SUCCESSION PLANNING VS. EXIT PLANNING - WHY IT'S IMPORTANT TO KNOW

The field of Exit Planning for business owners is very poorly understood by many people. Our mission is to clarify it and make sure more businesses have a successful transition.

To the layperson, the terminology can be a little confusing. Many people believe that Succession Planning is the same as Exit Planning, but it is not. To help you clarify the boundaries of each activity when talking with clients and strategic partners, we offer the following descriptions.

Succession Planning is the process of identifying successors within a business and providing them with an opportunity to develop their skills and experience in order to replace the existing leaders of the business at a future date. Succession Planning primarily focuses on the transfer of leadership and/or management from one generation to the next within the business (or from seasoned managers to younger, aspiring managers). Succession Planning is essentially a Business Continuity approach, which is one of the critical Components of Exit Planning.

Succession planning has many nuances on its own and is best handled by an expert in this field. It includes psychology, training, and organizational design. Who plans for the successors to the leadership successors? Nanette Miner, Ed.D. does.

Exit Planning is the comprehensive analysis of all of the factors that affect a business owner, and the business's long term success after the owner has departed (in one form or another). Exit Planning addresses a wide variety of issues that are important to business owners, including their current and future life with respect to their business (its value, its employees, its position in the market), their family, their employees, and their community.

Exit Planning starts from the crucial perspective of the business owner’s goals and objectives in each of these critical areas, along with their current and projected resources (business value, personal and business financial resources), to identify the specific strategies and steps that are most likely to allow the business owner to reach his or her goals.

Succession Planning and Exit Planning are wholly compatible. Professionals in both areas frequently work together so that the succession plan for the business fits neatly into the owner’s overall Exit Plan.

An experienced exit strategist brings all the advisors together to work in the best interest of the business owner.

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