Doing the Math — Why Solving this 4x3 Equation is the Key to a Successful Business Exit Multiplying your business's value means finding an external factor. Here's why.

The math, it is not "mathing."

Last year, the Exit Planning Institute (EPI) produced the State of Owner Readiness Report, the first national study in 10 years to measure owner readiness to exit their private businesses. It was an extensive survey, with over 1,200 business owners responding.

The good news? 95% of business owners agreed with this statement: Having a transition strategy is important for my future as well as the future of my business. That's especially good news when you consider that 57% of Baby Boomers and 38% of Generation X owners expect to exit their companies in the next few years.

Still, not everything is computing, fellow business owners.

Only 68% of us have sought outside advice regarding our transition plans. Worse yet, only 14% have established a formal transition advisory team, whose sole focus is to prepare an owner for an exit. That means that while 19 in 20 owners think it's important to strategically prepare for their business exit, only about 3 in 20 owners are living it.

And that just doesn't add up.

Related: You Need an Advisory Team More Than Ever. Here's Why—and How to Run One Effectively

"But I have all these people!"

Good entrepreneurs and business owners are constantly seeking outside advice — and help. So, it can be easy to think that you, in fact, have an external core exit advisory team.

Here's the litmus test:

• Is your team collectively working on the transition of the business? If the team is siloed — working only on their area of expertise without knowing what the other members are doing — or valuing — then they aren't working collectively or collaboratively.
• Do you have all the people you need? The core members of your team must include an attorney, an accountant, a growth advisor/coach and a financial planner. These people are factor "4" in the 4x3 model, which I'll discuss in a moment.

Remember, exit and transition planning means building value for your business so that when it comes time to exit, you can do so on your terms. Building value is a way of living, not something you do when an exit is imminent. So, even if you're not among the many owners who plan to exit in the next few years, your exit and transition planning should start now.

Related: I Specialize in Exit Planning—You Need to Make These 5 Moves Before Selling Your Business

Multiply your value: The 4x3 model

Once you have the core members of your external transition advisory team—an attorney, an accountant, a growth advisor/coach and a financial planner—it's time to get them working to multiply your value.

These advisors need to work as a team to help you set goals and integrate strategies to reach goals in three areas: business, personal and financial. Think of these areas as the Three Legs of the Stool, as we call it at the EPI. Because you can't sit on an uneven stool, equal effort needs to be devoted to each area.

1. Business: Decentralizing the owner to make the business successful post-exit, while developing and assessing four intangible capitals: human, customer, structural and social.
2. Personal: Identifying the owner's next stage of life and how a transition helps them achieve that stage. Today, younger owners plan on owning and exiting multiple businesses throughout their lives.
3. Financial: Too many owners have their wealth trapped inside their businesses. By building value — not just revenue — you can harvest that wealth to make sure you're financially successful post-exit.

Four advisors, each working on the same three legs of the stool. That's how you multiply your value.

Related: When Should Business Owners Start Developing an Exit Plan? Here's What You Need to Know.

The X factor: You can't multiply without it

While "x" can mean multiplication, it also refers to the X factor for your entire core team — that is, the quality, or secret sauce, that makes the team work successfully toward your exit.

Getting a core advisory team to work together — not just in their functional area — is more difficult than it sounds. Each may have different ideas about what is most important when it comes to identifying your major strategies to hit your business, personal and financial goals.

Every owner has an accountant and an attorney. And, often, your personal financial planner is disengaged from your business. Too often, owners view a growth advisor/coach as purely functional—someone who comes in every now and then to offer advice. But these are the core members of your team, and they all need to be aligned and speak the same language.

One of these core members needs to have a project manager role, and that person should have a Certified Exit Planning Advisor (CEPA) credential. (Even better if the entire core team is CEPA-certified!) By having a CEPA leading your external advisory team, you ensure that value acceleration—and, therefore, a successful exit on your terms — remains the primary goal of the team.

When you have all four advisors focused on accelerating the value in the three key areas (4x3), then you've solved for X — the X factor, that is, and the variable that's certain to have the most significant impact on your exit.