{"id":7940,"date":"2016-03-09T16:41:34","date_gmt":"2016-03-10T00:41:34","guid":{"rendered":"https:\/\/northcali.b2bmulti.wpengine.com\/?p=7940"},"modified":"2023-04-19T19:37:02","modified_gmt":"2023-04-19T19:37:02","slug":"exit-planning-succession-planning-transition-planning","status":"publish","type":"post","link":"https:\/\/www.b2bcfo.com\/shane-campbell\/exit-planning\/","title":{"rendered":"Exit planning, Succession planning or Transition planning?"},"content":{"rendered":"

\"26b83937-703b-4e19-9d24-602c2f19dbaa\"<\/a><\/p>\n

We know. Its hard to keep up with so many terms. What are the differences between exit planning, succession planning, and transition planning? There is no right answer, but here’s how we keep the terms straight.<\/p>\n

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Succession Planning<\/u><\/em><\/strong><\/h2>\n

Succession planning is a process for identifying and developing new people to assume leadership positions. \u00a0Sometimes those individuals also assume ownership. Succession is often a generational concept. \u00a0A first-generation business owner who wants to gradually turn the reins over to the children is an example. \u00a0Successions can be great business exits under the right conditions.<\/p>\n

Exit Planning<\/u><\/em><\/strong><\/h2>\n

Exit planning is the preparation for a business owner’s financial exit from the company.\u00a0 The goal is usually to maximize the selling price. Exit goals, however, can also be to<\/p>\n

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  1. Obtain a smooth and painless exit process, or<\/li>\n
  2. Reward key employees, \u00a0or<\/li>\n
  3. Minimize taxes, or<\/li>\n
  4. Take some money off the table<\/li>\n<\/ol>\n

    There are many flavors for exiting. \u00a0They include:<\/p>\n

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    1. Gifting (as in the succession example above),<\/li>\n
    2. A sale to a third-party,<\/li>\n
    3. A leveraged buy-out,<\/li>\n
    4. A private equity recapitalization, or<\/li>\n
    5. An ESOP (Employee Stock Ownership Plan).<\/li>\n<\/ol>\n

      Each are viable options in the right circumstances, depending on your goals.<\/p>\n

      Transi<\/u><\/em><\/strong>tion Planning<\/u><\/em><\/strong><\/h2>\n

      Transition planning is different and is what we do at B2B CFO\u00ae.\u00a0 Many of the businesses we work with have the following characteristics:<\/p>\n