Exit Planning

Issue 285: Exits Are Inevitable. Failure is Not. Plan A Successful Exit

In a prior issue of this newsletter, we listed several compelling reasons to create a plan to make this happen. Designing a comprehensive Exit Plan—based on your exit objectives and flexible enough to adapt to changing economic, business and personal circumstances—can be the difference between liquidating your company and selling / transferring it for millions of dollars.

Issue 283: Business Owners Who Take Time to Plan Exits Increase Chances of Success

Given that it takes time not only to create the plan, but also to implement and to achieve measurable results, is it not time for you to start planning the most important financial event of your life -your exit from your company?

Issue 282: Can You Afford to Ignore Your Business Exit?

Bottom line, the process of planning is what we mean by working on, not just in, your business.  Only the planning process sets up the best opportunity to exit your business in style despite the glut of sellers, dearth of buyers, vagaries of the market and investment world, and the myriad of known and unknown influences on your business.

Issue 281: No Regrets for These Former Owners

Many owners remain “stuck” in their businesses because they can’t envision what life will be without business ownership as part of it.  Selling your business means moving into a new era of your life.  The anxiety surrounding the sale of your company may cause you to hesitate at first, however retired life may not be as boring or meaningless as you suspect.

Issue 280: Exit Planning Pays Long-Term Dividends

When we talk to business owners about the value of Exit Planning, we are talking about orchestrating a business exit that fulfills their unique financial and personal goals. Since tackling a task of this magnitude can be daunting, owners sometimes ask whether devoting the necessary time and money to this project is really worthwhile.

Issue 279: The Necessary Beast: Due Diligence

Starting the due diligence process well before the buyer requests documents gives sellers the opportunity to remove any obstacle that might prevent a buyer from traveling a straight path to closing.  Keeping the road to closing free from unnecessary impediments compress the time between the buyer's offer and the closing.

Issue 278: Using an Intermediary in a Third Party Sale

So what if you've never sold a business before? Who better to lead the sale process than the guy who knows far more about the business than anyone else?  Before you answer, pause for a moment to consider the possibility that you might just be the worst possible person to sell your company...

Issue 271: The Importance of Financial Statements in the Exit Planning Process

The value of your company is largely based on the current and past cash flow.  Your team of advisors will need to analyze your past financial statements to create a clear understanding of where your company needs strengthening, what makes your business tick, and to estimate what you can reasonably expect to receive for your company.

Issue 270: Using Exit Planning Advisors

Your Advisor Team is very important when exiting your business.  You should have a variety of experienced professionals asking you the necessary questions to determine clear objectives.  Let's discuss how you can get started using your Advisor Team efficiently.

Issue 246: First Things First: Prioritize Your Objectives

As you near the time when you will leave behind the daily worries and stresses of business ownership, have you defined your successful exit? Do you know where “there” is, much less how to get there? Unless you set and prioritize your exit goals or objectives, you may have too many, or they might conflict, but in either case you may not make much headway.

Issue 46: What Your Advisors Should Know

At some point, you may want to transition out of (exit) your business.  You know you can't do it alone and suspect that you need the assistance of others.  Who, exactly, are those "others?"  What professional advisors have the qualities, experience and training necessary to help you make that transition successfully?

Issue 45: Exit Planning Myths

Planning for an owner's exit is, at it's core, a multi-disciplinary approach.  It is simply too difficult for one professional to do it all.   Ask your current advisors about their experience, read and learn, and ask other professionals for suggestions.

Issue 44: 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.

Issue 43: Sold! To The Highest Bidder

In today's recovering Merger and Acquisition marketplace, an all-cash buyer is as rare as a balanced federal budget.  Those buyers who do arrive at the closing table with cash in hand may not be over-burdened with huge bagfuls.

Issue 42: Tainting The Marketplace

So, you've decided to become a seller.  You have determined that even though market conditions are not absolutely ideal, your company is salable.  This scenario is reminiscent of a little boy who cried "Wolf!"  

Issue 41: Going It Alone

So what if you've never sold a business before?  You know what you want from the sale of yours. You know your business better than anyone else.  Who better to lead the charge than you?  Don't mislead yourself.  You may be the worst possible person to sell your company.

Issue 40: Your Banker: The Forgotten Advisor Team Member

Fellow business owners, let's be honest.  We fear our bankers.  On a daily basis, we may give them little thought.  When time comes to tell them we're planning to exit our business, or when we need money, however, we may experience feelings ranging from mild anxiety to outright panic. 

Issue 39: Systems: Value Drivers? Yes! Between The Owner's Ears? No!

Systems create value.  value is a key element in the successful exit from your business.  Experienced business consultants can help you design effective systems.  There are four simple characteristics that will ensure your system will be successful.

Issue 38: How Much Is All This Exit Planning Going To Cost

A typical Advisor Team usually consists of: an accountant, lawyer, financial advisor or insurance professional, and oftentimes, a business consultant.  But how much will this extensive team cost?  A well trained Advisor Team should make you money, not cost you money.

Issue 37: My Lawyer Told Me Not To Do It!

There are three major questions that should be asked of you before any person on your team of advisors can give you the answers you need to plan your Exit Strategy.  Without these key questions, there is no way your team of advisors can determine which direction you want to go with your exit!

Issue 36: Family Succession Planning Via Sale To Third Party

Are your exit strategies clashing?  Let's take a closer look at how to minimize risk while attaining your departure objectives and keeping your experienced management team with the company after you sell.

Issue 35: Has Your Child Earned Ownership Interest In Your Business?

