In summary, while there are a range of potential motivations for owners of privately-held businesses who are starting to think about retiring, all motivations and considerations are generally less important to More...]]> Please read this new article from July 2010 issue of ACG Magazine: “Generation Gap – Family-owned businesses aren’t necessarily the motivated sellers buyers had hoped.”

In summary, while there are a range of potential motivations for owners of privately-held businesses who are starting to think about retiring, all motivations and considerations are generally less important to the business owner than is getting a fair price for their life’s work.

Yes, there are tax, legacy, family and retirement issues – among others – that might motivate owners to seek a sale, these don’t pose – according to this article – a strong enough force to push an owner to sell sooner than they wish. Particularly if they are not offered what they consider a fair price.

Very good findings and information in this research report.

If you are a business owner, does this article and the comments ring true to you?

Please let us know by leaving us a comment or shooting us a confidential email at info@PacificExitTeam.com.

Thank you for reading the PET Blog.

At some point, every owner leaves his or her business – voluntarily or otherwise.  At that time, the owner will want to receive the maximum amount of money to achieve personal, financial, income, and estate planning goals.

The ownership interest in your business is likely the More...]]> 9 Essential Steps to Ensure a Successful Exit
Dan Chomko
January 11, 2010

At some point, every owner leaves his or her business – voluntarily or otherwise.  At that time, the owner will want to receive the maximum amount of money to achieve personal, financial, income, and estate planning goals.

The ownership interest in your business is likely the most significant asset you will ever own, which is why it is necessary to plan for this transfer of ownership so that you can exercise maximum control over the outcome.

Planning is essential to achieve your objectives and there are important steps an owner must take in order to be in control of this process:

1. Establish owner-oriented objectives:

a) Determine the amount of income needed annually to secure your financial independence
b) Set a departure date
c) Decide to whom the business should be transferred: family, key employees, co-owner, or outside third party

2. Determine the value of your business via an independent certified business appraisal.  Understand that this value is not the same as a sales price.

3. Form a multi-disciplinary advisory team to perform an initial assessment of your ability to exit and achieve your goals.  From the findings, initiate a plan of action to accomplish your exit goals and strategy.

4. Introduce plans and programs to motivate and keep your key employees, which will help create and preserve value in your business when you decide to sell.  Also, determine with your advisory team what can be done to increase the business “curb appeal”.

5. Seek assistance to familiarize yourself with the fundamentals of tax law to minimize your tax burden and maximize the proceeds from the transfer of ownership.

6. Examine each of the ways you are able to leave your business and determine which the best option for you is.

7. Draw up a business continuity agreement (or buy-sell agreement) which controls operational management or the transfer of ownership upon occurrence of certain events.

8. Work with your advisory team to refine the action plan that will assist you in reaching your personal, financial, and estate planning goals.  This includes where your money will go when you pass on and the Government receives no more than its fair share.

9. Review the plan and its progress annually to make sure it is on track.  This insures you deal with all issues that will impact the plan rather than stand alone situations.

Your advisory team is essential to success here; a team approach, bringing all the disciplines to bear, will insure you reach your singular goal.

Exit planning can be compared to the construction of a building, from the design phase using the services of an architect, to the grading of the land, to installation of plumbing stub-outs, to the electrical, to the laying the foundation, and so on.  The construction process More...]]> Exit Planning and the Multidisciplinary Approach
David Fearheller, CPA
December 29, 2009

Exit planning can be compared to the construction of a building, from the design phase using the services of an architect, to the grading of the land, to installation of plumbing stub-outs, to the electrical, to the laying the foundation, and so on.  The construction process utilizes the services of experts with specialized skills and normally takes a period of 2-5 years until the building is completed.

An effective exit plan requires elements of business valuation, financial analysis, tax and estate planning, insurance programs, employee benefits, and wealth management, among others.  Unfortunately, some professionals in accounting, law, or financial planning become enamored with or have a personal bias for a certain planning technique or product and push it aggressively. 

To continue with our construction analogy, imagine you want to build a custom home.  As you sit down with your architect you will normally not need to be concerned with what type of nail gun the carpenter will be using while framing the home. However, you will likely recognize the contribution made by the electrician, plumber, drywaller, painter, and other professionals. As with construction, it is easy to see that no single individual, accounting firm, law firm, or financial planning firm has the in-house expertise necessary to meet all the diverse needs related to exit planning.

