The trick to getting clients buy-in on exit strategy planning

Written on Jul 18, 2019

By Jessica Salerno, OSCPA senior content manager

Clients might not be open to hearing about an exit strategy for their business, but talking to them about the value requires a shift in their perception of the process.

MIKE-PAPPAS_A_300“The most important thing is that exit planning is not really about the exit,” said Mike Pappas, CPA, director in charge of the accounting and assurance services department at Barnes Wendling CPAs. “It's really about improving the value of business.”

Pappas has the Certified Exit Planner Advisor designation (CEPA) from the Exit Planning Institute. He said clients often focus too much on the “exit” portion of the exit strategy and ignore how the process can help build a better business.

“The program is geared towards providing a methodology and a system of tools to help businesses with their strategy to increase value and to put the company in a good position for whenever that exit might happen,” said Rosemary Rehner, CPA, and director in charge of the accounting and assurance services department at Barnes Wendling CPAs. Rehner recently earned her CEPA certification.

Although exit strategy planning is not unique, Pappas said clients are always looking for new options and approaches.

“I think what's new is more of a process or a methodology,” Rehner said. “People come in and out of businesses all the time, this is just a way to go through a methodical process to accomplish the goal.”

Rosemary-Rehner_A-high-300She said the value of the methodology allows you to look at the assets of a company and what it’s doing to equate the value of the organization when it’s time to exit.

Most clients are not prepared to have these discussions, said Pappas, because everyone assesses their business differently and they might think exit is too far away.

“It's worthwhile to invest in this because of the long-term benefit,” Rehner said. “There's a cost associated with it. They have to be willing to invest to have a better result.”

She predicted exit strategy planning will increase in the future, thanks to baby boomers retiring. The question is if those looking toward the future will have the foresight to engage in the exit planning process early enough.

“It’s more about a process for improvement,” Pappas said. “And if people say ‘I'm going to engage someone to help me exit my business in a couple years’ then it's too late. If you're going to really embrace this process, you need five to 10 years of assessment and improvement to achieve the desired result.”

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