There are clear determinations you can make to form the basis for what is "fair" with respect to both the business-active child and other children.  These determinations and the independent, non-emotionally-charged advice from your team of advisors can help you make educated decisions.

Issue 34: Selling To Insiders

If you sell to an insider, you'll find that the future cash flow potential of your business determines and limits what you can expect to receive.  Let's look at how cash flow determines the sale price to insiders.

Issue 33: Cash Is King

It may not be uncommon for a business owner to hear that one of his friends sold her business for a "six times multiple."  That owner's first question to his own advisors typically is, "Can I get the same type of multiple if I sell my business?"  The answer is, "yes and no."  To understand these answers, we need to understand exactly what is being multiplied.

Issue 32: Estate Planning or Exit Planning?

It is worth repeating the same analysis given to lifetime transfers to a transfer occurring at your death.  Since both lifetime Exit Planning and Exit Planning at death are based on the same premises, it can be relatively easy to develop a consistent outcome.

Issue 31: Winning The Beauty Contest

You've cultivated your business to perfection over many years of hard work, but now that it's time to sell, how do you choose a buyer?  A savvy buyer understand's your exit goals and will find a creative way to meet you there, or at least find a middle ground.

Issue 30: Due Diligence

The due diligence process requires extraordinary amounts of time and attention so it is best initiated as soon as you, the owner, decide to sell the company.  Your team of advisors should help you gather all of the significant documents and remove obstacles in the path towards closing.  Do your due diligence early and thoroughly to help avoid unnecessary detours on the road to closing and to protect yourself afterwards.

Issue 29: First Things First: Prioritize Your Objectives

As you near the time when you will leave behind the daily worries and stresses of business ownership, have you defined your successful exit?  Since many owners haven't defined where "there" is, they may not know how to get there.  Organizing your ambitions clearly will ease your path towards your own Exit Strategy. 

Issue 28: The Annual Planning Meeting

Readers of this newsletter should understand that Exit Planning is an on-going process.  It begins with establishing your objectives and a valuation of your company and ends with your successful exit.  Along the way, you and your Team of Advisors look at preserving the value of your company, protecting that value from creditors, and increasing overall value.

Issue 27: Eight Ways To Exit Your Company

Here we discuss some potential Exit Strategies.  With the help of advisors you can establish thoughtful objectives to help make your goal a reality.  Use our 3 step process to help you and your team of advisors to strategize your exit route.

Issue 26: Characteristics of a Well-Prepared Buyer

Now that you are a well prepared seller, what does a well prepared buyer look like, and why should you care?  You need to be able to recognize a serious buyer while exiting your business.  Does this buyer have clear objectives?  Do they have an experienced team of advisors?  These are all things to consider when selling your company.

Issue 25: Exit Your Business Without Leaving It

Exit Planning can help you to orchestrate a successful, permanent exit; however Intermediate Exit Planning can help you to forge a path towards and exit without giving up ownership.  

Issue 24: Use Multiple Entities to Save Tax Dollars

Not only does the use of multiple entities protect your assets, it also distributes your taxable income.  Here we see how second-generation business owner manages to have his business pay for his children's education on a tax-deductible basis.

Issue 23: Protect Your Nest Egg

Protecting your assets requires more than an Limited Liability Company (LLC), which many business owners do not realize.  By spreading your assets over multiple entities you can better control liability and risk.

Issue 22: Put All of Your Eggs in One Basket?

Using multiple entities can solve many problems that business owners face.  For a growing business, the use of multiple entities is good tax-planning, good continuity planning, and good asset protection planning.

Issue 21: Have Your Employees Cash You Out of Your Business

Selling out can be an easy and successful Exit Strategy with planning, timing, and your Key Employee Group.  If this Exit Strategy is right for your business, your team of advisors can help you create the right incentive plan and determine which employees are suitable for ownership.

Issue 20: Getting Started In The Exit Planning Process

Understand that there is a proven Exit Planning process.  There are a few preparation steps that you must take before you dive into exiting your business.  You must begin The Exit Planning Process by first determining your objectives.

Issue 19: Vesting: Handcuffing Key Employees to Your Company

Sometimes referred to as 'golden handcuffs', these strategies will financially link your management team to your business, even after you have left it.  The success of your bonus plan can only benefit you during your exit.

Issue 18: Characteristics of Successful Employee Bonus Plans

While planning your Exit Strategy, it is important to realize that without your experienced management team you do not have a business to sell.  Let's take a look at what incentive plans will sufficiently motivated your management to reach performance standards.

Issue 17: Bonus Incentive Plans for Key Employees

You want your company to be more profitable and you want to keep key employees tied to your business while you plan your Exit Strategy.  Both your goals and your employees goals can be attained with the use of incentives.

Issue 16: Finding The Right Advisor

Issue 15: Transfer Your Business And Avoid The Deal Killer: Taxes

While operating as a C corporation during your growth years allows you to take advantage of lower tax rates, this can drastically change when you begin your exit planning strategy.  Let's take a closer look at how your entity choice will affect the taxes that you may face after the sale of your company, and how to convert it if necessary.  

Issue 14: Protecting Assets

Exit Planning assumes that good business are not only profitable and well managed, but that they are protected from liability risks.  However, many business owners expose their assets without even realizing it.  Here we discuss four steps to keeping your assets protected while selling your business.

Issue 13: Former Business Owners Express No Regrets About Selling Out

Selling your business means moving into a new era of your life.  The anxiety surrounding the sale of your company may cause you to hesitate at first, however retired life may not be as boring or meaningless as you suspect.