Small business owners already have a lot on their plates, which means the exit planning process needs to be as clear, structured, and coordinated as possible. Ergo, proving your worth and mettle as an advisor comes from clarifying, structuring, and coordinating the exit planning process in a way that makes their lives better and businesses more valuable.

Doing so requires building strong systems, articulating clear deliverables, and gaining a holistic understanding of your clients and their businesses. Of course, to build those systems, articulate those deliverables, and gain that level of insight, it requires a massive administrative lift.

But what if there was a faster way to arrive at, pass through, and make the most of the Discover Gate?

What if advisors could spend more time helping business owners protect, build, and harvest their personal and business wealth and less time parsing through paperwork?

What if there were a way to show owners the value and results of their actions at every step of the exit journey?

To help you help your clients earlier in the exit planning process, ELLA, a digital workbench for trusted advisors, discusses the nuances of the Discover Gate, how to turn insights into initiatives, and a tool for saving time and building trust during the fact-finding process. Additionally, we underscore the importance of helping business owners harvest this value and how, cumulatively, the businesses that sell in the next decade will likely change the entrepreneurial landscape for generations.

Undiscovered Value

The Value Acceleration Methodology, coined by Christopher Snider, CEPA, CEO of the Exit Planning Institute, and author of Walking to Destiny: 11 Actions an Owner Must Take to Rapidly Grow Value & Unlock Wealth, has become the preeminent approach to exit planning, and for good reason. As a framework, it holistically aligns a business owner’s business, personal, and financial goals to guide them in creating value and measuring performance.

The Value Acceleration Methodology has three gates:

1. Discover

2. Prepare

3. Decide

Effective exit planning requires a gating structure in which the exit team or a designated individual within the team must meet specific criteria to proceed to the next stage in the exit process. As a trusted advisor, you’ll likely be at the helm of the Discover Gate, articulating the precise deliverables needed to proceed, keeping the exit planning process on track, and ensuring accountability.

It’s during the Discover Gate, or as ELLA calls it, “fact-finding,” that advisors are positioned to deliver a business valuation (a baseline measurement of business value), determine owner needs, and create a prioritized action plan. Together, these three initiatives create what Snider calls a “Triggering Event” that ignites a business owner’s exit planning journey.

Identifying the current value of the business and how it stacks up to others in the market is an essential product of completing the discovery gate for several reasons. First, as Snider notes in Walking to Destiny, 80% of your client’s net worth is locked in their business.

It’s your job to show them how to unlock that value. That means you’re showing them how to protect it, build it, and eventually, harvest it. The only way you can do that is by showing them the value they currently have and how it stacks up against competitors in the market.

It’s kind of like a “You Are Here” icon on a map. An owner needs to know where they are in order to know where to go. Once they know what direction they’re heading in, you can help them with three mission-critical actions:

1. They must maximize transferable business value

2. Prepare financially for a lifestyle without the income from the business

3. Plan personally for what they will do in their next act after exiting the business

Whether it’s ten years from now when they go to market, or it’s next quarter when they release a new product, business owners rely on the formal business valuation that fact-finding produces to maximize value. Remember, strong exit planning produces value at the sale and every day, week, month, and year leading up to it.

A lack of formal business valuation is one of the biggest reasons so few businesses sell successfully, and perhaps more importantly, why so many owners regret the decision afterward. Until that Trigger Event occurs, most owners are unsure of the:

• Actions needed to increase value and decrease risk

• Business’s attractiveness and readiness to sell

• Challenges of retirement

• Current market value of their business

• Strengths and weaknesses of their business

• Value gap between personal and business finances

The depth and detail of fact-finding depend on your preferred process, the business owner’s readiness, and the industry/sector of the business. That said, proper fact-finding should result in at least two core deliverables: A baseline business valuation and an action plan.

Building Trust & Gaining Clarity

A coordinated and collaborative exit team demands an organized and thorough fact-finding process built on trust, understanding, and facts. Advisors should always begin with a thoughtful, open-ended conversation rather than jumping straight into document requests or spreadsheets. Some of the most valuable insights often surface through discussion, especially when the owner is encouraged to reflect on their motivations, concerns, and goals.

