In our last three articles, we’ve discussed the importance of exit goals and two of the three types of exit goals: foundational (financial independence) and universal (the amount of income owners want after they exit, their ideal exit date, and the party they’d like to take over the business). In this article, we tackle the third type: aspirational or value-based goals.

Values-based goals are “softer” but more emotionally compelling. These are goals owners have for themselves; their businesses; and their families, employees, communities, and others during and after they exit. Owners generally have many aspirational goals, and advisors must uncover all of them if they are to craft successful owner-centric Exit Plans.

Aspirational goals influence and often drive an owner’s decision to use a particular Exit Path. In fact, if we are certain of one thing about Exit Planning and owners it’s this: For most owners, a successful exit is not just about the money.

As an example, consider the many owners who have strong and deep emotional attachments to their companies. These owners can be reluctant to exit unless they know that their companies will retain their current culture of integrity and fairness to employees and customers. This aspirational goal of maintaining company culture may well exclude a transfer to an outside party and favor a transfer to an Employee Stock Ownership Plan or to management.

In addition to maintaining culture, aspirational goals can include:

  • Acknowledging employees
  • Family harmony
  • Owner legacy
  • Taking a business to the next level
  • Minimizing taxes
  • Community involvement
  • Retiring to pursue personal goals: travel, time with family, hobbies, etc.
  • Charitable intentions

In this article, we make the case that unless advisors recognize the importance of aspirational goals and are prepared to discuss them with their owner-clients, they are unlikely to see owners move forward with planning.

Digging for Gold

Advisors must probe their client/owners’ responses to be certain that they (and their clients) fully understand these softer, or aspirational, goals. Generally, Exit Planning Advisors kick off this discussion by asking owners to:

  • Describe their vision for their companies without them.
  • Describe their vision for themselves without their companies.

Visions can be difficult for owners to clarify and quantify, so Exit Planning Advisors ask them a series of follow-up questions. For example:

  • Why do you wish to maintain the company’s culture after you exit the business?
  • What aspects of the culture do you want a buyer to maintain?
  • Do you have ideas on how to accomplish that?

Only upon fully understanding an owner’s aspirational goals can advisors begin to recommend the appropriate actions to achieve them.

In addition to clarifying the owner’s vision, asking questions establishes the advisor’s interest in achieving their clients’ deepest wishes. When owners are confident that their advisors understand and take a personal interest in working with them to reach their aspirational goals, they are far likelier to engage them and move forward with a process that achieves all of their goals.

We hope that these articles about the importance of various types of goals have been helpful but caution that we’ve only touched the surface. It’s not uncommon to spend more time on discovering and clarifying an owner’s goals than on any other part of the planning process.

The next series of articles will describe how to understand and objectively determine an owner’s current resources (business value and cash flow, personal investments, etc.). With an understanding of owners’ goals and an assessment of their resources, advisors can begin the planning necessary to achieve their clients’ goals and aspirations.

Source: Article submitted by John Brown on Mon, 06/22/2015 – 9:38am on

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