In December, our firm presented a workshop about business succession planning through the local chamber of commerce. KC and his wife Lisa (fictional names, of course) indicated that they’d like to meet with us because they knew they weren’t going to stay in their business forever, but they weren’t sure where to begin the process of planning to exit.

As we walked out of the workshop, I told KC and Lisa that we’d like to talk at our first meeting about their company and their goals. KC said, “I can save you some time. We have some ideas when we want to leave: either when I turn 65 or when our youngest child graduates from college.” Lisa added, “I’m not sure if we need to meet.

We’re already talking to lots of people about selling.”

The logical question was, “Do you mind if I ask who?”

“Of course, we’ve discussed the topic with members of our Vistage group,” Lisa said. “Then there were those two guys, each from huge financial services companies who pitched their firms’ ability to handle selling to a third party.” We were tempted to point out that selling their company to a third party would bring significant assets into these two investment houses, but asked instead whether a third party was the successor they couple had in mind?

“I don’t really know,” KC answered. “I do know that our estate planning attorney has told us that he understands exit planning and would be happy to help us sell the company. My concern, though, is that Michael Gerber says you have to grow a successful management team before even thinking about getting out.”

Lisa added, “KC, don’t forget Yolanda, my friend from the gym. We’ve talked about this and she’s with an accounting firm that handles investments.”

Wow. This couple was getting advice from books, fellow owners, existing advisors, sales people and gym buddies. We weren’t really surprised. Owners of successful companies are barraged by phone calls, brochures, emails and in-person sales pitches from all directions.

We exchanged contact information and the couple said they looked forward to meeting. Well, during my phone call with KC two weeks later, he said that they had decided to put everything on hold for a while. “Honestly, we’re just a little overwhelmed with all of the different advisors calling us and offering advice.”

Like so many owners, KC and Lisa had become paralyzed. Advice coming from sources with much to gain from a transaction blinded the couple to what was important: their goals. How do they define “a full life?” When did they want to leave their company? How much cash did they need to live the post-exit life they desired? Who did they want to own their business after they left? What, if any, legacy did they want to leave?

KC and Lisa know that one day they will leave their business. What they don’t recognize is that the more time they take to plan it: 1) the more time they have to build value in their company and 2) the more successful their exit is likely to be: successful in achieving their goals, not the goals of those selling a product. Paralysis eats up valuable time.

So, what do we recommend to the KCs and Lisas of the world?

1. Consider the source.
   • What does the advice-giver have to gain if you follow their advice?
   • Is this person talking about a product or a process?
   • Does the person have a vested interest in a particular exit path?
   • Has he or she asked about what you want your exit to accomplish?
2. Does the person giving advice have experience in all types of exits: transfers to children and employees, sales to Employee Stock Ownership Plans and private equity groups?
3. If the words, “X type of exit is the best for you” come out of their mouths, run. No one knows which exit is the right one for you without gathering information about you, your company and your goals.

These three recommendations will help you sift through the advice coming at you from all directions. Please use them. Your successful business exit depends on it.

Patrick Carroll, CFP®, CExP™  is the founder of Obsidian Business Solutions, author of Tame Your Money Elephants (Apple Ridge Press, 2016) and creator of The Lifestyle Protector Process™. He helps business owners grow their companies and meet their post-business financial and life goals. You can reach him at patrick.carroll@obsidianbusinesssolutions.com or 301.990.1165.