Certified Exit Planning Advisor - A Complete Guide

Did you know that only 20% to 30% of businesses that go into the market actually sell? Statistics further show that 3 out of 4 firms regret selling their businesses due to lack of readiness.

That’s why a Certified Exit Planning Advisor (CEPA) can be invaluable if you want to sell your business successfully, protect your legacy, and achieve your financial goals. 

Today’s blog will highlight the importance of CEPAs and how to find one. We will also explain how to implement a successful business exit strategy.

But where do you find an exit planning advisor?

At Exitwise, we have 14+ years of experience helping businesses in over 200 industries build their M&A teams. We can help you interview and hire your exit team, including an M&A advisor, investment banker, transaction attorney, and tax accountant.

We have hundreds of pre-vetted experts to help you select the industry specialist M&A expert and maximize your exit.

Connect with us and get a CEPA to confidently exit your business!

What is a CEPA?

The Certified Exit Planning Advisor (CEPA) is a professional with the expertise to help business owners develop exit strategies. An EPI CEPA gets their title from the Exit Planning Institute (EPI).

Some of the services offered by a CEPA include:

• Tax planning
• Business valuation
• Succession planning
• Exit planning strategy creation
• Business value optimization strategies

Why Business Owners Need an Exit Planning Advisor

A good M&A advisory plays a massive role in your business exit planning. 

Check out the 5 reasons you need these experts:

1. Maximize Your Business Value: Hiring a business exit advisor can help you maximize the value of your exit. They can minimize tax liabilities, improve operational efficiency, and achieve a higher business value.
2. Strategic Decision-Making: A consultant can have comprehensive insights and experience in exit planning, helping you make better decisions.
3. Mitigate Risks: Suppose there’s a sudden economic change or you have a personal emergency. An expert can help you to minimize losses in these scenarios.
4. Provides Accountability: An exit business advisor helps you clarify your business and personal goals and holds you accountable for attaining your short—and long-term goals.

Difference Between an Exit Strategy Advisor and Other Financial Professionals

Financial professionals hold various designations. They can help you strategize your transition out of your company.

Let’s look at how these exit planning professionals differ from a CEPA:

Don’t know where to find exit planning experts?

Our team at Exitwise can help you interview, hire, and manage exit planning professionals and M&A advisors, including CEPA and CPA. We have helped businesses in different industries find the best M&A team and can do the same for you.

Check out a detailed explanation of how our process works.

Key Components of Exit Strategy Planning

So, what should go into exit strategy planning?

A well-thought-out exit strategy should have these core elements:

• Clear Goals: Have a detailed statement of your goals. For example, your goal might be for your family to continue with your business after 20 years.
• Business Valuation: As a part of your exit planning, you should calculate your company's value and understand its worth.
• Exit Strategy Options: You should strategically choose an exit option, such as liquidation or succession, and mention it in your exit plan.
• Financial Planning: Your exit strategy should include a financial plan to minimize tax liabilities and maximize business returns.
• Succession Plan: An exit strategy should identify successors and have a plan to transfer leadership and responsibilities.
• Clear Timeline: You should establish a specific time to exit your company. You should also outline when to conduct a business valuation and inform the stakeholders and customers about the exit.

How to Choose the Right Exit Strategy Advisor

Next, let’s look at the key considerations you should know when looking for an exit strategy advisor:

Consider Their Alignment with Your Goals

Pick an exit strategy advisor who understands your expectations, timeline, and personal goals. Check how their expertise and approach match your specific exit objectives.

Check Their Experience and Expertise

Evaluate if an exit planning advisor has a track record of successfully guiding entrepreneurs through the exit process. 

You should also check if they have the strategic expertise and a strong background in preparing businesses for sale in your industry.

Verify Their Reputation and Network

Choose professionals with a strong reputation in the industry. You should ask for references from their past clients. 

The business exit advisor should also have connections with strategic buyers, private equity firms, and individual investors interested in acquiring your business.

Assess Their Communication

During the initial consultation, ask questions to review the advisor’s communication style, approach, and ability to deliver customized results. 

You should also inquire about their availability and commitment to following through from the start until your business sale is completed.

Steps to Implement a Successful Exit Strategy

Wondering how to execute your exit strategy successfully?

Here are the 6 essential steps for a seamless exit plan:

1. Set Your Exit Goals

Every business owner has different goals. You should define your expectations—your personal goals and financial objectives. 

For example, your primary goal could be to create a family legacy, sell your business for the highest possible price, and retain some involvement post-sale.

2. Analyze Your Business

You should understand your business's financial performance. You can review your revenue streams, profit margins, and financial projections. 

Remember to evaluate the market position and see how it competes with other businesses. Lastly, examine your business operations to identify areas for improvement.

3. Explore Exit Options

You can explore common exit strategies, such as an M&A deal and management or employee buyouts (MEBO). Ensure that you analyze their pros and cons to select the best exit option.

4. Optimize Your Business Operations

You should maximize the outcome of your exit by finding ways to manage your cash flow and resolve pending debts. 

You should also enhance your supply chain management to reduce overheads and make your business profitable.

5. Build an M&A Exit Team

Another critical step is to have a team of exit planning professionals to help you navigate every phase of implementing your exit strategy. At Exitwise, we specialize in helping investors and business owners interview and hire their M&A exit teams. 

We can help you build an M&A team, including an M&A advisor, attorney, and tax accountant. These professionals help value businesses, update financial statements, prepare contracts, review agreements, and minimize potential legal implications. 

Partner with us and get top M&A experts who specialize in your industry!

6. Execute Your Exit Plan

The final step is to work closely with your exit strategy advisor and other experts to manage each phase of your plan. A business exit advisor can also help you gather and prepare all relevant documentation and perform due diligence. 

They can also monitor the progress and address any issues proactively. 

Frequently Asked Questions (FAQs) 

Here are a few more quick answers you can check for commonly asked questions about exit strategy advisors:

What Role Does a Certified Exit Planning Advisor (CEPA) Play in M&A?

The key roles of a CEPA in an M&A are:

• Evaluate your business value and help you improve your operations to maximize your value before selling.
• Create a tailored business exit strategy that aligns with your goals.
• Help you evaluate different exit options, like an initial public offering (IPO) and management buyout.

How Can a CEPA Help Minimize Risks in M&A Transactions?

Here are the top 3 ways CEPA can help you minimize risks during M&A transactions:

1. They can analyze your business for operational and business risks and recommend strategies to streamline operations.
2. They can advise on better M&A deal structures to minimize taxes and legal issues.
3. They can conduct due diligence before the M&A transaction to avoid integration issues like cultural clashes.

What Exit Planning Strategies Are Essential for a Successful Business Sale?

Here are the exit planning strategies that are crucial for a successful business sale:

• Define your personal and professional goals
• Conduct a business valuation
• Identify the correct type of buyer
• Implement operational enhancement
• Assemble an M&A team

Conclusion

Now that you’ve understood the key roles of a CEPA, you are well-equipped to tap into their expert advice and map out your next steps for an exit or transition.

Remember, picking the right exit planning consultant can make all the difference.

With Exitwise, finding an exit planning advisor doesn’t have to be complicated. We can introduce you to vetted M&A experts, including certified exit planning advisors. We will also help you interview and choose the right one for you.

Ready to hire a certified exit planning advisor and easily transition with your business? Book a one-on-one consultation with us so we can understand your needs and help you hire the best expert!