As Certified Exit Planning Advisors (CEPA®), we share a common goal: guiding business owners toward a successful and rewarding exit. We also share a common challenge: too often, we are engaged when the owner is ready to Harvest, but the business itself is not. We inherit years of unaddressed risks, stagnant value, and deep-seated owner dependency.
The result? A frantic scramble to patch holes when we should be executing a smooth transaction. We are forced to tell owners their business isn't worth what they think, delaying their timeline and jeopardizing the successful and significant outcome we all strive for.
What Trips Up Our Clients: Insights from the Field
Darren Cherry, Area President and Exit Planning Lead for FocusCFO, has worked with hundreds of business owners preparing for succession or sale. He has seen firsthand what trips clients up on their journey to a successful exit. These challenges are not just "owner mistakes"; they are fundamental weaknesses in the intangible capitals that directly impact valuation and transferability, and they are the value gaps we all inherit.
- The Hero Complex: The owner handles all key sales, manages the most important client relationships, and approves every decision. While this feels like control to them, we know it's a critical risk that buyers call "owner dependence." When we inherit this, we're faced with a business whose value is tied to one person, making a successful transfer incredibly difficult.
- The Reluctant Heir: A successor is chosen based on emotional loyalty or tenure, not proven leadership capacity. We see this with the long-serving #2 or a family member who isn't ready, or may not even want the job. This leads to a shaky transition, creating massive risk for a new owner and jeopardizing the deal.
- The “It’s All in My Head” Plan: The succession plan is a collection of ideas in the owner's mind, but nothing is documented. An informal plan can't reassure buyers, guide the team through a crisis, or hold anyone accountable. When we arrive, the lack of a written plan weakens the company's structural capital and makes our job ten times harder.
- The Silent Strategy: The owner keeps the succession plan a secret, fearing it will cause panic. But we know that silence breeds fear and uncertainty. By the time we're engaged, we often have to manage the fallout: key employee departures, customer anxiety, and a culture of mistrust that has eroded the company's human and customer capital.
- Avoiding the Hard Conversations: For years, the owner has kicked the can down the road on the tough "what if" questions: What if the successor fails? What if the family fights? What if the timeline changes? These avoided conversations land on our desks as full-blown crises during due diligence, putting the entire transaction at risk.
- Waiting Too Long to Start: The owner is prompted to act by a health scare, sudden burnout, or an unsolicited offer. Because the most significant value is created over years, not months, this rushed timeline severely limits our ability to influence the multiple. We are left with limited options and a business that isn't truly ready for market.
- Confusing Equity with Leadership: The owner has a plan for transferring shares but has no concrete plan for transferring the leadership and strategic vision required to run the company. They assume ownership equals readiness—a flawed assumption that leads to failed transitions and lost value.
To help clients recognize these issues, we've detailed the specific warning signs for each challenge and the steps they can take to address them. You can learn more and find a shareable resource for your clients on our blog.
The FocusCFO Solution: Your Embedded Partner for the Build Stage
Exit Planning Institute’s (EPI®) Value Acceleration Methodology™ gives us a roadmap for successful exits. Still, the build stage is the most critical and time-intensive phase, which is the hardest to manage from a traditional exit planning advisory role. Building transferable value requires a hands-on, long-term, internal champion.
A strategic partnership can help close gaps and improve client outcomes. Correcting these gaps requires a different model of engagement, one that is impractical for most transaction-focused advisors. It requires being inside the business, week after week, driving the execution of the value growth plan.
This is why FocusCFO’s model is different. We act as Embedded Fractional CFOs.
The term "Embedded" is key. We are not external consultants. We become a central, fractional member of the client's leadership team. Our CFOs receive CEPA-supplied exit planning training; we speak your language and operate from the same playbook. In fact, the Value Acceleration Methodology is so foundational to our work that it's embedded in our company's mission: To help entrepreneurs build sustainable, transferable business value. We speak your language because we share the same ultimate goal.
Here’s how our partnership model works:
- You Identify the Need: As a trusted advisor, you determine that the client needs to embark on a multi-year value-building journey before they will be ready for a successful exit.
- You Introduce FocusCFO: You bring us in as the specialized partner for the Build stage. We deploy one of our embedded fractional CFOs to work inside the business.
- We Execute the Plan: Our embedded CFO works with the leadership team to strengthen intangible capital, de-risk the business, drive accountability, and provide clear financial reporting on the progress of value-growth initiatives.
- We Hand the Client Back to You: Once the business is strong, valuable, and truly transferable, we transition the client back to you to lead them through the Harvest stage and a successful transaction.
This partnership creates a powerful win-win. Your clients benefit from a higher valuation and a smoother exit process.
Let's stop inheriting problems and start building value together. If you're ready to create more successful exits for your clients, let's connect to discuss how our partnership model can create better outcomes for your clients.
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