CEPA CERTIFIED EXIT PLANNING
ADVISOR/CEPA - EXIT OPTIONS ANALYSIS
QUESTIONS AND ANSWERS
What survey indicated that 99% of business owners at least in some way agreed
that "having a transition strategy is important for my future and the future of my
business?" - ANSWER-State of Owner Readiness
It's important to not just tell an owner the right answer, but to ask them the right
question. What are examples of the "right question" to ask a business owner client?
- ANSWER-a. What is the strength of your intangible capital?
b. What is your biggest pain point and biggest desire?
c. What deal structure are you looking for when selling?
Complete the following quote: "Luck is ___ meeting opportunity." - ANSWER-
Preparation
Four intangible capitals (The 4Cs) include Human, Structural, Social, and
Customer (True/False) - ANSWER-True
Four intangible capitals (The 4Cs) include _ _ _ _ _, Structural, Social, and
Customer - ANSWER-Human
Four intangible capitals (The 4Cs) include Human, _ _ _ _ _ _ _ _ _ _, Social, and
Customer - ANSWER-Structural
Four intangible capitals (The 4Cs) include Human, Structural, _ _ _ _ _ _, and
Customer - ANSWER-Social
Four intangible capitals (The 4Cs) include Human, Structural, Social, and _ _ _ _ _
_ _ _ - ANSWER-Customer
Business is personal for most owners (T/F) - ANSWER-True
,Exit planning is a strategic business tool used to focus the company on maximizing
business value (T/F) - ANSWER-True
The Baby Boomer generation doesn't need to be thinking about exit planning (T/F)
- ANSWER-True
The Value Acceleration Methodology provides a structure to the exit planning
process (T/F) - ANSWER-True
A successful exit strategy balances the "____ Legs of the Stool." - ANSWER-
Three
What is one of the main causes of "sellers' cold feet" during the sale of a business?
- ANSWER-Lack of Personal Planning
What is the first stage in the "Five Stages of Value Maturity?" - ANSWER-Identify
What is the second stage in the "Five Stages of Value Maturity?" - ANSWER-
Protect
What is the third stage in the "Five Stages of Value Maturity?" - ANSWER-Build
What is the fourth stage in the "Five Stages of Value Maturity?" - ANSWER-
Harvest
What is the fifth/final stage in the "Five Stages of Value Maturity?" - ANSWER-
Manage
When ranking a business's intangible capitals, what is the main purpose of using
the common-sense scoring of 1 - 6 - ANSWER-Forced to not chose average
A key difference between lifestyle businesses and value creator businesses is that
value creator businesses usually generate better income (T/F) - ANSWER-True
First gate in the Value Acceleration Methodology? - ANSWER-Discover
Second gate in the Value Acceleration Methodology? - ANSWER-Prepare
,Third gate in the Value Acceleration Methodology? - ANSWER-Decide
If the potential value for a business is 16 million, and it's currently valued at 9
million, what is the value gap of the business? - ANSWER-$7 million
The typical business owner has ____% of their net worth tied up within their
business. - ANSWER-80%
What are benefit of prioritizing wealth management for a business owner? -
ANSWER-a. Tax efficiency
b. Insurances in place (Risk Management)
c. Structured cash flow
Life insurance, health insurance, and product liability insurance all fall under
which section of the financial planning process? - ANSWER-Risk Management
The components of integrated wealth management for individuals are: -
ANSWER-Retirement planning, risk management, estate planning, portfolio
management
A business owner only needs one advisor to complete their exit planning (T/F) -
ANSWER-False
Typical estate planning conversations discuss how to preserve a decedent spouse's
"coupon." (T/F) - ANSWER-True
A _____ gift is one in which the person who received the gift has the unrestricted
right to the immediate possession and use of it. - ANSWER-Present Interest Gift
All states have an estate tax (T/F) - ANSWER-False
Not all states have an estate tax (T/F) - ANSWER-True
A descendant's unused federal estate tax exemption may be used by the surviving
spouse (T/F) - ANSWER-True
, A descendant's unused federal estate tax exemption may not be used by the
surviving spouse (T/F) - ANSWER-False
The most efficient use of the federal estate/gift exemption is during life (T/F) -
ANSWER-True
A gift received by a person is not taxable income - ANSWER-True
The main goal of minimizing wealth tax is to: - ANSWER-Maximize the client's
portion of earnings and minimize the IRS's portion
What does the acronym "NING" stand for when looking at income tax planning
options? - ANSWER-Nevada Incomplete Non-Grantor Trust
Client cannot be a beneficiary of a intentionally defective grantor trust (IDGT)
(T/F) (if T - disadvantage/advantage) - ANSWER-True / Disadvantage
IDGT continues for multiple generations without being subject to federal estate
(T/F) - ANSWER-True
Gifts to an IDGT do not trigger capital gains (T/F) - ANSWER-True
A strategy which makes assets difficult or impossible to reach is called: -
ANSWER-Asset protection
What are the benefits for the business owner and family for integrating charitable
contributions? - ANSWER-a. Wanting to transfer values and purpose, not just
assets
b. Creating inter-generational common ground to collaborate, make joint decisions,
gain confidence, develop/fulfill potential
c. Developing an emotional and functional bridge between wealth, purpose, and
society
Of the 250,000 US companies with $5M to $100M in revenue set to transition by
2030, how many will actually sell for desired value? - ANSWER-14,000
ADVISOR/CEPA - EXIT OPTIONS ANALYSIS
QUESTIONS AND ANSWERS
What survey indicated that 99% of business owners at least in some way agreed
that "having a transition strategy is important for my future and the future of my
business?" - ANSWER-State of Owner Readiness
It's important to not just tell an owner the right answer, but to ask them the right
question. What are examples of the "right question" to ask a business owner client?
