Setting Foundational and Universal Goals

Fri, 03/19/2021 - 08:00


In our last blog, we discussed the importance of the goal creation process and the vast number of benefits business owners and their advisors can expect to see from this process.  Now, let’s dive into what kind of goals you can help your business owners create.  

The goal-setting process helps your business owner clients understand what they need and what they want to attain before they leave their business. Their foundational goals will help them track what must happen before they exit. These goals typically stay consistent throughout the planning process. Their universal goals will help them achieve what they want.  Universal goals can fluctuate based on the changes that the owner wants. Help guide your owner clients to consider what they want their life to look like after the sale of the business.  

Foundational Goals  

First and foremost, the primary goal of Exit Planning is to figure out a way for owners to gain the financial independence they need outside of the business. This is the financial security owners must attain before exiting their business to maintain their lifestyle, not necessarily how much they want.  To get an accurate representation of what your owner client’s foundational goals should look like, encourage them to be precise, accurate, and realistic.  

When engaging clients in Exit Planning, every action you take with owners stems from the goal of financial independence. Unless business owners can exit their businesses with enough money to support their post-exit lifestyles, they cannot adequately pursue their other goals.  

As experts, you should show business owners three reasons why financial independence is the most important goal in Exit Planning. Your clients having financial independence means: 

  1. They can sell or transfer ownership of their businesses with enough money to fund their post-exit lifestyles indefinitely. 

  1. They have enough after-tax money from their business exits to never have to work again unless they choose to. 

  1. They can still provide for their families if they die, before their planned exit date. 

In short, financial independence gives business owners the freedom to provide for themselves and those they care about after they exit their businesses. 

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Universal Goals 

Another type of goal to help your business owner clients set is universal goals. This type of goal will help your clients decide what they want to achieve upon exiting. They are called universal goals because almost all owners want to achieve these goals upon their exit.  

We suggest that you begin by asking your owner clients these three questions to help uncover their specific universal exit goals. 

  1. After you leave the business, how much money do you want each year for the rest of you and your spouse's life? 

Whether you are an experienced financial planner or have one on your team of advisors, it’s critical to make the distinction with your clients between their financial needs and their financial wants. Many owners can leave their businesses today and meet their financial needs after they exit. However, most owners will want a lifestyle post-exit that requires growing their business value, which takes time. Having the expertise to advise owners on the financial gap between their needs and wants can make all the difference in the success of their Exit Plan. 

  1. When do you want to leave your business? And what does "leave" mean? 

Owners often have a desired departure date in mind. Often that date is based on some calculation of their readiness to step away from the business they’ve built and the time they think it will take to plan their exit and transition the ownership. The departure date from the business is one of the goals that is most often revised by owners due to the fact that it is typically secondary to their financial goals. 

  1. Who should be the new owner of your company? 

All owners must decide who they want their successor to be. By asking your clients the right questions in the beginning of the planning process, you can determine the advantages and disadvantages of each exit path and help your clients make an informed decision. As you move forward with your clients, they may gain some clarity on what they want to accomplish for themselves and their business and shift their decision. This is not uncommon and with proper planning, their wishes for the business and their exit won’t be completely derailed.  


Each of these goals are critical to the success of the overall Exit Plan. Don’t overlook these or rush these steps as they lay the foundation for the rest of the Exit Planning activities you will undertake with your clients. 

Tune in next week to get a closer look at the last type of goal we recommend you help your clients create: values-based goals. 

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