Lupberger: What Business Owners Leave Behind After an Exit

Implementing Aspirational Value-Based Legacy Goals for a Successful Exit

authors David Lupberger   | November 2, 2020

You will be leaving your business. That is inevitable. All business owners will exit their businesses, either by choice or as circumstances dictate (e.g., death, incapacity).

Ideally, we want to exit on our terms:

  • Leaving our businesses in the hands of successors that we have chosen
  • For the money we need and want
  • On a date we pick

This can only happen when there are clearly stated goals that the business owner creates to guide this business transition.

I want to tackle another goal that should be part of every business owner’s planning process: aspirational or value-based goals.

Over  time, owners have shown me that they had other goals for their business exits, goals that were far less objective (i.e. based on sentiments, attitudes, or feelings) but no less important for being  non-monetary and less tangible.

More Emotionally Compelling

Owners generally have many aspirational goals, and competent advisors must uncover all of them if they are to craft a successful exit plan.

Aspirational goals influence and often drive an owner’s decision to use a particular exit path. If I am certain of one thing about exit planning and owners, it is this: for most owners, a successful exit is not just about the money.

I have found that value-based goals typically determine an owner’s choice of a particular exit-strategy or path. Indeed, they often determine when an owner chooses to leave his or her business. A sample of value-based goals is by no means exclusive but often include the following:

  • Family harmony
  • Owner legacy
  • Acknowledging employees
  • Taking the business to the next level
  • Minimizing taxes
  • Maintaining culture
  • Community involvement
  • Quality retirement
  • Charitable impulses

A question a business owner may want to ponder is, “what are the likely consequences to others of transferring my ownership as I intend?” Discussing this topic with spouse, exit planning advisor, or perhaps an owner who has already exited can provide an owner with insights on what will happen to the business, and to you, after exit.

Let us look at 2 common values-based goals:

 Family Harmony

The first among values-based goals is family harmony. What is it? As the father of one son, the answer is elusive.

Usually, owners consider family harmony when contemplating a transfer to children. Some decide to sell instead to an outside party or management rather than the potential travails and issues of transferring the business to one or more children.

While choosing an exit path, it is ultimately up to you.

However, without the support of that choice from your spouse or family, the road to a successful exit can be rough and one’s golden years may be severely tarnished. Even if you hadn’t thought a making family harmony a goal worth working for and achieving, your spouse may feel differently. For that reason alone, I suggest you adopt it as your goal as well.

Owner Legacy

Legacy is a strange goal — it is more about what you don’t want to happen when you exit your business. Many owners do not want their companies to disappear as beneficial influencing forces in their communities. Your company may well be part of your community fabric.

You may have created a company that is a good citizen of the community and known for its honest dealings. You are likely justifiably proud to have started and owned a company that has provided you and your employees a good living over many years.

Imagine that you might not want all that to disappear simply because you do not own it anymore.

Owners justifiably fear that in selling or transferring their businesses, that the company identity that they have worked so hard and risked so much to create will disappear.

If you share a desire to see your company’s legacy maintained, bring these aspirational goals to the attention of your exit team of advisors. If want your legacy to live on, all is not lost. Talk to your transaction advisors before you move forward with the sale process. Your advisors need to clearly understand and agree to any restrictions and requirements you set regarding the character and culture of the new owner. You can negotiate the right to refuse to sell to someone you believe will disrupt the values you have created in your business, without any financial penalty.

HBI, labor shortage

Good business owners have strong and deep emotional attachments to their companies. These owners can be reluctant to exit unless they know that their companies will retain their current culture of integrity and fairness to employees and customers. This aspirational goal of maintaining company culture may well exclude a transfer to an outside party and favor a transfer to family or to current employees.

If you suspect that no 3rd party will maintain your legacy, you may want to look again at a transfer to your children or key employees. A transfer to them may mean less money but that may be a tradeoff that you are willing to make, provided your financial security is secured. If you have the time to plan and implement (say 5 to 10 years), a transfer to insiders may well generate as much money as a sale to a 3rd party with no greater risk.

Like all exit goals, the earlier in the planning process that you establish this goal, the more options you and your advisors will have to make it a reality. In this case, by making legacy a goal at the outset, it is likelier that you can design an exit that continues your legacy without impacting your financial future.

Digging for Gold

Visions can be difficult for business owners to clarify and quantify, so it can be valuable for an owner to answer the following questions:

  • Why do you wish to maintain the company’s culture after you exit the business?
  • What aspects of the culture do you want a buyer to maintain?
  • Do you have ideas on how to accomplish that?

Only upon fully understanding an owner’s aspirational goals can exit advisors begin to recommend the appropriate actions to achieve them. When owners are confident that their advisors understand and take a personal interest in working with them to reach their aspirational goals, they are far likelier to engage them and move forward with a process that achieves all of their personal and financial goals.

This conversation is at the core of any successful business exit and transfer.  To learn more about this process, please contact me at


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