Most business owners don’t consider succession planning until about three to five years before
exiting. But if you want the best outcome for your personal life and your business, succession planning advisors
know it shouldn’t just be an end-of-your-career consideration.

Exit planning is business planning.

It’s no secret that business owners are usually consumed with managing and growing the business
rather than planning for its end. However, as your largest asset, your business has the greatest bearing on life now
and in the future. That’s why succession planning advisors believe that thoughtful preparation over the life of the
business gives you the best chance for maximizing your business’s value when you are ready to step down or sell. For
many business owners, that requires a shift in mindset from viewing an exit plan as an end-of-business strategy to
seeing it as a continuous business strategy. This is important because a well-conceived exit strategy will not only
help drive business value, but ensure you have a plan in place to manage risk factors outside of your control, such
as death, disability, divorce, disagreement, and distress, referred to as the 5 Ds.

The 5 Ds.

Ideally, you want to exit the business on your terms. However, unexpected events can quickly
jeopardize your plans and put your business at risk. An exit strategy addresses five of the most common risks
business owners face, which can help protect business value now and in the future.

Death

Planning for the premature death of the owner or key employees ensures your business partners,
employees, and family are not left with the unexpected pressure of handling the business. Your succession planning
advisor can help you develop a detailed plan outlining expected leadership roles and responsibilities in your
absence, creating a smoother transition for your business, and guaranteeing optimal operation for your employees and
clients.

Disability

Preparing for disability, whether for weeks, months, or an indefinite period, can help prevent
additional chaos at an already disruptive time. Disability contingency plans address how the business will continue
until your return or prepare the business in the event you cannot resume your role. Fortunately, there are ways to
help protect your income and your business in the event of a disability, which may include personal disability
insurance, business overhead expense (BOE) disability insurance, and other strategies.

Divorce

While no one wants to anticipate divorce, it’s a contingency that can massively impact your
business. Spouses are entitled to 50% of your business’s value when deemed as a marital asset. Planning helps to
manage expectations about how the business would be handled in the event of a divorce. Developing a plan with your
succession planning advisors before a divorce occurs gives you more control and helps to avoid situations that could
lead to a forced sale or even bankruptcy.

Disagreement

No business partners are completely exempt from disagreement. Though you may work very well
together right now, there’s always the chance for future disagreement. Succession planning advisors can help you
navigate the type of questions you should consider. What if you have different goals for the business? How do you
handle one partner who wishes to leave? Having answers to these questions protects you and your business with a
clear path when things get complicated.

Distress

Distress is the final contingency in your succession plan. Distress encompasses every other
external threat that could hit your business, from shifts in the market, economic downturns, property damage, debts,
and other general risks. Taking the time to consider your response to these events with your succession planning
advisors gives you an advantage navigating complex circumstances that may occur.

Start your succession plan with a buy-sell agreement.

A buy-sell agreement establishes agreed upon terms for how each of these risks should be handled.
By addressing the contingencies of death, disability, divorce, disagreement, and distress, it helps to protect the
business and its owners when faced with future uncertainty. It can also help your business today. Having a buy-sell
agreement in place provides vendors, banks, insurance companies, and clients with added confidence that the business
is positioned to withstand potential disruptions or challenges.

Let the financial professionals at Return on Life Wealth Partners help you begin your succession
planning strategy. Contact us today to set up a no-obligation first meeting.

About Return on Life Wealth Partners

Return on Life Wealth Partners is an independent Registered Investment Advisor (RIA) with
headquarters in Cleveland. The team provides comprehensive wealth planning services to individuals, families, and
business owners. By examining clients’ lives before their money, Return on Life® aligns its advice with clients’
values. With access to its Complete Family Office (CFO)ˢᴹ and Personal CFO™ services, Return on Life Wealth Partners
aims to help clients achieve the milestones that matter most to them. This personalized approach also extends to the
institutional and corporate retirement plan services available through 401(k) Prosperity®.

Investment advice offered through Planned Financial Services, a Registered Investment Advisor.
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