Exit, Succession, and Retention Planning
70%-80% of Businesses Fail to Sell
Are You Prepared?
Working with a CEPA is one of the few ways to achieve a better outcome, but many business owners come to the table far too late.
Our team provides you with creative solutions through a number of advanced strategies that can be custom-tailored to meet your specific needs.
All Businesses Benefit from Planning
- Business Exit Planning
- Business Succession Planning
- Executive Bonus Plans
- Key Person Strategies
- Non-Qualified Deferred Compensation
- Simplified Employee Pensions (SEP)
Why Businesses Fail to Sell
You're Poorly Positioned to Sell-And the Potential Profit Is Too Low
When owners decide to exit, they realize they haven't allowed themselves enough time to position their businesses for transition, minimize taxes, or maximize net proceeds. They end up with significantly lower net proceeds.
CEPAs have been known to help their clients increase profits on a sale by significantly above the original valuation.
Life Happens-And You're Unprepared
Many owners are unprepared when an unplanned event affects them and forces them into an exit that's not on their terms or timeline.
Even worse, sometimes owners receive an unsolicited offer from a buyer, but their lack of readiness prevents them from harvesting the full value of their business.
Examples of some unplanned events may include death, disability, disagreement with partners, or divorce.
You Can't Pass the Due Diligence Test
When the time comes, many owners just can't sell. Private equity and strategic buyers are seasoned and selective. You might be unable to complete a sale (or even a partial sale) of the business to a third party because the business is unable to pass the due diligence test.
Your Business Is Too Risky to Sell
Many business owners eliminate their inside options, including transitioning to a family member, employees, or partners because the business can't operate without the owner and is potentially undercapitalized, has insufficient cash flow, or has too much risk to succeed with an inside option.
The Exit Checklist
A 5-Step Personal Action Plan For A Happy (And Lucrative) Exit From Your Business
The Exit Matrix
Your final step to a happy and lucrative business exit is to pick your spot on the Exit Matrix, which corresponds with two factors:
- How important is it that you maximize the cash proceeds
of a sale? - How long are you willing to stay on post sale?
Working with a CEPA gives you a better business whether you sell or not. Who Do You Have in Your Corner?
Who do you have in your corner helping you navigate all the pitfalls of selling a business?
So many business owners try to go it alone. When they don't fail outright (and so many do), they often get significantly less money than they hoped for.
Your CEPA knows where the problem areas lie for most business owners and can help you identify your business' weaknesses, strengths, and how to make the most out of both.
Deep Education
In addition to completing a 4-hour proctored examination, CEPAs must complete a comprehensive master's level 5-day course from the Certified Exit Planning Institute. Every 3 years, CEPAs must complete a minimum of 40 hours of continuing education.
Your Business Is Too Risky to Sell
Many business owners eliminate their inside options, including transitioning to a family member, employees, or partners because the business can't operate without the owner and is potentially undercapitalized, has insufficient cash flow, or has too much risk to succeed with an inside option.
Business Exit Planning
Do you know how you are going to exit your business? You may have a dream of going public, selling to the highest bidder, or retiring and handing over your business legacy to your family.
Big dreams aside, the truth is that many small business owners have no exit strategy for their businesses in the event of their disability, retirement, or death. Given the current economy, it isn’t surprising small business owners focus their energies on business survival, future growth, and even remaining active in business after retirement. However, a business exit strategy not only means having a plan for the unexpected – including financial hardship, injury, disability and even death – it also means having a plan for the succession or transfer of ownership of your business when it comes time to hang up your hat and retire.
Develop a Succession Plan
There is no “one plan fits all” when it comes to developing a succession plan for your business. But following SCORE’s recommended five steps to succession planning (including choosing and training a successor) can help provide some practical direction and deliver the peace of mind that comes from knowing that your life’s achievement is in good hands.
All businesses can benefit from buy-sell planning.
- It provides a definite market for transferring the ownership interest.
- It specifies a set or determinable price.
- It may provide some or all of the funds necessary to execute the agreement.
- It maintains “closeness” of the business by restricting and planning who/what can receive the business interests.
- It may provide liquidity to pay estate taxes (due 9 months from date of death.)
The Process of Exiting Your Business
Whether you are selling your business, transferring ownership, seeking retirement, or facing a “forced-exit” such as bankruptcy or liquidation – planning your exit is a big undertaking that has implications on employees, your business structure, its assets, and your tax obligation. Before you embark on your exit strategy, be sure to engage your lawyer and even a business evaluation expert. That way, you will be sure that you have explored all the options available to you.
Background
- B.B.A. Financial Services, University of North Texas
- B.B.A. Insurance, University of North Texas
- Certified Exit Planning Advisor
- Certified Value Growth Advisor ( CVGA)
- International Association of Registered Financial Consultants
- Chartered Life Underwriter-American College
- Chartered Financial Consultant-American College
- National Association of Insurance and Financial Advisors
- Society of Financial Service Professionals
- Adjunct Professor, University of North Texas
Community involvements:
- United Way Denton County - Board member
- Rotary
- Exit Planning International - Chapter President
- Global Atlantic- National Advisory Board
- Value Builder - International Advisory Board
- EPI- National OEM Board
- Access Bank- Business Development Advisory Board
Related Resources
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