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  • Writer's pictureTheresa Barnard

Business Exit Planning & Business Operating Systems

In the past week, I’ve found myself in more than one conversation about business exit planning. It makes sense, there are a lot of small businesses that are owned by members of the Baby Boomer generation. What happens to these companies as the current ownership structure ages out? Hopefully, at a minimum, there is a solid succession plan in place that directs the orderly transfer of ownership and capital (money). It is even better if the current owners and business leaders have actively engaged in business exit planning. For the seller the obvious benefit is more money from the sale of the business. Who doesn’t want that? For the buyer the less obvious benefit is the purchase of a healthier and more sustainable company. This represents less risk for the purchaser because the company is in a stronger position; therefore, less susceptible to losing key employees and valuable customers.

Here's the deal, business exit planning isn’t something you start after you’ve decided to sell the business. Simply put, unless you’re deciding now to sell your business in no less than 3 years, there likely isn’t enough time and willingness to invest in change. You’ve heard of the phrase, “begin with the end in mind”, this is true in business planning. Okay, maybe not at the very beginning, but how about once the business has passed the launch phase and is in the growth phase. I’ll have to defer to my CEPA (Certified Exit Planning Advisor) designated friends to weigh in on when is the optimal time to start exit planning.

So why is a fractional integrator for companies running on EOS® yammering on about exit planning? Because running a company on EOS® is taking actionable steps toward strengthening the business exit plan. A few examples:

The Exit Planning Institute’s “The Business Planning Pyramid” illustrates the base layer of business planning being “Management/Metrics/Core Values/Priorities”. Adopting a business operating system like EOS® in your company strengthens these components. EOS® is a set of simple concepts and tools that address 6 key areas of your business: Vision, People, Processes, Data, Traction, and Issues. Caution, I said simple, that doesn’t mean easy!

The Exit Planning Institute (EPI) identifies the “4 Intangible Capitals” of your business: Human, Customer, Structural, and Social. In a white paper available to anyone that visits the Exit Planning Institute’s resource page there is a checklist to gauge the strength of your organization in each of these areas. Again, the application of EOS® in a company provides the system and structure to effect meaningful change in each of the 4 Intangible Capitals.

The EPI’s Value Acceleration Model takes business owners through a three-step process. The first step is to discover where they are personally, financially, and with the business. After all, you are not the business and the business is not you. The next step is to prepare personally and financially for an eventual exit, including strengthening the company. The final step is the decision point: keep the company, or sell?

Guess what? By taking action in the preparation stage you, the business owner, may discover that you now have the freedom to get back to doing what you love, are experiencing business growth, and are spending less time at work. You may decide to keep the company. An action you might take is adopting a business operating system into your business.

EOS® is not the only business operating system, it’s the one that I am familiar with and utilize. If you’re interested in learning more about EOS ®, check out their website at If you decide to implement EOS® in your company and need someone that is the right person for the Integrator seat, that’s where people like me may be able to help. Fractional Integrators bring loads of experience and skill to the Integrator seat. (Check out my blog on fractional integrators here.)

The moral of the story – go through the Value Acceleration Process long before deciding to sell. Give yourself sufficient time to build AND ENJOY the benefits of having a healthier and more sustainable company.

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