Business PlanningFinancial Education

Business Exit Planning

By May 19, 2023 No Comments

Establishing a plan to exit your business can be tricky. Here’s how a business owner can exit and still maintain their goals.

Exiting a business takes positioning and planning years in advance. It is our experience that business owners who have been successful in making the transition out of their business started at least three to seven years in advance of that actual deadline. First and foremost, one of the most important steps is determining the business’s overall value, but studies show that only 2% of business owners typically know their business value [1], meaning that so many are left ill-prepared to make their next move.

Most business owners want to make sure that they can exit their business efficiently while protecting their employees. In this case study, we’ll take a look at James. James is a business owner on the cusp of retirement, looking to sell his business in the near future and fund his desired lifestyle with the proceeds. In constructing his plan, he had three primary goals:

  • Potentially pass ownership of his company to his employees.
  • Provide for his family and his eventual retirement.
  • Continue his charitable work.

Working With a Financial Advisor

As the sole proprietor, most of the time the only financial things James thinks about are business-related, which means his personal goals can be overlooked. Working with a professional financial advisor motivates him to save money, invest in his retirement and diversify his assets. For James, working with a financial advisor is not just limited to money-related matters. It also encompasses his life goals.

In this case, because charitable planning is so important to James, his advisor helped him set up a donor-advised charitable trust. It’s a way to donate money to charity in a tax-advantaged way using gifts of appreciated stock. But depending on their goals, other business owners might choose to set up a buy-sell agreement with key employees or relatives who work in the business, sell the business outright or choose another business succession option.


The financial independence and retirement of business owners are often tied to an eventual sale of the business. Business exit planning is the process of preparing a business owner for the eventual sale or transfer of their company by creating a comprehensive plan for transferring ownership, protecting assets, minimizing taxes and maximizing the value of the business.

Working with a financial advisor to analyze the value of your business and assemble a custom plan to exit can be extremely valuable, helping to keep your legacy intact while providing for yourself in retirement.

To learn more about potential plans to exit your business while continuing your legacy, please give Sylvan Financial Advisors a call at (201) 282-5332.

This is a case study and is for illustrative purposes only. Actual performance and results will vary. This case study does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted. This case study does not represent actual clients but a hypothetical composite of various client experiences and issues. Any resemblance to actual people or situations is purely coincidental.