What Is Exit Planning?

Exit planning is the process of preparing a business, its owner and the people around it for an eventual change of ownership. It is wider than a sale. It asks when and how you want to leave, and what the business needs to be ready, including its financial records.

By Jake McKenna, FounderPublished Last reviewed

What does exit planning mean?

The Exit Planning Institute describes exit planning as a strategic process where business owners prepare their company, themselves and their stakeholders. The SBA's guidance for owners points the same way: create a thorough plan to transfer ownership, sell or close the business.

Notice what is in that description. It is not only about price. It covers the company, the owner and everyone with a stake in what happens next.

How is exit planning different from preparing a sale?

Exit planning is the long view. Preparing a sale is one step inside it, and it is the one that starts when a sale is realistic. Our guide to preparing your business for sale covers those steps, and M&A advisory covers the financial work once a deal is in play.

Where does the financial work fit?

Whatever route an owner takes, the financial side usually comes down to the same things: books that are reconciled and current, earnings that are explained, and a clear picture of assets and liabilities. A buyer, a successor or a lender will all want to see that. Reading about quality of earnings shows how a buyer tests the profit figure.

What do we help with?

Under our M&A and exit advisory service, we help owners get their business ready to sell: cleaning up and normalizing the financials, building the financial model, assembling the data room and supporting the owner through buyer due diligence. We work alongside your broker, lawyer and tax adviser. Formal valuations, negotiating the deal, legal advice, tax advice and investment advice are outside our services. English Oak Financial does not prepare tax returns, perform audits or give investment advice.

Need this done for you? See our Fractional CFO & Advisory service, or pricing. English Oak Financial does not prepare tax returns, perform audits or give investment advice. This guide is general information, not tax, legal or investment advice.

Sources

Common questions

Is exit planning only for owners who want to sell?

The Exit Planning Institute and the SBA both frame it as preparing for a change of ownership. A sale is one route. The SBA's guidance also covers closing a business.

When should an owner start exit planning?

There is no single date that suits every owner. What helps is starting before you need to, so the books and the plan are ready when an opportunity arrives.

Do you give exit planning advice?

We help with the financial side of getting ready to sell. We do not give legal, tax or investment advice, and we work alongside your lawyer and tax adviser.

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