offering added value to clients.

Advisors can assist business owners in creating a successful exit by taking a comprehensive approach to succession planning. Powerful software tools can help close the value gap.

Effective succession planning is critical for businesses of all sizes and industries, with key positions and leadership roles at risk when a key employee leaves. Financial advisors and other business consultants can play key roles in guiding their clients through the succession planning process, including developing talent pool development plans and identifying potential successors.

By incorporating exit planning into their service offerings, advisors can continue to be a trusted partner for their clients, helping them to not only plan for their exit but also ensure that their businesses continue to thrive in the long run.

Using Exit Planning Software

Exit planning software helps streamline the process and creates a clearly defined end game. Exit planning automation allows easy integration with software like Quickbooks and Xero. 

One option to consider when vetting Exit Planning Software options is Maus software. Maus allows business advisors and consultants to structure and automate the client journey. 

Exit Planning Software allows business advisors and consultants to do the following:

  1. Close the Value Gap
  2. Track Progress & Measure Growth
  3. Use Powerful Software Tools

Close the Value Gap

Exit planning software helps consultants close the gap between perceived value and experienced value. Using a proven methodology, this software is a valuable tool for creating profit and loss statements and forecasting cash flow over the next year or the next five years.

Track Progress & Measure Growth

By tracking key metrics, achievements, and obstacles in one software system, advisors can easily implement the exit plan and keep their clients in the loop. Setting and tracking goals are also easy to manage and share with clients and other stakeholders. Advisors can identify any risk factors that could devalue the business using 121 value driver questions across 22 categories.

Use Powerful Software Tools

Maus software offers powerful tools to help manage all facets of planning. Intuitive workflows and branded templates allow for the creation of professional documentation. Take advantage of proven methodologies to remove the guesswork as you build trust with clients. Create comprehensive reports and stellar presentations to highlight progress. Finally, one of the most valued assets of Maus software is the strong customer support partners get to make their business successful.

Maus Exit and Succession Planning Software

Exiting without a well-thought-out strategy puts the entire business at risk. Learn how Maus strategic planning software enables consultants to bring more value to their clients as they expand revenue. 

Book a demo with Maus Strategic Planning Software.

Final Thoughts

Exit planning and succession planning are critical aspects of running any business. Financial advisors and business consultants have always understood the value of exit planning. 2023 offers a great chance for profitability.

By offering comprehensive exit and succession planning services to businesses, advisors can expand their revenue streams and enhance their clients’ long-term success.

Key roles in effective succession planning include identifying critical organizational positions and developing plans for future leadership. Human resources departments play a significant role in identifying potential successors and building a robust talent pool from which to draw.

Advisors can use powerful software tools such as the Maus Exit and Succession Planning Software to support these efforts. With this software, advisors can track progress and measure growth, close the value gap, and provide clients with a holistic view of their exit and succession planning efforts.

Effective succession planning ensures that businesses can continue to thrive long after the current leadership has moved on.

By positioning themselves as key partners in this critical process, financial advisors and business consultants can establish themselves as leaders in their industry and drive significant growth in the coming years.

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