One of the common themes in exit planning space is the importance of teamwork as it relates to building advisor teams, collaborating with owners and stakeholders, delegating tasks and the like. Oftentimes, the discussion around teamwork in the professional world of exit planning paves way to sports analogies, dubbing the exit planner as the “quarterback” of the team or referencing the “bench” of other advisors involved in the planning process.
While it is helpful to view exit planning in this way, these analogies often fall short in explaining the holistic nature of exit planning.
The “quarterback” or value advisor needs a captain on the other side of the play to manage the defense. The team requires a well-rounded roster of experts – financial and wealth advisors, attorneys, CPAs, M&A experts, etc. – to be sure the owner isn’t overwhelmed with the complexities of growing their business. Just as important as having the players, how well do they play together? Are the collaborative efforts of the advisor team spurring increased business value for the owner? Are the team captains moving the plan forward with respect to the owner’s ultimate exit goals?
As this article explores the all-so-important concept of teamwork, we will touch on the core principles that make a successful planning team: collaboration, communication, and strategy. Akin to the popular sports analogies, we’ll review where each player has a specific role that contributes to the success of the game, how the process requires a well-coordinated advisor team with unique expertise, engagement strategies that enhance collaboration, plus an innovative Capitaliz tool – Dynamic Revaluation – that helps with all the former.
The 21 Steps: A Team Approach
As an advisor, we’ve all had conversations with owners who view exit planning as daunting. Capitaliz Advisors who follow the 21-step process know that while it may be intimidating to owners at first, forming the right advisor team allows for a seamless journey towards a successful transition.
Each of the 21 steps in exit planning is essential, involving various specialists who can employ appropriate strategies for different plays.
Initial Assessment: Similar to the need to assess the field and opposing team before each game, advisors must conduct a thorough evaluation of the business to understand its current position. This step requires collaboration between financial advisors, business consultants, coaches, CPAs, and valuation experts to identify the key metrics and risks that impact both financial and non-financial performance and goals.
Objective Setting: Much like a team huddle or watching film, it’s important to clearly define goals. Business owners, financial advisors, insurance brokers, and legal experts must work together to ensure that the objectives of the plan align with the overall vision of an owner’s post-exit life.
Team Assembly: Just like building a team roster, it’s vital to assemble the right mix of advisors – accountants, attorneys, consultants, wealth managers, etc. – who will commit to playing their part in the overall exit plan. It is one thing for an owner to work with these advisors, it’s another for them to work in harmony with each other on the actionable steps of the plan.
Valuation: Here, collaboration between financial analysts, valuation experts, insurance professionals and others come into play to ensure the business’s worth is accurately determined. This is where the Dynamic Revaluation feature of the Capitaliz platform shines. By providing real-time updates on a business’s valuation, this tool allows all advisors on the team to make informed decisions based on the most current data, thus enhancing the accuracy and relevance of the valuation process.
Strategic Planning: The steps involved in strategic planning are akin to the game plan in any sporting event. Advisors must work closely to create a roadmap that incorporates legal, financial, and operational strategies.
The remaining elements of the 21 steps continue to emphasize the importance of inter-advisor collaboration, with each specialist contrinuting insights that strengthen the overall plan. For example, during the due-diligence phase, legal and financial advisors must synchronize their efforts to ensure all aspects of the plan are scrutinized thoroughly. Another example is the need for CPAs and governance specialists in the phase of growing and extracting value to break into new market opportunities or avoid tax consequences.
Embracing Dynamic Revaluation to Promote Collaboration
Taking a closer look at dynamic revaluation, this feature was designed to be the ultimate team-building tool. As mentioned above, Dynamic Revaluation allows owners and their advisors to continually monitor the company’s value and profitability.
This capability is key for advisors and owners because ultimately, the execution of an exit plan is a marathon, not a sprint.
Capitaliz advisors use the Dynamic Revaluation function to eliminate the “wait and see” element of planning. They can see today’s valuation attributed to four key factors:
- Economic factors like interest rates, inflation, and foreign exchange rates;
- Industry factors like technological disruption or macro-economic trends;
- Financial performance calculated by the integration of live data from a chosen accounting software; and
- Non-financial metrics that are considered to be risk factors.
The use of Dynamic Revaluation is collaborative if nature because it transforms the traditional valuation and planning process. By leveraging real-time data, advisors can monitor changes in market conditions, industry trends, and company performance, ensuring the business’s valuation reflects its current standing.
This not only enhances the accuracy of the planning process, but it fosters greater collaboration amongst advisors as they rely on up-to-date information to guide their strategies and delegate appropriate tasks.
Client Engagement Strategies Crucial for Plan Collaboration
Engaging clients effectively throughout the 21-step exit planning process is crucial for fostering advisor team collaboration. The strategies listed below were derived from a webinar presentation on the Capitaliz approach to client engagement:
- Regular Communication: Establish a routine check-in schedule that allows all advisor team members to share updates and insights. This keeps everyone on the same page and encourages a culture of transparency.
- Education and Empowerment: Just as a coach educates players about the game, advisors should empower their owner clients with knowledge of the exit planning process. Hosting informational sessions or sharing relevant content can demystify the steps and spark client confidence.
- Feedback Loops: Consider creating or sharing a feedback mechanism that allows clients to express their thoughts and concerns. This not only improves the planning process but strengthens the advisor-client relationship.
- Celebrate Milestones: Recognizing and celebrating key milestones in the exit planning journey can motivate the team and keep clients engaged. This is yet another instance where Dynamic Revaluation can come into client engagement making it easier to track progress and pinpoint these key milestones.
- Tailored Strategies: Understand that each client’s needs are unique. Customizing engagement strategies to fit individual client circumstances can lead to better outcomes and more effective teamwork.
Conclusion
With respect to all the sports analogies out there, it’s wise to remember that success in exit planning, much like in sports, hinges on teamwork. Each advisor plays a vital role, and by working collaboratively through the 21 steps – enhanced by innovative tools like Dynamic Revaluation – business owners can navigate the complexities of exiting with confidence and clarity.
By employing effective client engagement strategies, advisors can ensure that their clients remain informed, involved, and invested in the process. After all, both in sports and in business, teamwork makes the plan work.
For another take on collaboration in 21-step exit planning from Capitaliz VP of Client Relationships, check out his article here.
