All good things come to an end, and this adage is true for business owners. At some point, owners leave their business whether voluntarily or for other reasons. When this fork in the professional road occurs, a transition or exit planning strategy can help owners navigate their and the organization’s future.
Many questions arise when considering exit planning. What is my business worth? How is my legacy going to be preserved? Who will take the reins, and what becomes of the company culture?
Since most of an owner’s wealth is concentrated in their company, an intentional transition plan can help convert hard-won value into lasting personal, family, and financial security. A transition plan also makes a difficult change somewhat smoother, since steps are outlined for those involved and there is little guesswork going into the process.
Exit planning can lead owners down many paths. The following is an overview of business exit planning options, how to determine the best choice for your organization, and how Forvis Mazars can help you throughout the process.
What Is Business Exit Planning?
Simply put, business exit planning consists of a clearly articulated guide for ownership, management transitions, and retention of long-term key employees following a business owner voluntarily or involuntarily leaving an organization. This plan helps to preserve business continuity, reiterating the need for it to be defined early (and clearly).
Good contingency planning and implementation can help prevent issues that could cripple a company down the road. It may be unsavory to consider, but loss of financial resources, key talent, employees, or customers could occur in the event of an owner emergency (disability, death, etc.) with no plan in place.
Considerations such as family succession, who a potential buyer could be, understanding the valuation of the company, and overall timing (when an owner wants to retire) are critical in determining an exit plan. Business exit planning is measured and methodical, and creating one for your organization depends on where you are starting from.
Potential Exit Strategy
Options
Exit strategies may include succession or an intrafamily agreement, third-party sale, transfer via employee stock ownership plan (ESOP), or a management buyout. Each method depends on your personal goals and organizational values.
In this sense, it is important to consider your business succession plan in lockstep with your personal wealth strategy. The two are interwoven, and broadly, your business succession or exit plan may be the cornerstone of your personal wealth plan, especially to the extent it makes up the majority of your wealth.
Succession & Family Governance
Family governance is how a family agrees to make decisions, communicate, resolve conflicts, and plan for the future so that family relationships, values, and shared assets can survive and function well across generations. In this type of general business succession, it is crucial to establish a family participation framework to set rules around involvement, ownership, and leadership; have a clear family mission statement; and balance legal documentation with clarity and alignment.
If you choose this route, a buy-sell agreement (such as a cross-purchase or redemption agreement) can be a great tool to protect current shareholders and help ensure clarity in the event of an owner’s exit. The buy-sell agreement’s purpose is to dictate the terms of a transfer of company stock, membership interest, or partnership interest.
- A cross-purchase buy-sell agreement is an arrangement where shareholders/members of the company agree to buy or sell their shares or membership interest to other current shareholders or members in certain defined events.
- A redemption agreement is an arrangement where the company agrees to buy shares from a selling shareholder at certain defined events.
Third-Party Sale
A strategic buyer, private equity or financial buyer, or an initial public offering (IPO) option are potential third-party buyers. Most often, this comes up when a business owner wants to retire with no members to buy in, no children or disinterested children to gift to, or no other succession options with estate liquidity concerns.
Employee Stock Ownership Plan (ESOPs)
Owners of closely held companies often wish to retain the company name and history, protect employees, and help preserve the communities in which they operate.
An ESOP can help address these concerns while providing a viable means of creating stockholder liquidity over time. When considering an ESOP transaction, it’s important to remember that selling stockholders can continue to manage the company, even if 100% of the stock is sold to the ESOP.
An ESOP can be a powerful tool to preserve company legacy and reward employees. However, it is critical to coordinate with key stakeholders throughout the ESOP implementation process to make sure the structure will be successful.1
Management Buyout
A management purchase can be a business transition option for owners who have built a strong leadership team but do not have a clear lineal descendant or heir to take over the business. In this approach, key management acquires ownership and continues leading the company, preserving relationships, business culture, and operations. This can provide a smooth transition since the management team already understands the business.
How Forvis Mazars Can Help
A coordinated advisory team can help business owners throughout the exit planning process. Forvis Mazars treats your exit as a process, not a product, built around owner goals. Our professionals can provide integrated services across valuation, mergers and acquisitions, capital advisory, ESOPs, and personal wealth management to help ensure that clients can access necessary knowledge for their chosen exit strategy.
We are a one-stop shop for business transition services, highlighting cross-team collaboration for a holistic approach to exit planning. For more information, please contact a professional at Forvis Mazars.
- 1“From Highways to Ownership: Trucking ESOP Retention Benefits,” forvismazars.us, March 16, 2026.
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