The International Exit Planning Association

At IEPA, we transform knowledge into action. Our faculty trains advisors to actively write and implement exit plans, helping business owners achieve real results. Join us on December 17th for a free webinar to learn more about becoming an "Exit Doer". Led by John Leonetti. Register for the free webinar by using the QR code below. #exitplanning #CBEC #CEPA #successionplanning #cpas #wealthadvisors #financialadvisors https://lnkd.in/ezWqmKu3

Growing and Trading Business Value - Hazards of Selling an "As Is" Business. Growing value and trading value is the flip side of the same coin. A proper exit plan defines the future transfer of ownership of a company, built upon the exit options available and an analysis of the timing and personal goals of an owner. The plan includes one party exiting the business while another is entering. What drives the valuation of a company is what is expected to happen in the future, coupled with the risks associated with the growth plan being executed effectively. So, if valuation is a risk-adjusted prophesy of the future, then the growth plan is the ultimate driver of the exit valuation and the mechanism to transfer to a new owner. Hence, growth and exit being the flip side of the same coin. Most exit planners / consultants focus either on the growth or the exit / transaction - it is hard to do both. An advisor who is selling a business can build a forecast with the exiting owners and present it to 'the market' to paint a picture of the future operations and cash flow to be generated. However, without an effective articulation of HOW the next owner can execute on the growth available, it can be hard to capture the value - and meet the value expectations - for the exiting owner. This is the essence of 'exit planning' - preparing the company and the owner for a future transaction that helps to assure that the next owner will be able to execute on the growth plan / forecast that is presented while the current owner is paid for the value they expect. Timing is key to consistent success with exit planning. If a business owner plans far enough in advance, the growth plan can be solidified. Areas of a growth plan that require time to develop include leadership team additions, reducing customer / vendor concentrations, improving operating systems, refining accounting and finance functions, implementing effective marketing and sales strategies and getting alignment and accountability of functional areas of a business. Without a proper amount of time to implement improvements in these areas, a business would be looking to transfer or sell 'as is'. Since most business owners will transfer their business once, that owner tends to believe that 'as is' is good enough. However, 'as is' can lead to punishing valuations because the perspective of the marketplace often-times varies widely from the exiting owners' perception of what they are actually selling. Without some validation of the veracity of a growth plan, an exiting owner faces many risks when they try to trade the value of their company. And the sell-side advisor who represents the company 'as is' to the marketplace can face a failed transaction as the marketplace offers low valuations. In my 19th year of helping to build the exit planning industry, I am ever hopeful that these messages are being heard and more owners and advisors plan ahead to avoid the "as is" business exit attempt.

Join us on December 17th at 3:00 PM ET for a free webinar to learn about the Certified Business Exit Consultant? (CBEC?) designation, led by John Leonetti, Esq., M.S. Finance, CM&AA?, CBEC?—a nationally recognized leader in exit planning and author of "Exiting Your Business, Protecting Your Wealth: A Strategic Guide for Owners and Their Advisors" and founder of the International Exit Planning Association.?? Earning this certification isn’t just about passing exams—it requires submitting a completed exit plan that achieves the CBEC? standard of quality, ensuring that CBEC? advisors are equipped to deliver measurable, impactful results for their clients. ?? The Winter 2025 CBEC? session will start in February. ?? For the Best Rate 25% Discount register by December 31, 2024. ?? #ExitPlanning #CBEC #ProfessionalDevelopment #Certification #BusinessGrowth #businessconsulting #professionaldevelopment https://lnkd.in/eKvnM28X

What Does the Jake Paul / Mike Tyson Fight Have in Common w Exit Planning? For those like me that fought through the endless buffering on Netflix Friday night to catch a glimpse of the old Mike Tyson, we were all severely disappointed. It turns out the the hype for this exhibition match significantly outweighed the delivery of a competitive fight. The lead-up to this event was filled with expectation, derived from the footage of Tyson in training, wailing away at his sparing partners in a manner that we all became accustomed to seeing in the 1990's as Tyson rose to dominance in boxing. But those "show punches" turned into empty punches Friday evening as more people tuned into this event than watched the Superbowl. In the end, it was hype over substance, disappointing expectations. How does this relate to business owner exit planning? In my opinion, when a business owner takes a meeting with someone who is 'certified' in exit planning, what might a reasonable expectation be for that owner? If I met with someone who held out a certification in a certain area, I would assume that the person is competent in this area and has thrown and received a few punches. If someone presented themselves as "certified" to me, I think that it is fair to presume that this person has engaged in the area of expertise at some minimal level. I would further assume that there is an obligation to meet a minimal level of competency and experience the same way that the Tyson / Paul fight set a similar expectation - that there would be something of significance that makes the engagement worth our collective time. In other words, the hype of being certified would be met with follow through of a substantive discussion that would lead to real solutions. In my humble opinion, this is not the standard being set in the exit planning industry. Hiding is plain sight are many advisors who are 'certified' in exit planning but are not required to demonstrate any form of actual experience in working with business owners. The hype of a certification does not meet the reasonable expectation that a business owner likely would have for taking such a meeting or having this type of conversation. In our world we call this Exit Doing versus Exit Talking. Jake Paul "talked" a good fight but did not deliver. While the rouse paid off financially for everyone on the promoting and 'fighting' side of the equation it was equally lacking for those whose expectation was set based on the hype. As one commentator stated regarding the Netflix presentation "at least no one paid for it" - meaning, it was free to Netflix subscribers, so that at least makes the deception less egregious. I find hyped performance less acceptable in the world of business exits than in entertainment - too much is on the line. Caveat emptor I guess . . buyer beware. Because 'free' exit planning can be a lot more expensive than it appears.

