News
A fundamental aspect of a successful business exit is assuring that your business has enough value to allow you to exit with financial security. This, coupled with wisely invested non-business assets, gives you the best chance to pursue the Exit Path you want on the timeline you want. Obtaining a proper, professional business valuation is the first step in determining how much your company is worth, but what happens if the valuation shows that your business isn’t worth enough to allow you to exit your business with financial security? How can you increase your business’ value if everything that’s made it successful thus far isn’t enough?
The answer lies in installing Value Driver... Read More
Setting goals is critically important to owners who begin Exit Planning. Without goals, even the strongest processes fail, because they have no purpose to work toward. Your goals are what guide your process toward a successful exit, and without them, you’ll find yourself spinning your wheels in the mud of indecision.
While setting goals is the most important thing you do as you begin your business exit journey, it doesn’t mean that you have to know exactly where you’ll end up after you exit your business. Goals can and often must change to give you the best chance to exit your business on your terms. Business exits are rarely all-or-nothing propositions. Having the foresight to s... Read More
You know how things work in terms of starting and running a successful business. You’ve hired the right people, offered a useful product or service, and developed high-quality relationships with your customers and vendors. None of these things magically appeared out of thin air: You most likely followed a proven process, mixed in with your own creative problem solving, to build a successful business. The same adherence to process that applies to starting and running a successful business applies to a successful business exit.
Whether you’re looking to exit your business in 10 months, 10 years, or never, one fact governs them all: All business owners—even the hardest working, most... Read More
While there isn’t one right answer, owners who see that Exit Planning and Estate Planning share the same goals begin to appreciate how they can leverage the time and money they spend on their Exit Plans into the design of their Estate Plans. To help make the choice about where to start, we urge owners to consider two issues: (a) Estate taxes are (currently) easier to avoid than income taxes, and (b) Estate Planning techniques often involve funding from life insurance proceeds, whereas Exit Planning techniques often involve the owner’s own funds.
A successful business Exit Plan achieves three important owner goals:
Financial Security: The business sale or transfer provides... Read MoreWe’ve made it past the unofficial midpoint of summer and on every freeway in America is a steady stream of mini-vans torturing, I mean taking, families across our great nation seeking out a little slice of Americana on their summer vacations. It’s a rite of passage for so many of us. Or as one famous father said – "This is no longer a vacation. It’s a quest.”
With this backdrop, I find myself in a conversation with Founder Frank. You have probably met him. He started a small company and has now grown it to 62 employees strong. He puts in 80 hour weeks and wears it on his sleeve as a badge of honor. Today’s conversation is about the frustrations of covering vacation time for his... Read More
A focus on current businesses and strategic growth combined with increased educational opportunities and strong, dedicated private and public partnerships has created a vibrant and diverse Dubuque-area economy. The area has done a complete turnaround from the days in the 1980s when it had one of the highest unemployment rates in the nation with more than 20 percent of people out of work.
Unless owners plan to protect their wealth before they have it in hand, they cannot take advantage of all of the potential benefits of the tools in the wealth-preservation arsenal. A case study illustrates how an owner used one of those tools, a grantor retained annuity trust, to achieve financial security, provide for his family, and minimize taxes.
Full disclosure: Wealth-preservation planning can’t help any of us cheat death, but it can help business owners avoid taxes and achieve financial security.
The ideal Exit Plan (one that provides the business exit you desire) includes a strategy to help you preserve your ha... Read More
There is a strong case for creating a buy-sell agreement for co-owned businesses. If owners agree about how to appraise business value and set the terms of payment in advance of any transfer event, they can avoid the heated and often damaging negotiations that can occur when one owner leaves the company.
In this issue, we continue making our case for buy-sell agreements by outlining several other advantages of a well-drafted and recently reviewed buy-sell agreement.
Controls Transfers
A buy-sell agreement can control all transfers of business ownership to the benefit of both the owner... Read More
Contemplating one’s own demise can be challenging but is paramount to sole owners and their businesses. Consider the fictional Harry Withers, the 54-year-old owner of Withering Hikes, a chain of seven retail apparel stores for outdoor enthusiasts on the Western Slope of the Rocky Mountains. One day, Harry disappeared while scouting new hiking trails.
After several months of fruitless searching, Harry’s family opened probate proceedings only to find that Harry’s once-thriving business also had disappeared. However, Withering Hikes’s disappearance was far more typical than Harry’s. Because Harry had dreamed of selling his compan... Read More
If you co-own your business, the business-continuity agreement (or buy-sell agreement) is one of the most important documents that you will sign. If you have a buy-sell agreement that is out-of- date, not reviewed, or focuses on the wrong issues, it may be worse than having no agreement at all.
Let’s start with a hypothetical case study that illustrates the importance of drafting a buy-sell agreement that anticipates and provides for all transfer events (lifetime transfers, disability, or death).
George Acme’s son-in-law, Tom Gardner, had been with George’s company for over 20 years. Tom had g... Read More