- ANSWER-a. What is the strength of your intangible capital?
b. What is your biggest pain point and biggest desire?
c. What deal structure are you looking for when selling?
Complete the following quote: "Luck is ___ meeting opportunity." - ANSWER-
Preparation
Four intangible capitals (The 4Cs) include Human, Structural, Social, and
Customer (True/False) - ANSWER-True
Four intangible capitals (The 4Cs) include _ _ _ _ _, Structural, Social, and
Customer - ANSWER-Human
Four intangible capitals (The 4Cs) include Human, _ _ _ _ _ _ _ _ _ _, Social, and
Customer - ANSWER-Structural
Four intangible capitals (The 4Cs) include Human, Structural, _ _ _ _ _ _, and
Customer - ANSWER-Social
Four intangible capitals (The 4Cs) include Human, Structural, Social, and _ _ _ _ _
_ _ _ - ANSWER-Customer
Business is personal for most owners (T/F) - ANSWER-True
,Exit planning is a strategic business tool used to focus the company on maximizing
business value (T/F) - ANSWER-True
The Baby Boomer generation doesn't need to be thinking about exit planning (T/F)
- ANSWER-True
The Value Acceleration Methodology provides a structure to the exit planning
process (T/F) - ANSWER-True
A successful exit strategy balances the "____ Legs of the Stool." - ANSWER-
Three
What is one of the main causes of "sellers' cold feet" during the sale of a business?
- ANSWER-Lack of Personal Planning
What is the first stage in the "Five Stages of Value Maturity?" - ANSWER-Identify
What is the second stage in the "Five Stages of Value Maturity?" - ANSWER-
Protect
What is the third stage in the "Five Stages of Value Maturity?" - ANSWER-Build
What is the fourth stage in the "Five Stages of Value Maturity?" - ANSWER-
Harvest
What is the fifth/final stage in the "Five Stages of Value Maturity?" - ANSWER-
Manage
When ranking a business's intangible capitals, what is the main purpose of using
the common-sense scoring of 1 - 6 - ANSWER-Forced to not chose average
A key difference between lifestyle businesses and value creator businesses is that
value creator businesses usually generate better income (T/F) - ANSWER-True
First gate in the Value Acceleration Methodology? - ANSWER-Discover
Second gate in the Value Acceleration Methodology? - ANSWER-Prepare
,Third gate in the Value Acceleration Methodology? - ANSWER-Decide
If the potential value for a business is 16 million, and it's currently valued at 9
million, what is the value gap of the business? - ANSWER-$7 million
The typical business owner has ____% of their net worth tied up within their
business. - ANSWER-80%
What are benefit of prioritizing wealth management for a business owner? -
ANSWER-a. Tax efficiency
b. Insurances in place (Risk Management)
c. Structured cash flow
Life insurance, health insurance, and product liability insurance all fall under
which section of the financial planning process? - ANSWER-Risk Management
The components of integrated wealth management for individuals are: -
ANSWER-Retirement planning, risk management, estate planning, portfolio
management
A business owner only needs one advisor to complete their exit planning (T/F) -
ANSWER-False
Typical estate planning conversations discuss how to preserve a decedent spouse's
"coupon." (T/F) - ANSWER-True
A _____ gift is one in which the person who received the gift has the unrestricted
right to the immediate possession and use of it. - ANSWER-Present Interest Gift
All states have an estate tax (T/F) - ANSWER-False
Not all states have an estate tax (T/F) - ANSWER-True
A descendant's unused federal estate tax exemption may be used by the surviving
spouse (T/F) - ANSWER-True
, A descendant's unused federal estate tax exemption may not be used by the
surviving spouse (T/F) - ANSWER-False
The most efficient use of the federal estate/gift exemption is during life (T/F) -
ANSWER-True
A gift received by a person is not taxable income - ANSWER-True
The main goal of minimizing wealth tax is to: - ANSWER-Maximize the client's
portion of earnings and minimize the IRS's portion
What does the acronym "NING" stand for when looking at income tax planning
options? - ANSWER-Nevada Incomplete Non-Grantor Trust
Client cannot be a beneficiary of a intentionally defective grantor trust (IDGT)
(T/F) (if T - disadvantage/advantage) - ANSWER-True / Disadvantage
IDGT continues for multiple generations without being subject to federal estate
(T/F) - ANSWER-True
Gifts to an IDGT do not trigger capital gains (T/F) - ANSWER-True
A strategy which makes assets difficult or impossible to reach is called: -
ANSWER-Asset protection
What are the benefits for the business owner and family for integrating charitable
contributions? - ANSWER-a. Wanting to transfer values and purpose, not just
assets
b. Creating inter-generational common ground to collaborate, make joint decisions,
gain confidence, develop/fulfill potential
c. Developing an emotional and functional bridge between wealth, purpose, and
society
Of the 250,000 US companies with $5M to $100M in revenue set to transition by
2030, how many will actually sell for desired value? - ANSWER-14,000
