We specialize in helping owners and founders of privately held companies identify, build and implement the best transition strategy for their business. Since our founding, we have transitioned close to 1,000 private companies nationwide. The transition of your business can have a significant impact on your lifestyle, family, employees and community. Our experience and process enables you to determine the best course of action to meet your unique business and financial objectives. We have decades of experience helping business owners navigate the following types of transitions:
INTERNAL SALE
An external sale is the obvious selection if your main objective is to maximize value. However, if the non-financial aspects of your business such as legacy, employees or community take precedence over the maximum sale price, you may consider an internal sale and/or gift to family members or a sale to one or more key employees. The risks associated with an internal sale can be complex to navigate, but given enough time, a successful plan can be achieved. Here are a few key decisions to consider:
Key Decisions:
- How much do you need from the transaction?
- What is a fair sale price?
- How much time is needed to develop and implement a strategy?
- How will the sale be structured?
- How will the transaction be financed?
- What is the tax impact of the transaction?
- What impact does the transaction have on available cash flow to the business and the new owner(s)?
- Is the purchaser or purchasing group equipped to run the business when you are gone?
- Is a Board of Directors or Advisory Group necessary to oversee the company? What is your role on the board?
RETENTION FOR FAMILY MEMBERS
In many cases, and often the most complex transition is a next generation successor. This type of transition impacts not only the business, current owner, and its employees, but also the directly and indirectly involved members of the family. We believe that to achieve a successful transition within the family, all parties need to benefit. The need to balance the objectives of the owner(s) with the needs of the business and other stakeholders is critical. Considering the unique challenges and opportunities, from an operational perspective, enables the ownership group to create the most beneficial course of action for everyone. Here are a few critical decisions to ensure a successful result:
Key Decisions:
- What is my business worth?
- Should I sell a minority or majority interest to family?
- How much will I need to realize from the sale to ensure my financial security?
- How much is fair?
- How will the sale be structured?
- What is the most tax efficient way to transfer stock?
- How much time will I need to allow to ensure the transition is a success?
- How will the employees handle the transition of ownership?
- How much time is needed to develop and implement a strategy?
- Is the purchaser or purchasing group equipped to run the business when I am gone?
- How do I manage fair but not necessarily equal between compensation and ownership?
- Is a Board of Directors or Advisory Group necessary to oversee the company?