15,000 Hours Lost to Failed Exit Transactions It is uncommon to promote failure. However, as both a practitioner and the owner of an exit planning training company, some of the best lessons to be learned (and, in this case, taught) are born from failure, not from success. As an exit planner and a sell-side advisor, we are hired by business owners who want to sell their companies but sometimes fail to get a transaction completed. Unfortunately this happens too often, but too few people want to analyze or discuss it. We are leaning into this issue and creating lessons to improve the market. The largest business sale failures that we analyzed fall into four (4) categories, three (3) of which can be addressed through timely and proper exit planning. #1. Customer concentration or structure / legal issues with the business #2. High owner dependency and / or unrealistic value expectations #3. Surprises found in diligence (that cannot be repaired in a timely manner) #4. Poor / declining business performance during the sale process. In our analysis, the losses attributable to these 4 categories amounts to millions of dollars in man hours poured into these deals. AND in every case these companies received offers that were at or above the valuation targets established in the sell-side engagement agreements. Of course, the largest pain felt is commonly for the business owner who sought to complete a transaction but did not get the end result. Even more remarkable is that our experience is statistically better than industry averages where failure rates are higher. There has to be a better way forward for ourselves and the business owners that we serve. I believe that the lessons to be learned from these failed transactions hold tremendous value for the fast growing exit planning industry. And, within these lessons are likely to be the keys to successful collaboration opportunities between exit consultants and M&A advisors. The International Exit Planning Association (IEPA) is just now launching our year-long study group to analyze, interpret and teach lessons from forty (40) sell-side mandates for lower middle-market businesses. Business sale transactions generate the largest amount of advisory work as well as 'generational liquidity' for the owners / equity holders of the companies that sell. Therefore, we are creating curriculum for a small study group that examines the good, the bad and the ugly of business sale transactions. I plan to share the findings from the discussions with this cohort as we discuss better ways to aggregate our advisory services. The goal is to learn from mistakes so that we all can better serve the business owners who need our help with the remarkably complex set of challenges related to exiting a business. From exit planning to successful sales, we want to see an improved marketplace. Stay tuned for more on this important initiative as we kick off what is sure to be an exciting program. John

? Early Bird 25% Discount Ending Soon on Dec. 31, 2024! The 2025 CBEC? Training Dates are here! We offer the CBEC? only four times a year so now is the time to look into your future and choose the session that is most convenient for you--the Winter Session starts in February! Why choose to become a Certified Business Exit Consultant? with the IEPA? You'll gain the essential knowledge and tools to guide your clients through successful business exits. The course includes self-paced modules, live study sessions to help you apply what you've learned, and a complimentary one-year membership with the International Exit Planning Association—a $2,000 value! Register now for only $2,250 (a 25% discount before 12/31/24) and start accessing the modules in advance of the course. Learn from experienced advisors who are actively making a difference. Don’t miss out—register now and take advantage of the early bird discount before it ends on 12/31/24! #ExitPlanning #BusinessConsulting #ProfessionalDevelopment #CPAs #WealthAdvisors #CBEC #SuccessionPlanning #BusinessOwners https://lnkd.in/eGV65C6W

Exit Planning Talk with The Mooch This morning Anthony Scaramucci was on Squawk Box, giving his post-election views. As I was watching, I was reflecting on some of the conversation that I had with Anthony a few weeks ago as we recorded the keynote presentation for our exit planning conference. The clip below is the last 3 1/2 minutes of that interview. Anthony wanted to leave a few exit planning thoughts for our attendees (who he refers to as 'delegates'). The Mooch says that Americans are great innovators and the irony of the political and economic landscape today is that it is the nature of our job creators, risk takers and innovators - i.e. our business owners - who will likely save us from our current political problems by growing the wealth in our country and growing our way out of our debt and other issues. Anthony quotes Eisenhower when he says that 'when you have a plan, you are ready for things. And maybe the plan won't go exactly as you expected but at least it's moving you in the right direction. Plans will lead to good luck. And when you have a plan you're going to be ready to start the day to make that good luck happen.' I thought that this was a good message to share as we head into Veterans Day weekend. I'm fond of the saying that Freedom is not Free - in many ways this week served as a reminder of the truth of this saying. This great American experiment continues forward. And no matter what side of the political isle we fall on, we are all Americans at the end of the day. And I think about this as we pay respects to our veterans across our country this weekend and put a wrap on a historic week for our great country. Regards, John

