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Pre-Sale Due Diligence
[et_pb_section bb_built=”1″ next_background_color=”#000000″][et_pb_row][et_pb_column type=”4_4″][et_pb_text] This article is for those who have ever given thought to selling their companies to a third party. In order for you to attract a buyer to your company, you must engage in the pre-sale due diligence process well before your anticipated departure date. This process has been compared, not unfavorably,…
Read MoreElements of a Plan to Sell to Insiders
Today we discuss the essential elements of a plan owners use to transfer a business to insiders (with the help of skilled advisors) that keeps the owner in control until he or she is paid the sale price. If you suspect that the children, key employees or co-owners you would pick to succeed you do…
Read MoreDoes Value-Building Equal Exit Planning?
When we talk about building value in the context of Exit Planning, we ask the following questions:
1. What is the company’s current value?
2. What value must the company achieve to enable its owner to reach his or her lifetime income and other Exit Objectives?
3. Which tactics can owners employ to close any gaps between today’s business value and the value they need upon exiting?
4. How can owners transfer business value most efficiently (in terms of taxes and otherwise)?
Why owners want to sell to their employees
Many advisors to business owners think a sale to key employees is a great option for companies that don’t reach the “sale to third party” threshold. Typically, they define this threshold as the point at which a business can be sold for (largely) cash. Depending on a variety of factors, this threshold is usually around…
Read MoreBuilding Value Is the Win-Win-Win of Exit Planning
Ultimately your success is not determined by how well you ran your business, but by how well the business runs without you. If you cannot be replaced, your business can not be sold to an insider or an outside third party. We Want to fix that!
Read MoreThe Road to Irrelevance: Transferring Your Responsibilities to Management
Longtime readers of this newsletter know that one of our favorite instructions to business owners is: Make Yourself Irrelevant! Newer readers may find that recommendation off-putting so let us explain. Unless your business can run without you, your business has little value to a prospective buyer. If making yourself irrelevant is the goal, how do you…
Read MoreThink About Transferring Your Company To Insiders
Business owners decide to sell their businesses to insiders (co-owners, a key employee, or group of key employees (KEG—Key Employee Group)) for many different reasons. Rightly or wrongly, some believe that their companies aren’t attractive to outside third parties. Others make this choice because they want to “reward” longtime employees with business ownership or want…
Read MoreTime to Figure Out What You Need From the Sale of Your Company
Most owners think they know how much money they will need to “retire” comfortably. Most owners are wrong. Owners start with the less-than-realistic assumption that they will receive all cash at closing for the sale of their companies.
Read MoreNavigating the Choppy Waters of a Sale to a Third Party
If there was ever a time to stay focused on your company, its the period during which you negotiate the sale of your business (often six months or more). Any drop in company productivity, sales, or income is like blood in the water and will be subject to the buyer’s scrutiny and has the potential to scuttle even the best deal.
Read MoreValue Doesn’t Grow on Trees…..or Does It?
You can’t just wait until you are ready to leave your business to find out how much “value” you need or want and how much “value” exists in your business. By then it will be too late.
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