Succession Planning vs Exit Planning
Succession planning is an important concept for business owners who are leaving their businesses, but this type of planning primarily focuses on the transfer of leadership and/or management from one generation to the next within the business. This one-off approach usually identifies successors within a business and provides them with an opportunity to develop their skills and experience in order to replace the existing leaders of the business at a future date. While succession planning is an important topic for owners who are in the process of leaving their businesses, it typically addresses only one aspect of a successful exit from the business.
Exit Planning, on the other hand, is the comprehensive analysis of all of the factors that impact a business owner. Exit Planning addresses not only the succession aspect of leaving a business but also a wide variety of other issues that can be important to your clients, including current and future planning with respect to their personal financial stability, their business (its value, its employees, its position in the market), their family and community. Exit Planning starts from the perspective of the business owner's goals and objectives in each of these critical areas, along with current and projected resources (business value, personal and business financial resources), to identify the unique combination of strategies and steps that are most likely to allow your clients to reach their overall goals.