Exit Planning Resembling Life Insurance

Regal Wealth Advisors |

In an earlier post, I introduced the concept of exit planning as a highly effective business strategy designed to help you take control of your destiny.  It is a relentless pursuit of continuous value growth designed to ensure that whenever a business owner decides to exit, the event will provide the wealth necessary to support a desired lifestyle. It also seeks to ensure that when the exiting owner reaches their “next act”, they are emotionally prepared to embrace this new phase of life.

I recently realized that sound exit planning is like life insurance; it ensures future security when a lifestyle ceases. It also is a strategy that is executed today to ensure a positive future outcome. True, life insurance is designed to provide security to others who are dependent upon (in this case) a business owner, while exit planning is designed to provide security directly to the actual business owner. This suggests that exit planning is distinctly different from life insurance. However, here is the compelling similarity: Both life insurance and exit planning are very effective tools to mitigate future risk.  

The Two Largest Risks of Poor Exit Planning

Failure to execute effective exit planning can adversely impact a business owner in two ways. The first is the most obvious: they will fail to realize a sale value that provides proper income in a post-exit life. The second risk is more personal and psychological, but I believe equally, if not more, important. Poor exit planning can lead to an inadequate sale price (or worse yet, no ability to sell the business) that will demoralize the exiting owner. But even if the business is sold at a desirable price, the departing owner could enter a phase of life that is unrewarding, if not depressing.   Why? Because the business owner failed to properly plan for their next act, an act that should provide at least the same level of meaning and satisfaction as what existed when they owned the business.  

At Regal Wealth Advisors, we believe good exit planning is a crucial piece of our overall life planning services. Our Value Acceleration Program gives small business owners the tools and knowledge to strategically grow the value of their most important investment. And we help business owners effectively plan for a meaningful post-exit life.  We offer the skills and knowledge of two Certified Exit Planning Advisors, Mike Zimmerman, President and Founder, and John Packer, Small Business Director. Mike and John are a uniquely equipped team with decades of combined experience in wealth management and small business consulting.

We invite you to contact our office at 717-838-3178 and schedule an appointment to learn more about how our exit planning process can be one of your most important risk-mitigating business strategies that ensures that your life’s next act will be the most rewarding phase of your life.


By John W. Packer, CPA, CEPA, MBA