GMB Ep #106: Business Exit Planning With Scott Snider

 

Many business owners eventually come to the point where they will be moving on from the business they passionately built over the years, and having a good exit strategy will help them navigate this important and intimate event in their journey of entrepreneurship. This week on Grow Money Business, we have a distinguished guest, Scott Snider, the President and the co-owner of the Exit Planning Institute (EPI)Scott is an industry leader, growth expert, and entrepreneur. Throughout the episode, he discusses how he assists company owners in developing substantial businesses while also aligning their own financial objectives and personal purposes. He also explains several vital factors that every business owner should consider when exiting their company. 

 

 

Show Notes

[03:26] Current Role – Scott talks about his current role and how he helps with business exit planning. 

[06:40] Perfect Exit – Scott shares his insights about the perfect exit to a business owner who is about to do so in a few years. 

[10:23] Emotional Hurdles – Scott expresses his thoughts on managing psychology and people’s emotional hurdles along the business exit process. 

[14:12] CEPA – CEPA is an acronym for Certified Exit Planning Advisor. Scott gives a brief explanation for the entire CEPA process. 

[18:54] Exit Strategy for Young Entrepreneurs – Scott leaves a message to all the young business owners out there. 

[20:21] Scott’s Story- Scott emphasizes the significance of not letting your business define you while sharing his story and takeaways from his past experience. 

[29:35] Family Business – Explaining the nature of the family business, Scott shares how he and his father work together in their family business. 

[41:43] Vision – CEPA is suitable for any advisor who wants to learn how to help an owner position their company for a successful and significant exit. Scott broadly talks about the vision of the Exit Planning Institute. 

[47:43] Future Plans – Having explained the concept of the wealth gap, Scott explains the future plans for his business. 

[53:33] Research Findings -Scott shares details about one of his recent researches and exciting factors they discovered through it. 

Resources

Connect With Scott: 

LinkedIn: linkedin.com/in/scott-snider-epi/ 

Website: exit-planning-institute.org 

Facebook : facebook.com/exitplanninginstitute/ 

Instagram: instagram.com/exitplanninginstitute/ 

 

 

Mentioned in the Episode:  

Certified Exit Planning Advisor: exit-planning-institute.org/program/certified-exit-planning-advisor/ 

Owner Readiness: exit-planning-institute.org/state-of-owner-readiness/ 

Every Family’s Business by Tom Deans: https://everyfamiliesbusiness.com/book/ 

Traction by Gino Wickman: https://www.audible.com/pd/Traction-Audiobook/B00A9ZO7T6 

Episode 69: Interest Rates Are Rising....Does That Mean You Should Adjust Your Bond Allocation?

Episode #59: Everything You Need to Know About Buying & Selling Small Businesses With Greg K Williams

 

In today’s episode, we have another distinguished guest: Greg K Williams. Greg is a certified mergers & acquisitions professional who has years of experience helping business owners and buyers through the process of selling or buying a business. Throughout the episode, Greg shares his wisdom on the process of selling a business from both a seller’s and a buyer’s perspective, common ways you can boost what you get from a business, and several other things you should know if you’re interested in buying or selling a business.Continue reading

6 Reasons Basic Estate Planning is So Important for Business Owners

In general I am not a fan of “listicles”.  They feel like a cheap, click-baity, headline grabbing way to produce content and drive traffic to your website.  Reading them can feel…yucky.  So I typically try to avoid publishing them.  I care greatly about the integrity of this site, and avoid content that I don’t think is genuinely valuable.

Recently I’ve run across a number business owners who’ve done ZERO estate planning.  No idea who steps in to run their business if they’re not around.  No will.  No trust.  Nothing.

This is pretty common, unfortunately.  Hundreds of thousands of small businesses out there have done no estate or succession planning.  A study of 200 by Wilmington Trust found that 58% had no plan in place whatsoeverI’ve written on this subject recently.  Because this is such an important topic, I’m going to break my rule about listicles today to drive the point home.  (Hey, in moderation they can be an effective way to communicate.  Who doesn’t like digestible, bite sized snippets?).

Here are my top six reasons estate planning is so important for business owners.

 

 #1: You & Your Family Probably Depend On It

For most business owners I speak with about financial matters, a substantial portion of their net worth consists the equity in their business.  And when I say substantial, I mean up to 75-80%.  Without any type of plan in place, there’s a very high likelihood that the value of this equity dissolves entirely if you become incapacitated or die unexpectedly.

Even if you have a long term disability insurance policy in place, losing the equity in your business would probably have a significant financial impact on your family.  Having a succession plan in place in just in case something does happen is the only way to preserve your equity.  And therefore your family’s balance sheet.

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It's Never too Early to Start a Succession Plan

It’s Never Too Early to Start a Succession Plan

So here’s a topic that all business owners have thought about but few have taken action on: succession planning.  I was reading a study by Wilmington Trust the other day that polled 200 different owners of privately held businesses.  Personally, I’ve yet to meet a business owner who doesn’t agree that succession planning is important to their company and stakeholders.  Yet in this study, 58% of the businesses polled don’t have a succession plan in place!

Successions impact…everything: your family, your legacy, your finances, your employees, your partners, your customers, your stakeholders, and anyone else who touches your company.  My guess is that you want all these pieces intact throughout your transition and after you leave.  Yet most business owners don’t tackle the issue until a) it’s high time to exit, or b) they’re forced to for a reason out of their control.

Why?  Many people start to realize that the emotions involved are heavy and deep.  Your business is probably something that you’ve poured your heart and soul into for a long period of time.  You may have taken significant financial risks that have impacted your family along the way.  The decision making required in succession planning brings up a lot of emotion, and many business owners prefer to kick the can down the road rather than deal with them.

Problem is, there are many situations out of our control that could force a succession at an inconvenient time.  Health problems, car accidents, or even changes in the economy or your industry could easily force your hand.  Rather than rush into a transition unprepared (and in a potential fire sale), you’ll reach a far more desirable outcome when your succession is planned for.  What happens if you get into an accident and come out with diminished mental capacity?  What happens if you have a heart attack & die tomorrow?  What’s the game plan?  Who will step in, and how will your family, employees, customers, and other stakeholders be taken care of?  These are the questions a good succession plan answers.  They’re also the questions that must be made while you’re in a calm, stable, and clear state of mind.

 

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8 Considerations When Protecting Your Business With Life Insurance

8 Considerations When Protecting Your Business With Life Insurance

I read a stat recently that stated 71% of small businesses depend heavily on a few individual owners and/or employees.  This number makes quite a bit of sense, once you consider the limited resources most small businesses have to work with.  It also presents a great deal of risk.  Losing a key employee, manager, or professional could easily be the death knell for businesses without much bench strength.

To protect themselves, their families, and their businesses from this possibility, many business owners use life insurance.  As you probably know, life insurance comes in many shapes, sizes, and forms.  Depending on your business and objectives, there is probably a way to minimize the risk of your or your colleagues’ premature death using life insurance.

There is a lot to write about on this topic – in part because there is such a wide variety of life insurance products available.  This post will review 8 considerations when protecting your business with life insurance.  If you’re dipping your toe into the subject for the first time, this is a good place to start.

 

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