CARING FOR THOSE WHO CARE FOR OTHERS
Many caretaker-owners of adult care homes, family care homes, and home care agencies ask, “what is an Exit Plan?” Simply put, an Exit Plan is your roadmap to leaving your operations for others so you can move on to the next chapter of your life.
WHAT IS IT?
An Exit Plan is a written, planning document that contain your personal, business, and financial goals and milestones you want to achieve when you exit your adult care operation. It includes information such as -
How and when will I exit the operation (e.g., through sale, merger, illness, disaster)?
How will I transition away from the operation?
What will I do after my exit? Will I work again or retire?
Where and how will I live? What income will I have?
How much will I have in cash, other assets, and liabilities?
What health and insurance coverage will I have?
What will be my legacy to my family, employees, and community?
EXIT PLAN (cont'd)
WHY DO I NEED ONE?
One thing is certain - - - you will exit your operation at some point. The question is, “will you control how and when you exit?” Your sudden illness or an illness of a family member could make you unable to run the operation. Some say that a small operation can lose as much as 50% of its enterprise value when the owner-operator is unexpectedly absent more than 3 months. An Exit Plan helps mitigate the “5 Ds” of owner unforeseen risks: Death, Divorce, Disagreement, Disability, and Disaster.
WHO DEVELOPS AND IMPLEMENTS IT?
You work with a team of professional advisors who develop and implement it –
Business Broker – establishes business financial and operational goals, target enterprise Exit sale price and deal structure. Learn More.
Financial Advisor – manages cash and asset portfolio goals and targets with interim milestone reviews. Learn More.
Insurance Advisor – designs and recommends products and services to mitigate business and personal risks and uncertainty; healthcare coverage. Learn More.
Attorney – estate planning, wills, and other documents; transactions. Learn More. Learn More.
Certified Public Accountant – measuring financial performance; tax strategies. Learn More.
These professionals work as a team to develop, set goals, measure, and modify (as needed) the Exit Plan.
WHAT INFORMATION IS NEEDED?
The Exit Plan needs qualitative and quantitative information from you. Each professional has unique requests. In general, qualitative information may include –
Desired lifestyle after Exit
Personal legacy requirements
Quantitative information may include-
Tax returns (personal and business)
Financial statements (personal and business)
Desired Sales Price of Operation at Exit
WHEN SHOULD I DO AN EXIT PLAN?
Earlier is better. At least 3 years (preferably 5) before your planned exit.