A Five-Step Exit Planning Process for Business Owners

You’ve owned the business for years, working through the highs and lows along the way. Now, it’s time for something new. Retirement, perhaps. Or maybe just a change of pace. But what becomes of the company you’ve built? And your personal financial investment? Small businesses often account for most of the owner’s net worth. Yet, many owners have no plans for the long term. With an experienced wealth management professional, business owners can develop a transition plan whenever the time is right and help safeguard their wealth. Consider these five steps.

1) Decide Between Selling and Succession:

This decision guides everything from how you structure the business today to how you prepare for its sale later. An advisor can help you think through pros and cons that may not be immediately obvious.

2) Identify Potential Successors or Buyers:

Making the decision early can head off disputes later and ensure the long-term viability of the company.

3) Determine Fair Market Value:

Different exit strategies may require different valuations for your business. Knowing the true market value of your business is critical to any succession plan. If you expect to pass it on to family members, the IRS requires a third-party valuation to determine any estate tax liability. Both retirement and your estate plan will hinge on that value.

4) Consider the Impact on Your Estate Plan:

When creating your exit strategy, it’s important to know the latest estate tax guidelines. If you plan to own or have an interest in the business until your death, you should account for that in your planning. If the value of your business exceeds the estate tax exemption, the excess value may be subject to a federal estate tax. A variety of techniques could be used to properly value your business and mitigate potential tax liability — while ensuring your business lives on according to your wishes. At Regions, our teams work closely with business owners to provide guidance and insights to help determine the right strategy.

5) Build a Team:

It takes a team to create a succession plan and prepare a business for a smooth transition. A Regions Wealth Advisor can help alongside a team of lawyers, accountants, and others to ensure coordination and keep your financial goals — including retirement, estate, and succession planning — at the forefront. If you need help planning for your business’s future, Regions Private Wealth Management is a resource to evaluate potential strategies that can protect your financial security.

The Expert:

Henry Moore is a Wealth Advisor for Regions Private Wealth Management.


Henry Moore / 334.230.6171 / [email protected]

Regions Bank, member FDIC, Equal Housing Lender. This information is general education or marketing in nature and is not intended to be accounting, legal, tax, investment, or financial advice. Although Regions believes this information to be accurate as of the date written, it cannot ensure that it will remain up to date. Statements of individuals are their own — not Regions’. Consult an appropriate professional concerning your specific situation and irs.gov for current tax rules. Investing in securities involves risk, including the risk of loss. This information should not be construed as a recommendation or suggestion as to the advisability of acquiring, holding, or disposing of a particular investment, nor should it be construed as a suggestion or indication that the particular investment or investment course of action described herein is appropriate for any specific investor. In providing this communication, Regions is not undertaking to provide impartial investment advice or to give advice in a fiduciary capacity. References to a company or security or links to third-party websites do not imply endorsement or recommendation. Investment Products are not FDIC insured, are not a deposit, may go down in value, are not bank guaranteed, are not insured by any government agency, and are not a condition of any banking activity.