The Foundation of Successful Exit Planning: The Triggering Event

Regal Wealth Advisors |

“An investment in knowledge pays the best interest.”

-Benjamin Franklin

As I mentioned in another post, effective exit planning is not concerned with when you plan to sell your business. Rather, it is a powerful business strategy designed to help you take control of your destiny by growing your business value now. Exit planning is also a journey—a journey in which business owners not only grows wealth by growing business value, but also makes sure they are personally and emotionally ready to move on.  

The start of the exit planning process is The Triggering Event.  The Exit Planning Institute defines the triggering event as an independent personal, financial, and business assessment that produces a range of values. Its purpose is very simple: to create awareness by enabling the business owners to:

  1. Know the current value of their business 
  2. Know the potential value of the business by following the value acceleration process
  3. Understand how personally prepared they are to exit

The triggering event is a point where the owner gains crucial knowledge that will help them take control of their destiny.  The two most powerful pieces of information that emerge from the triggering event are 1) the value gap and 2) what actions are needed to protect, build, and harvest value.  

The Value Gap

The value gap is simply the difference between a business’s value today and its potential future value. For example, assume that the triggering event yields the following information:

  • Current Value: $4 million
  • Potential Value: $14 million* 

In this example, the company’s value gap—or opportunity for wealth growth—would be $10 million.  This example illustrates the power of the triggering event; it will trigger acute awareness of opportunities for additional wealth creation. 

*The potential value is tied to a best-in-class multiple.  Therefore, this target amount is an optimal amount.  

Actions Needed to Grow Value

The second outcome of the triggering event is the identification of specific actions necessary to increase business value. This is the beginning of the action plan for achieving value acceleration and eventually a successful business exit. 

At Regal Wealth Advisors, we give our small business owners the tools and knowledge to strategically grow the value of their most important investment.   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—a process that is built upon the power of the triggering event--can be one of your most important business strategies


By John W. Packer, CPA, CEPA, MBA