CPAs who add value
Exit Planning
For business owners, one question inevitably emerges: What do you want to do with your business? The question leads to a thicket of interconnected financial, tax, legal, management and emotional issues. Answers are not made easier by the array of alternatives, the tradeoffs and the combinations of people who might be affected or who might find themselves in disagreement about the most satisfying deal. Nevertheless, with careful planning, you can transition out of your business on your terms and on your schedule. It takes the will to set your goals, to confer with a team of advisors and to align the best ideas as your road map. Time can be your ally, so it is never too soon to begin planning the most critically important financial event or your life.
You might not know your precise exit goals. That’s okay. You might believe the process is confusing. That’s understandable. Although you have many unique objectives, the beginning of your exit plan is based on the following universal questions.
- When will you exit? Some have specific goals or thresholds in mind to make them emotionally ready and financially capable, while others simply want to work until work ceases to be fun. Still others will exit by death, leaving heirs to measure their satisfaction.
- How much are your financial needs and resources? Few have great clarity about business value and whether or not that value is sufficient to combine with other resources to sustain cash flow and meet other financial goals.
- Who is your choice of successor? Some will arrange with family or insiders and others will prefer to seek a third party purchaser.
Answer these three broad questions and you are at the end of the beginning. Along with you and your advisor team (legal, tax, investment, insurance, M&A and other advisors), we work with a logical process to clarify your various goals, priortize them, and recommend the best techniques and courses of action. The disciplines of your advisor team will help resolve these issues:
- The capital and cash required to meet your retirement and estate goals.
- The current value of your business and its cash-generating capability.
- The best ways to minimize taxes, protect and increase the value of your business.
- How to sell your business to a third party.
- How to transfer your business to family, co-owners, or key employees.
- The best ways to establish contingency plans against negative surprises.
- The alignment of estate, liquidity and personal wealth planning with business exit goals and techniques.
Alex Ivy has been credentialed by the Business Enterprise Institute as a Certified Exit Planner (CExP), which requires focused business owner representation, rigorous case-study testing and ongoing continuing education. As a valuation, transaction and tax advisor, he has been helping business owners plan and implement exits for most of his career.
We can help you make decisions about financial plans, family objectives, buy-sell agreements, business deals, and a variety of management issues. We have valuable ideas about establishing and running a successful enterprise. And we can help you plan, structure, and negotiate the purchase, sale, or leadership succession of your business. Each consulting assignment is a unique opportunity for us to bring greater clarity and advice to matters that are profoundly relevant to your wealth and the prudent management of it.
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