When you actively listen and ask perceptive questions, you can reveal critical details about leadership gaps, risk areas, and various intangibles that simply won’t show up in financial, legal, or governance documents. Taking the time to start with an open dialogue lays the foundation for a more personalized and effective exit strategy.

When you feel like you have a thorough understanding of the business owner's soft goals and timeline, then you're ready to dive into the hard facts and figures. To achieve a holistic overview of an organization, you’ll want to ask business owners for:

With the right documents in place and goals defined, you can now build an action plan that aligns the owner’s personal and professional objectives, all of which are now grounded in facts, not assumptions.

This Trigger Event helps business owners finally take a step back—often for the first time—and see their business as a valuable, transferable asset. At the same time, it brings to light potential risks, forces them to make personal and professional goals, and reveals where they are in relation to the financial future they’ve envisioned.

It’s important to note that fact-finding isn’t a gate you need to pass through just once. While it may not be as intensive every time, a version of fact-finding should occur every 90 days or so, using new data and information to empower exit teams and owners to create more value in the business. Likewise, fact-finding isn't about committing to a sale; it's about positioning the business for better exit opportunities and giving the owner more control over timing, terms, and outcomes.

The ‘Busy Work’ Of High-Quality Advising

The problem is, the administrative burden of a thorough, holistic approach to fact-finding consumes a ton of time. Rather than spending time on strategy, insight, or owner coaching, “busy work” shows up in the way of:

Between parsing through documents and generating reports, it’s easy for advisors to spend more time on paperwork and organizational tasks than advising and consulting with the business owner to grow the business. Then again, the facts buried in financial documents and the insights nested in discovery questions are essential to the process. Herein lies the dilemma: When there are so many hours in the day, do you spend more time on admin or most time with the owner?

Every hour spent assembling documents is an hour not spent uncovering hidden risks, shaping strategy, and strengthening the owner’s confidence. Nevertheless, administrative work is what gives you the insights you need to maximize value, develop a plan, and earn an owner's trust.

In traditional methods of exit advising, a trade-off eventually emerges between the depth of insight and the speed of delivery. Should I create a thorough analysis that takes too long or quickly deliver a report that lacks nuance? Lean too far in either direction, and you’ll either lack visible momentum or provide weaker recommendations.

To speed up the process, advisors eventually find their own method of standardizing processes and boilerplating deliverables. However, this approach is challenging to balance, as custom deliverables build trust and make owners feel seen, but customizing everything is simply unscalable.

Because exit planning is inherently a team-based process, there is also a constant tension between collaboration and coordination. The more people on the exit team, the more time advisors spend aligning, reminding, and reconciling.

Finally, there is a balance between quality and burnout. High-quality exit planning demands empathy, integrity, and patience. But, advisors can’t sustain these qualities at scale when overwhelmed by operational noise.

It’s this precise conundrum that ignited the creation of ELLA. To help advisors spend less time on paperwork and more time with clients, ELLA offers an AI-augmented fact-finding and sensemaking tool that turns business data into actionable insights.

As you’re working through the Discover Gate, you can use ELLA to coordinate and collaborate with the entire exit team, giving your client a front row seat to what matters most: exit goals, personal timelines, wealth targets, and ownership expectations.

Owners and advisors alike will also enjoy ELLA’s soon-to-be-released Value Chain feature, which maps value across growth cycles. Or, put simply: clients can see precisely how their improvements stack up over time and contribute to increased value.

With all of your data and goals in one place, using ELLA as your central hub for fact-finding shortens deliverable timelines each time you return to the Discovery Gate. Ultimately, this digital workbench for advisors streamlines the discovery process, strengthens client relationships, and makes more effective exit strategies. From onboarding to exit, ELLA will help you ask better questions, provide deep insights, and generate an actionable exit plan without the time sink of back-office tasks.