Closely held and privately held businesses seldom, if ever, develop detailed exit plans.  The available research seems to point to several reasons for this, including:

• The perceived enormity and complexibility of the task itself,
• The difficulty in coming to grips with the many personal and business issues that need to be considered, and
• The expertise and extensive list of professional disciplines required.

Exit planning is not simply a transaction, but more of a process.  It is not just about buy-sell agreements, insurance funding requirements, whether to use a trust, the use of phantom stock, or many of the other tools professionals might use.  Importantly, this is a process that takes time, and should be started many years before the anticipated sale of a company.  Good exit planning can also have an enormous impact on the ultimate attractiveness of a company and the actual proceeds an owner reaps from a sale.

Because exit planning is often a once-in-a-lifetime activity, the process is not within the expertise of most business owners.  The process is usually fraught with emotional issues, often related to family matters or key employees, and thus requires a high level of professional integrity, legitimacy, and expertise within a particular field of study.

By using a multi-disciplinary team approach, with professionals experienced in exit planning, a business owner will create a blueprint or roadmap that will surface and address the critical issues, strategies and potential obstacles involved in the successful sale and exit of their business.

Business owners who run companies between $2-20 million in sales are very busy people indeed and are immersed in making their businesses successful day by day. So as a Business Owner, when it comes time to decide that you want to slow down, enjoy life, and More...]]> Exit Planning – Where Do I Start?
Dan Chomko
September 29, 2009

Business owners who run companies between $2-20 million in sales are very busy people indeed and are immersed in making their businesses successful day by day. So as a Business Owner, when it comes time to decide that you want to slow down, enjoy life, and focus on transitioning ownership of the business to someone else, where and whom do you turn to for help with this complex transition/transaction? What’s the best way to approach it? Is there one person who can be an advisor to the owner regarding all the aspects of this event – legal, personal, financial, tax, and business?

A tightly knit advisory team can be the single solution to the business owner’s question of where to turn. No single advisor to the business – accountant, attorney, business broker, consultant, etc – can bring all the expertise to the business owner to cover all aspects of this complex transaction. A group of professionals, working together seamlessly and bringing their special knowledge and talents together towards the singular client focus of effecting a successful business sales transaction is the ideal solution. But how to get started and engage with a group like this that will pay off with a tangible plan addressing current business issues and the steps forward?

A logical place to start is with an Exit Planning Assessment, or EPA, compiled by the tight knit group referred to above. An Exit Planning Assessment provides:

• A comprehensive view of the current state of the business including a formal opinion of value and factors that can be addressed to increase the value.
• An analysis of the business with an eye toward a compelling story to attract buyers.
• An individual analysis of legal, financial, tax, marketing, and operations infrastructure – current state and recommended state for a successful exit.
• A customized client roadmap for a successful future exit transaction.

The Pacific Exit Team is a San Francisco Bay area group of Professionals – representing a range of different companies and skills – working seamlessly together to provide all the capabilities and services needed to sell and exit a business the right way, on your terms. We offer our exclusive Exit Planning Assessment as an initial first step. The Pacific Exit Team members all focus on exit planning and execution and make sure that the client’s needs are our first priority.

With our process, we help maximize the value of your business and prepare you and your family for the transition from business ownership to retirement (or to the next venture or adventure).

Thank you!

Erik More...]]> The Pacific Exit Team is looking for more opportunities to do presentations or seminars on exit planning.  If you know of any organizations that are looking for speakers, particularly on topics related to exit planning and exit strategy issues, we would welcome the opportunity to talk with you.  Please contact us at your convenience.

Thank you!

Erik Bunaes

We will use this blog to discuss a range of issues and topics related to exit planning and exit strategy.

Our blog is a place of discussion, and a place to ask questions about exit strategy and exit planning.

Of course, if you would rather talk “live” please don’t heistate to More...]]> Welcome to the new Pacific Exit Team blog.

We will use this blog to discuss a range of issues and topics related to exit planning and exit strategy.

Our blog is a place of discussion, and a place to ask questions about exit strategy and exit planning.

Of course, if you would rather talk “live” please don’t heistate to contact us via phone or email and we’ll be glad to answer all your questions about exit planning and explain how we might help you accomplish this goal.

Thank you for visiting the Pacific Exit Team web site.