VALUE DRIVERS

Did you ever wonder why one business has buyers lined up willing to pay top dollar while another sits on the market for months, or even years? What do buyers look for in a prospective business acquisition? The characteristics buyers seek must exist before the sale process even begins. It is your job as the owner to create value within your business prior to a sale.

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EMPLOYEE INCENTIVE PLANNING

Before they can sell or exit their businesses with financial security, most owners need to grow their companies’ cash flow and transferable value significantly. Without management leading the charge, this is a most difficult task in today’s economy.

Few sophisticated buyers will seriously consider acquiring a company that lacks a capable management team that remains with the business after the owner exits.

A sizeable percentage of businesses are sold to key employees—up to 40% according to a recent survey of 700 written exit plans created by advisors belonging to the BEI Network of Exit Planning Advisors.

USING SHORT-TERM KEY EMPLOYEE INCENTIVES TO INCREASE SALES PRICE

One of a business owner’s greatest challenges is to attract, motivate, and keep key employees. As owners near the finish line (the exit from their businesses), often tired and distracted by the end of the race, they often assume that it is no longer desirable to keep and motivate key employees. Keeping key employees is not only desirable, however, it is necessary if the business is to be sold—and sold at the highest possible price.

LEAVE YOUR BUSINESS? IT’S INEVITABLE

Owners begin thinking about the Exit Planning process when two streams of thought begin to converge. The first stream is a feeling that you want to do something besides go to work everyday: either you would like to be someplace else—doing something else—or you simply no longer get the same kick out of doing what you are doing.

The second stream is the general awareness that you:

  • Are close to financial independence,

BUSINESS CONTINUITY

Successful owners are usually optimistic people, somewhat averse to dwelling on the more unpleasant aspects of business. Contemplating one’s demise certainly qualifies as an unpleasant aspect. Consequently, advisors to owners tend to use a lot of buzz words when we talk about business continuity. We ask, “What happens if the owner ‘passes on’ or ‘leaves the scene?’” We talk about the consequences of an owner’s death upon the business in theoretical, third party terms:

“Should an owner die …” Unfortunately,

EXIT ROUTES FOR BUSINESS OWNERS

When business owners start to think about exiting their companies, the number of possible exit routes can seem limitless, but in fact, there are only eight:

  1. Transfer the company to family member(s)
  2. Sell the business to one or more key employees
  3. Sell to employees using an Employee Stock Ownership Plan (ESOP)
  4. Sell to one or more co-owners
  5. Sell to an outside third party
  6. Engage in an Initial Public Offering (IPO)
  7. Retain ownership but become a passive owner
  8. Liquidate

To read more please check out the details in this PDF.

A MODEL FOR SUCCESSFUL FAMILY-BUSINESSTRANSFERS

What could be easier than transferring a family business to its natural successor, the owners’ heirs or offspring? If some of your first guesses were peace in the Middle East, ending bureaucratic inefficiency, or the Chicago Cubs winning the next World Series, you have probably witnessed your share of family business transfer disasters.

To read more please click on the following PDF

TRANSFERRING YOUR COMPANY TO KEY EMPLOYEES

Owners wishing to sell their businesses to management (key employees) face one unpleasant fact: their employees have no money. Nor can they borrow any—at least not in sufficient quantity to cash out the owner. As a result, each transfer method described in this White Paper uses either a long-term installment buyout of the owner or uses someone else’s money to affect the buyout.

To read more please check out the details in this PDF

TRANSFERRING WEALTH TO CHILDREN

In their desire to pass wealth to children, business owners are no different than nonbusiness- owning parents. Business owners are different, however, in the tools they can use to transfer wealth. Whether you own a business or not, the fundamental questions are the same:

  1. How much wealth do you want to keep?
  2. How much wealth do you want the kids to have? How much is too much?
  3. What tools minimize the Estate and Gift Tax consequences of transferring wealth?

ESOP OPPORTUNITIES

An Employee Stock Ownership Plan (ESOP) is a tool business owners use to achieve many common Exit Objectives:

  1. Provide partial or full liquidity for existing shareholders;
  2. Leave the business gradually;
  3. Provide employees with a stake in the future growth of the business; and
  4. Keep the business in the community.

To read more please check out the details in this PDF.