Skip to main content


There is More to an Exit Strategy than Spaghetti Carbonara

There are a host of business exit strategies and options;

asking key stakeholders the right questions leads to the right choice


By Tim Young


What if you went to a restaurant that served only one dish …


Buona sera, signore e signora! Welcome to Ristorante Solo un Pasto. I will serve you the finest meal outside of Roma.


Thank you! Tell us about your Agnolotti. Do you have a Frutti di Mare?


Scusi, signore. We serve only Spaghetti Carbonara. Our Alfredo sauce is like the finest silk. We thicken it with Pecorino cheese from Toscano and accentuate it with aged guanciale. Perfección!


Huh? Only Spaghetti Carbonara!? But I’d like a seafood dish and my wife would prefer a tomato sauce.


Si, signore. But our Spaghetti Carbonara is magical (chef’s kiss!).


Well, you certainly have passion for your food. We’ll trust your judgement … let’s have the Spaghetti Carbonara!


Is this an absurd scenario? In a restaurant, yes. But not when it comes to entrepreneurs planning their business exit.


Business owners often do not see or understand the full menu of exit options available to them and get pulled into the option that reflects their advisor’s specialty or core business. After all, CPAs think tax reduction, investment bankers think third-party sale, etc.


And what about the other people at the table—family members, leadership, shareholders and other key stakeholders? Sure, like Spaghetti Carbonara, a great tax strategy might be magical, but will it suit everyone at the table? Unlikely.


How do you know what you don’t know?

Exit planning is harder than it looks. There are rarely any blindingly obvious paths, at least for the thoughtful entrepreneur.


Yes, it’s a process that involves many straightforward business decisions. But those decisions are complicated by people and their professional and personal desires, as well as emotions. Theirs and yours.


This means that thinking about succession in a linear manner seldom leads to a place where an entrepreneur understands his or her full range of exit options. A successful journey begins with a host of unbiased questions that are intended to uncover the universe of issues that need to be sorted out.


It doesn’t have to be a complex process—or, complexity is optional as we like to say—but it is introspective, and it involves everyone at the table.

Who’s at the table?

The table is set for two important groups: key stakeholders and critical advisors.


Key stakeholders are those people inside and outside the business who have a tangible stake in the outcome of the succession plan and exit strategy. They include senior leadership, key management and shareholders.


The group also includes family members who work in the business and those who do not—spouse, children and, possibly, other important relatives. Children are often considered in the succession pipeline, but a common surname should not be a successor guarantee. Children may not be engaged or interested in the business. Or there may be a child working in the business who expresses an interest in ownership but isn’t ready to assume a leadership role.


From the key stakeholder perspective, the potential options are many, but maintaining the strength and viability of the entity is paramount.


Other key stakeholders include customers, suppliers/vendors, creditors, government/regulators and even communities.


Key advisors also play an important role, less so in responding to questions than in providing critical information and professional perspectives. Advisors at the table include attorneys, wealth managers, accountants/tax advisors and business strategists, among others.


An important note … conducting the process by consulting with key advisors independently of each other typically leads to a predictable result: inaction. Much will have been said and little will get done because there will not have been an unbiased voice to balance and make sense of what often are siloed and disparate recommendations.


The presence of an unbiased, outcome-agnostic voice and facilitator—one that understands and anticipates the presence of emotions— is crucial to exit planning success.


Seeking clarity: The questions begin with the end in mind.

On a broad level, questions are focused on seeking clarity and alignment among the numerical, operational and relational aspects of the business. They begin, however, with the entrepreneur and with the end—a result—in mind:


  • What do you want to do post-exit?
  • Where do you want to be?
  • Who are the most important people in your life?
  • What will be your financial/cash flow needs post-exit?


In other words, the exit strategy is determined by a tangible post-exit vision that serves as a critical emotional anchor for the entrepreneur, who—with answers to the numerical, operational and relational questions—becomes truly invested in the outcome.


Not unlike a well-crafted business plan, it sets a path that the entrepreneur can work toward while also meeting the needs of key stakeholders who have had a voice in the process.


So, when it works as intended, the visit to a restaurant looks like this:


Buona sera, signore e signora! Welcome to Ristorante Tanti Pasti! We have a wonderful variety of dishes from the most important culinary regions of Italy. The world is your oyster! Oysters are on the third page beneath our risotto.


                        I’m happy we’re here! My wife and I love having a choice!



September 18, 2023 in Estate Tax, Know your story, Legacy Planning, Succession Planning

Want Drama? Don’t Prepare for Estate Taxes

Want Drama? Don't Prepare for Estate Taxes By Tim Young & Michael Kenneth There’s something out there. Something looming. You can’t quite put your finger on it. But the air…
Read More
June 27, 2023 in Business Planning, Exit Planning, Know your story, Leadership, Succession Planning

The Care and Feeding of Employees During a Transition

Employee engagement and communications are core cultural assets By Tim Young & Michael Kenneth Transitions can be tough for employees. But they don’t have to be. Whether it’s an outright…
Read More
April 26, 2023 in Business Planning, Business Sale, Know your story, Succession Planning

What’s Your Business Worth?

What’s Your Business Worth? Really? Will it be enough to meet your needs post-exit? How do you know? By Tim Young & Michael Kenneth As humans, it would seem that…
Read More
March 28, 2023 in Business Planning, Collaboration, Know your story, Succession Planning

Business Advisors Actually Do What They Propose

Business Advisors Actually Do What They Propose A look at the difference between business advisors and management consultants By Tim Young & Michael Kenneth Way back in the 2000s, global…
Read More

Ready to discuss WealthPoint’s services?

Schedule A Call

Leave a Reply