The Key Players on a Winning Team: How to Form a Successful Exit Planning Team

Nothing brings an office, friend group, or family together quite like a March Madness Bracket. You might spend hours analyzing the 64 teams, pouring over the statistics of each player, researching the coaches’ history, and making deliberate choices for the Final Four. On the other hand, you could forget to fill out your bracket until the last minute and choose the Final Four based on unimportant factors. You could choose your favorite color, if you have even heard of the school, or, our personal favorite: the weirdness of the team mascot. 

Now, those who spend the time to adequately research each team are much more likely to have a successful bracket. However, if you get lucky each year with your random team selections, you will not be particularly motivated to do your research. 

Think of this in terms of an owner’s business. A business owner who takes the time to meticulously research best practices, build value in their organization, and plan for their ultimate goal: exiting their business, will have a much more successful and significant company at the time of exit. Conversely, the owner who waits until the last possible minute to execute their exit strategy will not have the correct team in place to successfully transition their business. 

What makes for a winning exit planning team? Who should an owner have in their court to effectively transition their company? 

We spoke with Landon Mance, Co-Founder of Backbone Planning Partners, and Kim “Mo” Mahoney, Financial Professional and Small Business Owner. We were eager to understand how they work on an owner’s transition team and how collaboration enhances exit strategy.  

Who’s On The Team?

An NCAA Men’s Basketball team is comprised of a Center, Power Forward, Small Forward, Point Guard, and Shooting Guard. Each member of this team has their own unique skillset. The team, as a whole, works to shoot as many baskets as possible and prevent the opposing team from scoring. If one member of this team is not operating at best in class performance, the entire team could suffer. 

A business owner’s exit planning team includes specialized advisors, family members, and members of their company’s leadership team. According to our 2021 New York State of Owner Readiness Report, the use of outside resources – in particular a board of advisors including non-family members, usually results in an increase in successful business transitions and higher valuations. Additionally, 78% of business owners indicated they had a formal transition team.  

An owner’s team is split into categories: the Core Team and the Functional Team.

The Core Team

The core team consists of, at a minimum, a CPA, Financial Advisor, Value Advisor, and an Attorney. For the owners who said they had transition teams in our latest State of Owner Readiness Report, the corporate attorney (61%), the wealth/financial advisor (56%), and their insurance professional (52%) were the most highly selected professional advisors to be named to the transition team.

Think of the Core Team in terms of positions on the basketball court. 

The Attorney = The Center

An attorney works to protect an owner’s assets. This aligns with a Center that protects the basket. 

The Financial Advisor = Shooting Guard

A financial advisor works on growing wealth for their owner and “scoring big.” Often the Shooting Guard is the best shooter on the team and helps score big on the court. 

The Value Advisor = Small Forward

A Small Forward is considered the most versatile player on the team, helping in all areas of the game. A value advisor looks to grow value in all areas of an owner’s business through a holistic model. 

The CPA = Power Forward

Power Forwards score for their team and defend the team from the opposing team. A CPA assists owners in mitigating taxes and strengthening their personal and business finances. 

The CEPA = Point Guard

The Point Guard is often referred to as the “coach on the floor” and provides the team with direction and a unified strategy. A Certified Exit Planning Advisor is often the owner’s most trusted advisor and directs the transition team with a unified and holistic exit plan. 

The Functional Team

The functional team consists of a Risk Advisor, Estate Planning Advisor, Family Advisor, Banker, M&A Advisor, Family Members, Board of Advisors, and/or Management Team.

Our 2021 New York State of Owner Readiness Report showed 8% of owners said they used their board of advisors as their transition team, which is not recommended. The skill sets needed to transition a business are very different from the skill sets of members who sit on the owner’s advisory board. However, both are necessary and play distinct roles in supporting the business owner.

How a CEPA Leads an Owner’s Team

A CEPA is trained in the holistic management of a business and the owner’s goals. A Certified Exit Planning Advisor can be any type of professional advisor who works with business owners. Earning CEPA doesn’t change your expertise, it enhances your ability to engage business owners and prepares you to have value-added conversations around growth and exit. CEPAs manage an owner’s personal, business, and financial goals to ensure they have a successful exit. 

According to Kim “Mo” Mahoney, a CEPA “provides the ‘big picture perspective’ and a confident and collaborative culture to build the best team to deliver the best results for the business owner and everyone in their financial lives. Including the owner’s family, employees and their families, clients, community, etc…”

The Importance of Accountability and Trust

Without holding team members accountable for their plays, a basketball team fails to grow and improve. Accountability is the backbone of any successful team. Mahoney highlights that trust is one of the foundational characteristics of a strong team. He says, “Give respect, be open to ideas, and do not worry about who is getting direct credit for the immediate item at hand. Moreso, ‘play the long game’ with an unwavering focus on the business owner as the center of all our actions and coordinated efforts.”

Landon Mance shares, “Everybody needs to be clear on what their role is and how they’re going to add value to the exit process. Trust and accountability are table stakes nowadays. If the exit planning team doesn’t have these, at a minimum, it’s a non-starter. The real magic happens when those traits exist and the team has absolute clarity as to what the owner’s objectives are relating to the business, their family, and their personal financial situation.”  

Managing Goals As a Team

On a basketball team, each player has their own specific set of skills that make them indispensable on the court. However, they all must work together to accomplish their shared goal: to win the game. On an owner’s team, advisors must work collaboratively to manage the owner’s business, personal, and financial goals. Landon Mance shares, “There must be someone who is the responsible person for leading the team and addressing all the important elements that embody a successful exit planning engagement.” 

Mahoney emphasizes the importance of transparency among advisory team members. “By having transparent and direct communications and confirming with the business owner that the steps being placed are meeting their goals, the team is better suited to manage all goals. Check-in with the owner and share, ‘this has been accomplished by this person on your team in order that you get you the tax reduction, investment, asset allocation, retention, etc.”

The Benefits of Collaboration

Mahoney shares, “Collaboration is critical as you balance bringing your own experience and advanced tactics and integrate them with the existing advisors’ long-standing and trusted relationship with the owner. Essentially we collaborate and discuss various options then let the existing advisor present so as to keep the existing advisors’ credibility with the owner. This allows us to focus completely on maximizing the best results for the client and avoid unnecessary friction or ego.” 

Mance says, “Collaboration is probably the most important element when planning for and executing on an owner’s exit. When you put a group of smart people together, who hopefully have the same intention – a successful process and transition of a business – you can make beautiful things happen for an exiting owner. Without this, decisions get made in a vacuum, opportunities are overlooked, and the end result won’t be as positive for the owner.”

Business owners that surround themselves with a holistic team of advisors and trusted professionals will be more successful in their business transition. Whether that be a sale to a third party, private equity, an ESOP, a family transition, or any other exit option. 

What advisors are on your team? And are you ready for a win? 

Learn more about each player on the exit planning team at our 2022 Exit Planning Summit. Join us in Scottsdale, Arizona this May!

Register for the Exit Planning Summit!