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This article gives BEI Members insight on how to use the Fee Estimator Tool in various ways.
The Fee Estimator asks just 10 questions. You don’t need to ask your prospect/client these questions – simply answer to the best of your knowledge. Based on the complexity of the situation, the Fee Estimator will suggest a fee for:
- A comprehensive Exit Plan
- For one business owner
- For your coordination of the Advisor Team and overseeing the design of the Exit Plan
The Fee Estimator WILL NOT:
- Include fees for your core services or other income opportunities that may exist for you as a result of the Exit Planning Process
- Propose fees for implementation or ongoing maintenance of the Exit Plan
- Estimate the fees of other advisors on the Advisor Team
- Adjust for your geographic region
- Suggest a fee payment schedule
Converting the Fee to “Component” Planning
If you are managing a planning process for only one or two areas of Exit Planning, often referred to as “component planning”, a good rule of thumb is to charge 25% of the total suggested fee for each component. Many Advisors charge a slightly higher fee for the first component or a separate discovery fee to reflect the fact that the early stages of planning for the first component area can be a bit labor-intensive.
Planning for Multiple Owners
If you’ve been asked to propose a planning engagement for multiple owners of the same business, most Advisors will charge the entire suggested fee for the first Exit Plan for the first owner, then charge a fee for the second owner that is 20% - 25% lower. Often these two fees are combined and presented as a single planning engagement.
Fee Payment Schedules
The most common fee schedule is a “retainer model” in which you estimate the length of the Exit Planning Process (usually between 8 and 12 months) and divide your total Exit Planning fee equally across that time period. (See also: Exit Planning Pricing Strategies.)
Additional Fees
The Fee Estimator Tool does not suggest fees for supervising/managing the implementation of an Exit Plan. You may want to consider charging an Implementation Fee that is 20% - 50% of your total Exit Planning fee for this service. Many Advisors also charge an ongoing annual or semi-annual fee for updates and revisions. You may want to charge 10% to 20% of your original Exit Planning fee for this service.
How to Communicate the Exit Planning Fee
Most advisors create an Exit Planning proposal using the EPIC Engagement Letter available through the EPIC System. The most successful Advisors present their Exit Planning proposal in person so that they can explain the process in detail, answer any questions the business owner may have, and get started right away. Exit Planning is a personal, confidential and emotional decision for a business owner – so the proposal and the conversation around getting started need to reflect care and genuine concern that the business owner client is expecting.
Go to the Fee Estimator