Five Keys to Successful Exit Planning – 1 – Your People

Five keys to successful exit planning. Your people.

If you are a business owner or a senior executive of a company that is looking at exit strategies, you need to be thinking about more than the golf course or the beach chair or the next venture that awaits your presence.  You need to be thinking about everything that makes this process difficult or terrifying or exciting or exhausting.  You need to be thinking about five keys to successful exit planning.

Because each of the five keys deserves a bit of discussion, this article is broken down into five parts to be presented over the next two weeks. We’ll look at each of the five key considerations that every business owner or key executive should be thinking about as you move toward the exit doors and a decision to sell the business you’ve built or that you are a critical part of, including your people, your legacy, the components of the deal, timing, and necessary preparatory steps.

#1 – Your People

Most business leaders talk about people being their most valuable asset. And it’s true. Without the people that handle all of the day-to-day work of a company, no matter what kind of company that is, there would be no company.  Without a strong team, the value of a company at exit would be very low.  You wouldn’t even be reading this article right now. 

So how do you make sure that you properly account and prepare for the changes your exit will have on your people?


First, your people are the ones that helped you get to this point.  Some more than others, but all of them had a hand in the success that is enabling you to sell your interests. Contrary to how most people celebrate only the CEO or founder of a company, it took a team to build a successful company. Do those workers have a stake in the company as well?

Stock Options and Bonuses

Companies have multiple reasons for not setting up employee stock option or stock purchase programs.  They can be complex, cumbersome, and sometimes even contentious. A 2001 article by the Stanford University School of Business even questioned whether they were actually good motivators or merely useful as a salary hedge.

But, among other positives, stock option plans also tend to make employees feel like they have a stake in the success of the business.  They often provide a key foundational element of team retention: people tend to stay with a company where they feel they are a “part owner”. Any questions about how much options motivate are largely related to how generous they are or are allowed to be by management and investors.

If you are about to exit and the employees you leave behind feel like they’ve been cheated or that their efforts have gone unnoticed and unappreciated, you are handing the successor to your company a serious problem, one that could result in post close issues and even litigation. Even if you never set something up before, make sure that your team is compensated either prior to selling, as part of selling, or will be compensated after the sale as a provision of the deal. This may be through a one time bonus payout or by putting in place a stock option program as part of your transition planning.

When Options Aren’t Appropriate…

Five Keys to Successful Exit Planning – Ensure your people are being taken care of financially to ensure a smooth transition.


When you sell your company to another company or even to a private equity firm or even a SPAC, your people are the ones that will be staying with the company.  You may or may not be planning to stay with the company through the transition (something we’ll talk about a little later), but your people will still be there.

Unless they won’t.  And, as we already discussed above, that can be a problem for an acquiring company. They want to know that the people who are making your company a success right now will be around. They will need them to feel assured that they can continue and maybe even accelerate the success that you have already achieved.  If your people find themselves working with new leadership who are so different from what they are used to that they no longer want to be there, that can be a serious problem as well.

Do a Cultural Assessment

The answer to this challenge is to assess the culture of your company right now and ensure that it’s a key consideration as you enter the exit planning process.  You are not just looking for a company that can afford your price, you are looking for a company that will continue to be successful with your current team.

Five Keys to Successful Exit Planning – Take company culture into account and make sure the transition doesn’t result in attrition.


Speaking of respect, it also means being respectful of your team through the sales and transition process. Not to belabor the point, but the exit planning process is not only about you. It’s also about the people that will be carrying on after you have left the building.  Thinking about financial rewards and cultural fits are a big part of treating your people respectfully as you plan your exit. But there is even more to it than that.

Succession and Transition Planning

Part of a successful and respectful exit planning process is picking the right transition team. We’ll touch on this further when we talk about the parts on timing and preparation.

Think about who will not only appreciate the need for the transition, but also who is mentally and experientially prepared to lead through that transition.

Picking the right people to help guide the company through the process also helps ensure that the people who remain with the company after the sale feel like they have been properly represented during the process.  Pick the people that the rest of the team looks up to and respects.  Those are the people that will help you ensure that your most important asset is properly represented and respected throughout the transition process.

Respect Makes for a Successful Transition

If you have treated your team well by ensuring they will be taken care of financially, that the cultural change is not so radical that they run for the exits post-closing, and that they are confident in continuing on without you because you have put the right people in the right leadership positions, you have done right by your people.

Five Keys to Successful Exit Planning – Respect for your people includes ensuring that the transitional leadership is properly planned and well prepared to continue on without you.

Up Next

In part two of this five part series we’ll talk about preserving and protecting your legacy and what kinds of considerations you need to keep in mind to ensure that everyone looks back on your exit as being well executed.

Are you ready to exit? Work with us.

If you think you are ready to start discussing exit planning for your business, contact Navvee for assistance. Our services range from a simple review and advice on your plans to putting together a full strategy, to assisting with the legal work involved for the deal, to, with direct support from our partners at True North Mergers & Acquisitions, acting as your M&A Advisor and directly assisting with finding appropriate buyers and getting you the best deal for your legacy.

We can also assist with advising you on compensation matters including stock option plans as well as with assessing your culture or setting up cultural or transition plans to ensure your people are properly taken care of throughout the exit process.

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