Succession and Exit Planning
Understanding all of the options available to you, as well as the pros and cons of each option, will help you effectively plan for the exit you want.
- Intergenerational Transfer:
Transfer of business to heirs – usually children. 50% of business owners anticipate using this option, while only 30% actually do so.
- 3rd Party Sale:
Selling the business to a strategic buyer, financial buyer, or private equity group through a negotiated sale, controlled auction or non-solicited offer. Usually the pathway to the highest sales value.
- Employee Buyout:
Selling all or a portion of the business to the management team, key employees or all employees. Usually using business assets to finance a large portion of the purchase, or offering a Employee Stock Option Plan (ESOP).
- Partner Buyout:
Normally defined by a Buy-Sell Agreement.
Using outside sources of funds to fuel company growth. Brings in a lender or equity investor to act as a partner in the business in a minority or majority position.
- Orderly Liquidation:
Shutting down the business through a quick and simple sale of real assets. This option is used in the value of the assets are greater than the value of the company, or time is of the essence.
There are numerous ways to exit your business. Not every option produces the same outcome. The most common transfers are to children, a third party or internal to partners or employees. Understanding all of the options available to you, as well as the pros and cons of each option, will help you effectively plan for the exit you want.
Exit Plan Advisory Team
A successful business exit requires the services of several key advisors, with legal, accounting and financial planning expertise being critical in all transactions.
With so many different moving parts, it is helpful to have a team leader that can coordinate and communicate with team members to ensure that your goals and objectives are top-of-mind.
Business + Personal + Marketplace
These three areas need to be in alignment in any successful transition. Preparing the company and planning your personal finances are things owners can control but market timing is not. Being market ready allows for owners to decide when and how to sell.
Our Comprehensive Approach
Our services enable owners to exit on their terms
What's my business worth
"Statistics show that only 18% of all business owners have had a formal valuation of their firm. A business valuation is not just about determining value. It is also a first step to determining strategies that might help increase overall business value."
When to start planning
"83% of business owners have no formal transition plan in place for their business. Over 50% of business transfers are the result of disruptive events: Death, Divorce, Disability, Disagreements, etc. Since we don't know what life is going to throw our way, every business should have an Exit Plan from the start. If you don't have one, now is the best time to get started."
Funding your exit
"Most business owners would like to sell their business to someone who pays the full value of the business in cash right up front – no strings attached. In reality, this is very rare. Knowing the different funding options and strategies common to business purchase contracts will help you maximize your net proceeds. Knox Capital Group provides ongoing educational opportunities to learn the basics of funding a business exit."
What would happen to your business if you or your partners died, became disabled, or had another life altering event that would draw them away from the business? You could find yourself in a partnership not of your choosing, or your family could be devastated financially. Luckily, this situation is easily remedied with a properly designed and funded Buy-Sell agreement between partners.
What's your legacy?
Most business owners want their business to succeed after they transfer ownership. The legacy of the business, as well as the wellbeing of employees, depends on a successful transfer. Our knowledgeable advisors can guide you through an exit plan process that will enhance the possibilities of business success after your departure.
A successful business exit requires the services of several key advisors, with legal, accounting and financial planning expertise being critical in all transactions. Additional expertise might be necessary depending on individual circumstances. With so many different moving parts, it is helpful to have a team leader that can coordinate and communicate with team members to ensure that your goals and objectives are top-of-mind.