CEPA key terms

A written roadmap that sets the owner's target exit date, desired outcome, and the business and personal steps required to leave the company on the owner's own terms.

A disciplined process that raises company value before sale by improving intangible capital, aligning personal and financial readiness, and executing a prioritized action plan over a multi-year timeline.

A life or business event such as illness, divorce, burnout, partner death, or an unsolicited offer that suddenly forces an owner to consider or accelerate an exit.

A model holding that a successful exit rests equally on business readiness, personal readiness, and financial readiness; weakness in any leg destabilizes the whole plan.

A comparison of where the business and owner stand today against the desired exit outcome, used to identify missing value, skills, resources, or time.

The degree to which an owner is emotionally, financially, and practically prepared to leave the business, including clarity about identity and purpose after the sale.

The owner's stated priorities for an exit, including timing, desired proceeds, preferred buyer type, and legacy concerns, documented before any transaction work begins.

A structured conversation in which the advisor learns the owner's goals, fears, family situation, and financial picture before recommending any exit strategy or sequencing.

A sequenced list of specific, assigned, and time-bound tasks that closes the gaps identified for the business and the owner, reviewed and updated at regular intervals.

A written agreement defining the scope, deliverables, fees, responsibilities, and limitations of an advisor's work with an exit planning client and the client's other advisors.

An opinion of what a company is worth at a given date, based on its earnings, assets, market comparisons, and assessed risk profile.

The price at which property would change hands between a willing buyer and a willing seller, neither under compulsion to act and both reasonably informed about relevant facts.

A valuation shorthand in which a company's earnings before interest, taxes, depreciation, and amortization are multiplied by an industry-derived factor to estimate enterprise value.

A reduction in value applied to ownership interests that cannot be quickly sold in a public market, reflecting the cost and time required to find a buyer.

A business characteristic such as recurring revenue, diversified customers, strong management, or documented systems that materially increases what a buyer will pay.

The share of revenue coming from a single customer or small group of customers; high concentration raises buyer risk and typically lowers the valuation multiple.

The portion of company worth that survives the owner's departure because it depends on systems, people, and customers rather than on the owner personally.

The non-physical assets of a business, including relationships, know-how, processes, brand, and culture, that increasingly drive enterprise value and buyer interest.

The skills, experience, motivation, and productivity of the people working in the business, including the owner's own capabilities and the depth of the management bench.

The documented systems, processes, data, and intellectual property that allow a business to operate consistently without depending on any single individual.

The strength and loyalty of a company's customer relationships, including recurring revenue, retention rates, referral flow, and breadth of the customer base.

A condition in which revenue, knowledge, or relationships are concentrated in one or two individuals, creating risk that reduces the company's value to a buyer.

A documented set of arrangements that keeps the company operating and protects value if the owner or another critical person dies or becomes disabled.

The condition of an owner's personal balance sheet, income needs, and available liquidity such that exiting the business will not jeopardize the owner's desired lifestyle.

The difference between the after-tax proceeds an owner expects from a sale and the amount needed to fund the owner's desired post-exit lifestyle.

A personal plan describing how the owner will spend time, find purpose, and maintain relationships after exit, reducing the risk of post-sale regret.

A transaction in which the owner sells the business or its assets to an unrelated outside buyer, typically for cash and often at the highest available price.

A sale of the business to insiders such as family members, managers, or employees, often structured over time and frequently at a lower price than an outside sale.

An employee stock ownership plan, a qualified retirement trust that buys company shares, letting owners sell gradually while employees gain ownership and the company gains tax benefits.

A transaction in which an owner sells a majority or minority stake to an investor while retaining equity and often a management role, providing partial liquidity and a second bite.

A typically non-binding document summarizing the proposed price, structure, and key terms of a transaction, setting the framework for due diligence and definitive agreements.

The buyer's structured investigation of a target's financial, legal, operational, and customer records to confirm value and surface risks before closing.

Two transaction forms: an asset sale transfers selected company assets and liabilities, while a stock sale transfers ownership of the entity itself, producing different tax outcomes for each side.

A sale in which the buyer pays the price over multiple years, letting the seller spread gain recognition across tax years and providing income after exit.

An estate planning trust to which an owner transfers business interests while retaining an annuity; appreciation above the IRS hurdle rate passes to heirs with reduced gift tax.

The coordinated group of professionals, typically an exit planner, CPA, attorney, investment banker, wealth advisor, and insurance specialist, guiding an owner through the exit.

The professional who leads an owner through the exit planning process, coordinating the other advisors and keeping business, personal, and financial goals aligned.

A contract obliging a prospective buyer or advisor to keep sensitive company information secret and to limit its use to evaluating the proposed transaction.