Why It Matters: Being A Driver Of Change

According to Snider’s research, there is a massive stockpile of privately held business wealth locked in American businesses, somewhere to the tune of $18 trillion. Unfortunately, as exit planning stands now, only 20% to 30% of businesses that reach the market will actually sell—meaning roughly $13.5 trillion is on the line.

To be clear, when small businesses fail to sell, the wealth tied up in them doesn’t just vanish. Rather, it moves. And, it usually moves away from the people who built it and the communities in which it was built. Therefore, trillions are at risk of drifting away from the hands of founders and families and into private equity portfolios, public markets, and large consolidators, not because the businesses lack value, but because many owners are not exit-ready.

To make matters worse, many Baby Boomers and Gen Xers are ready to retire. According to the United States Census Bureau, 51 percent of business owners are 55 or older. If we know there are about 33.2 million businesses in the US, then about 16.9 million small business owners will soon be looking for buyers. As businesses and assets change hands, the US is poised to experience the most significant transfer of wealth in its history, permanently reshaping the future of the entrepreneurial landscape. Those in the merger and acquisition (M&A) sector refer to this generational shift of businesses as the “Silver Tsunami.”

But, as Snider asserts, 70% to 80% of businesses will fail to sell. And, of those that do sell, many will receive a lower multiple or sale price than they would have had they started exit planning earlier and more effectively.

Family businesses on the precipice of being passed down aren’t protected from this vulnerability either. Historical data from the SBA shows that only 30% of family-owned businesses in the U.S. survive into the second generation, 12% into the third, and 3% into the fourth and beyond (SBA).

Not only do business owners need to harvest the value from their companies, but culturally, the U.S. needs it too. Small businesses are community assets, they’re points of pride, signs of success, and beacons of hope. But all too often, owners put off exit planning to the point where they’re desperate for quick deals—and private equity offers rarely protect the legacy of a life’s work.

The State of Owner Readiness study from the Exit Planning Institute (EPI) made it clear why owner outcomes are so poor:

• 18% had completed a formal valuation within the previous two years

• 40% had no plans in place to cover illness, death, or a forced exit

• 49% admitted that they had done no planning at all

• 56% felt they had a good idea of what their business was worth

• 66% of business owners said they were not familiar with their exit options

• 78% indicated that they had no formal transition team

• 83% had no written transition plan

• 86% had not undertaken a strategic review or a value enhancement project

• 93% had no formal plan for their life after exiting their businesses

Yet, we business owners were asked, “Do you agree that having a transition strategy is important both for your future and for the future of your business?” 99% of business owners responded that they agreed with this statement. So why isn’t exit planning happening?

There are many reasons why small business owners avoid exit planning, but a few consistently rise to the top:

• They didn’t start with the end in mind

• They are overwhelmed by daily operations

• They don’t know how to begin

• They feel they don’t have enough time

• They’re emotionally attached to the business

• They feel financially trapped by the income it provides

When you distill these reasons down, you realize that small business owners often view exit planning like a project rather than a way of operating. Put simply: Exit planning is good business strategy. It’s a system that helps your clients manage business, personal, and financial value—all at once, making the timing of their exit irrelevant. It’s about what they can do right now to grow the value of their business.

When owners focus on building a business that drives value and enables them to hit—and surpass—their personal and financial objectives, they’ll have their pick of options when it finally comes time to exit.

At ELLA, we believe trusted advisors are the key to changing the status quo. To preserve the economic and cultural benefits of Main Street businesses, we built a tool that streamlines the exit process for all parties. With ELLA’s fact-finding dashboard, you can better facilitate exit team collaboration, leverage sensemaking tools for deeper insights, and turn data into actionable steps that help maximize value and minimize risk. ELLA helps advisors communicate with small business owners that the exit isn’t an ending. It’s an opportunity for perpetuation—of a business, a legacy, and a life’s work.

If you’re interested in learning more about how ELLA can speed up the Discover Gate for you and your clients, reach out today to book a demo.