Transferring Management Duties

As owners work toward their exits, they need to transition a variety of management duties to the new owner. To do so, it is important to create, at least five years in advance of your target date, a time-based plan that determines who will take over which tasks within a set timetable.

Some owners are able to accomplish this fairly quickly because they’ve already delegated management responsibility. We can help you figure out where you are on the management transition continuum.

Minimizing A Lender’s Risk When Financing A Sale

Whether you plan to sell your company to a third party or transfer it to key employees, co-owners or children, your banker can provide the cash necessary for a smooth transition.

In all scenarios, banks strive to minimize their risk. One way to do so is for buyers to take advantage of the Small Business Administration’s (SBA’s) loan guaranty programs that can protect the lender bank against loss in case of default.

The SBA’s 7A loan guaranty program is designed to facilitate the sale of a business interest by guaranteeing the loan repayment.

Determining How Much Wealth is Needed After the Business Exit

When creating an effective, tax-efficient wealth transfer strategy, you should focus on three basic issues that should be resolved for successful wealth preservation planning to occur. These issues include:

Fixing your financial objectives before considering a wealth transfer.

  1. Determining the amount of wealth to be transferred and identifying how much is too much.
  2. Designing a wealth transfer strategy that keeps the IRS from becoming the largest beneficiary of your hard-earned cash.

Avoiding Disasters in Insider Transfers

Steve Smith was no different than millions of other baby-boomer business owners in that the thought of leaving his business was never far from his mind, no matter how far away his exit might have been. He daydreamed about transferring the business to his oldest daughter and perhaps to a member of his management team, yet he couldn’t gauge their passion for owning a business and hadn’t tested their management skills.