Exit Planning in a Post-COVID World

Heading into 2020 many business owners had begun to advance their potential exit date as the merger & acquisition (M&A) environment appeared to be peaking. Then, the pandemic came onto the scene. Interestingly, the pandemic has ended up only serving as a speed bump for many owners looking to exit. As we begin 2021, the reality is the pandemic has actually enhanced the M&A environment. With interest rates at rock bottom levels, with the SBA and other lenders willing to incentive borrowers, and with a record amount of liquid capital (dry powder) available to motivated buyers, 2021 represents a unique window of opportunity for owners looking to exit their businesses.

With labor laws expected to become more restrictive and income taxes (business and personal) predicted to go higher, owners need to consider whether it makes sense if right now is the time to take a serious look at their exit plan.

For the “Right Company” it is a seller’s market. The right company is demanding and receiving higher valuations and higher multiples. How do you know if your company if the right company? There are a few important Value Drivers that help the right company to differentiate themselves.

Values Drivers:

  1. You have an organized and comprehensive personal financial plan (includes comprehensive tax and estate strategies) prepared by a CFP and CEPA credentialed planning specialist.
  2. You have an experienced and multi-generational management team in place that is built for the long-term future.
  3. You have all of your business accounting, financial reporting and legal documentation buttoned up and completed with the highest level of quality.

Exit planning is the design and execution of a strategy that allows owners to exit their company on their terms and conditions.

Source: Exit Planning Institute Philadelphia Chapter Panel Discussion 1/28/2021

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