For new exit planners stepping into the advisory field, it’s easy to feel overwhelmed by the complex, multifaceted nature of guiding owners through a successful business exit or transition. In a presentation put on earlier this year, Capitaliz VP of Client Relationships, Sam Walters, shed light on six common pitfalls many new exit planners encounter, offering practical insights and solutions to help advisors avoid these missteps.
Curated through years of industry experience and daily conversations with advisors, these tips are essential for those just beginning to navigate exit planning challenges in both working with owners or developing your practice.
Discover each of the six pitfalls below, paired with innovative Capitaliz tools available to empower new and experienced advisors in their exit planning journey.
Pitfall 1: Not Following a Defined Process
A structured approach is vital for success in exit planning, especially when it comes to growing and accelerating business value. Many new advisors fall into the trap of piecing together solutions in their practice, leading to inefficiency and inconsistency. Further, the use of a proven and systematic process is viewed as more credible and reliable in the eyes of the business owners who are considering hiring you for these services.
Capitaliz Solution: The 21-Step Process
Capitaliz offers a clear 21-step process that provides a roadmap for advisors to follow, from initial discovery to executing the exit. This process brings clarity, helping advisors confidently manage each stage and ensure nothing falls through the cracks. The 21-step process, coined by Capitaliz founder, Craig West, follows five stages of values and aligns very closely to the Value Acceleration Methodology that is used by many CEPAs in the EPI Network.
This process has helped many advisors from a psychological standpoint maintain confidence and structure as they navigate owners through their journeys, as well as give them a competitive edge in the exit planning marketplace.
Pitfall 2: Need for a Diagnostic Tool to Set the Tone
Without an initial diagnostic, advisors can struggle to assess a business’s current state and set realistic, measurable goals. Initial conversations about business value and planning can make or break an advisor’s ability to win an engagement, and it sets the tone for the relationship from the start.
Capitaliz Solution: The Business Insights Report
With the Capitaliz Business Insights Report, advisors can gain a comprehensive view of a business’s value, strengths, and weaknesses right from the start. This diagnostic tool, often referred to as the ultimate “triggering event,” establishes a clear direction and serves as a benchmark to track progress, providing both the advisor and the business owner with valuable insights for decision-making.
This is crucial in early phases of exit planning especially as advisors quickly realize that their clients are not always aware of the reality of their current business value, much less what it will take to get them to the valuation they need to exit on their terms. Using a robust tool like the Business Insights Report adds credibility and data-backed insights to the numbers you’ll report to your client, and the recommendations that must be put in place to improve the value over time.
Pitfall 3: No System to Automate and Communicate Progress
Managing progress without an automated system can lead to missed deadlines, client dissatisfaction, and inefficient time management. It can also make it extremely difficult to relay information to and from the owner and the other members of the advisory team without a central location to do so.
Capitaliz Solution: Dynamic Revaluation and Action Item Console
Capitaliz’s project management functions and an action item console enable advisors to update valuations regularly and track actionable steps in real time. The project management dashboard consolidates tasks, making it easy to communicate milestones and keep clients engaged, thus enhancing transparency and accountability.
Dynamic Revaluation, another tool that works in conjunction with the dashboard, gives advisors the ability to show owners the direct impact that certain tasks will have on the value of the business. This illustrated impact can not only be used to help make projections on performance beforehand but can also be tracked through the process as tasks are complete – serving as a tool means to emphasize the immense value of your advice.
Pitfall 4: Inability to Collaborate with Other Advisors
Exit planning requires the expertise of multiple advisors, and failing to collaborate effectively can lead to disjointed guidance for clients. To properly prepare the business for sale or transition, advisors of different specialties must be brought in to handle different steps in the defined process.
Capitaliz Solution: Collaborative Framework and Project Management Dashboard
Capitaliz’s tools make it simple for advisors to collaborate, providing shared platforms and plan management features that help organize and streamline communication with other professionals. This advisor collaboration through guest advisor access ensures that business owners receive comprehensive support and expertise from all necessary advisors.
The system also provides you with the ability to delegate and assign tasks directly to the adjacent advisors so that each item in the plan is being monitored through one central location.
Pitfall 5: Integration Challenges with Exit Planning and Core Practices
Advisors who try to integrate exit planning into their existing practice without the right tools often face roadblocks, as it can disrupt their workflow and strain resources. Even if you don’t desire to be at the head of the table, having a seat at the table still involves some level of exit planning integration.
Capitaliz Solution: Value Gap Assessment
The Value Gap Assessment tool allows advisors to identify and measure areas where the business may be undervalued and what risks are at play, tying it seamlessly into ongoing business advisory services. This integration helps advisors naturally extend their services into exit planning, showcasing value to clients without deviating from their core practice if that is the intention.
Pitfall 6: No Specialization
When advisors lack specialization, they risk diluting their impact and value proposition in the marketplace. Each of the 21-steps requires a different level of expertise in specific areas and no one advisor can do it alone.
Capitaliz Solution: 21-Step Process and Implementation Roadmaps
The Capitaliz platform encourages advisors to follow a structured approach, which fosters specialization. Adopting the 21-step process and using implementation roadmaps help advisors hone their skills in the exit planning process, defining their role in it, and providing a framework to develop expertise and improve service delivery.
Practice specialization in exit planning not only sets advisors apart but also attracts clients looking for targeted guidance and experience.
Moving from Pitfalls to Proficiency with Capitaliz
Capitaliz offers an array of tools to turn potential pitfalls into points of strength, allowing new exit planners to streamline processes, automate workflows, enhance client collaboration, and build specialized expertise. With Capitaliz solutions, new advisors can confidently deliver value to clients, helping them achieve a successful and rewarding business exit.
To watch the recording of the webinar presentation on this topic, click here.