Initial Exit Planning Thoughts on the Trump Victory The American people have spoken, and former President Trump will return to office as the 47th President of the United States. The Senate will be Republican controlled, and the House may also remain with a Republican majority. Here are a few, initial thoughts, of salient issues that impact the advice that we provide to business owners relating to their exit plans. - The Dow Jones Industrial Average futures are pointing to a +3% / +$1,200 upward swing this morning as the financial markets continue to recognize the pro-business policies that Trump brings. This helps our exiting owners increase the value of the liquid assets needed to fund their post-exit lifestyles and replace the income from their businesses as they exit. - The capital gains tax most likely not in jeopardy of increasing, reducing the probability of a 'repeat of 2021', when President Biden threatened to substantially increase the capital gains tax, creating an immediate wave of owners who wanted to exit via a sale. So, our owners will most likely not face that decision again in 2025. - The Trump tax cuts that were set to expire at the end of 2025, stand a good chance of being renewed / extended. This takes away some risk that estate and other tax-related issues will not be at risk of changing materially in the short-term. - The US balance sheet continues to have an excessive amount of debt at +$35 trillion. Elon Musk may head up a 'government efficiency' program and potentially make cuts to the budget in an effort to restore the surpluses that we have not experienced in more than 20 years. Our business owners can relate to strong balance sheets and proper amounts of leverage, which strengthens the financial outlook for a company or country. - The pro-business pundits will say that lowering taxes will stimulate the economy and growth. Because so much of the government budget is entitlement spending, defense spending and interest on the debt, we cannot cut too much of those annual expenses, so growth is the most viable way to tackle the problem with the US debt. Business owners can relate to 'growing your way out of a problem' as many have had to do the same. - Regulatory burdens that slow growth - thinking of the energy sector in particular here - are likely to see relief, promoting further growth in the country. Most business owners understand the challenges when government entities get in the way of growth instead of supporting it. - If interest rates continue to trend downward, debt capital becomes less expensive to fund transactions, which helps with business sales. I do believe that todays' news of a Trump / Republican win has many business owners taking a deep sigh of relief for economic issues that impact their business value and growth potential. Those are my initial thoughts as we all absorb this historic election. The IEPA will continue to publish more on this topic.

Reflections on the Eve of the Presidential Election As we all sit and watch the polls try to tell us who will win tomorrow's Presidential and other elections, I am struck with one overriding thought. . . that this experiment called U.S capitalism is not only the greatest in the history of the world, but we as exit consultants get to play a major role in preserving and protecting what owners have created, no matter who becomes the next US President. While tensions and emotions run high through a divided country this week: - privately held business owners that we serve continue to create jobs, deliver innovative solutions in competitive markets and seek the American dream of wealth, freedom, health and financial independence. This will continue no matter who is elected President. - The baby boomers who own these businesses will continue to age and be in need of exit advice, no matter who becomes President. - The complexity of exiting a business will continue, no matter who becomes President - The privately held company market will continue to value and trade successful businesses, no matter who becomes President - Trillions of dollars continue to be ready to be deployed into the private business market, no matter who becomes President - Capital gains and other taxes will continue to need to be measured and managed, no matter who becomes President - The legislative landscape may continue to evolve, but will continue to present ongoing challenges, no matter who becomes President. Overall, I take comfort this morning in the fact that the markets will continue to function and business owners' needs around successful exits will continue to increase, no matter who becomes President. And this great experiment called the United States of America continues to thrive, driven in large part by the risk takers and job creators who are the backbone of the economic engine of the USA. And the opportunity to serve these business owners only grows. Whether uncertainty is added or removed from the results of this election, our critical role as exit consultants will continue to be in greater and greater demand. The opportunities that this country provides are a blessing . . . and that is worth remembering as we head into a historic week for our awesome country. John

?? Celebrating Excellence in Exit Planning! ?? At last week’s International Exit Planning Association 2024 Annual Exit Planning Conference, we were thrilled to honor Bruce A. Beickman Beickman, CPA, CBEC?, CM&AA, with the 2024 Excellence in Exit Planning Achievement Award! Bruce’s dedication to guiding business owners through the complexities of exit planning—both in their businesses and beyond—is inspiring. He generously shares his wealth of knowledge and experience with clients, peers, organizations, and the entire exit planning community. Since 2009, the IEPA has presented this award to a member who embodies our core values: innovation within the exit planning landscape, unwavering integrity, and a commitment to education and collaboration. Bruce’s outstanding contributions truly exemplify these principles, and we are proud to have him as a valued member of our association and our Leadership Council. Alliance of M&A Advisors Congratulations, Bruce! ?? #ExitPlanning #IEPA #ExcellenceInExitPlanning #Leadership #BusinessTransitions #ProfessionalRecognition #ExitPlanning #IEPA #ExcellenceInExitPlanning #Leadership #BusinessTransitions #ProfessionalRecognition #CPAS #CBEC https://theiepa.com/