Exit Planning vs. Succession Planning
For business owners, terminology pertaining to planning services can be a little confusing. Many owners believe exit planning is the same as succession planning, but they are not.
Succession planning is the process of identifying successors from inside the business and developing their skills and business acumen so that they can eventually takeover the leadership role in the future. The focus is on the transition of leadership and management, not necessarily ownership transition.
Exit planning is a comprehensive process of analyzing all the important factors (business, personal and financial) that impact an owner. These include current and future planning with respect to business value, it’s employees and its position in the market, as well as the owner’s family and their community. The owner’s goals are coordinated with his or her current and projected financial resources (personal and business). This identifies the specific strategies that are appropriate for the them to work towards their goals.
Exit planning and succession planning are not incompatible. Both fit together into an owners overall planning needs and professionals need to work together to pursue a successful outcome.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.