business exit strategy

Should I Sell My Business to an Employee or Heir?

Vandenack Weaver LLC Business Succession Planning , ,

A Video FAQ with Ronald K. Parsonage.

That is certainly a difficult question because you probably have an emotional attachment to these people and would like to sell it, but you, first of all, have to establish whether or not they are capable of running the business. The second most important aspect, if you care about the business and the people, is making sure that the staff that is there will continue in your absence. Frequently when you sell to an employee or to an heir you find out that you can’t, perhaps, charge the full amount for the business that you think it would bring from others. There are ways to do it with employees through ESOPs and through redemption agreements that can ease the pain of the cost of taking over the business.

© 2014 Parsonage Vandenack Williams LLC

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What Should Be Included in My Business Exit Strategy?

Vandenack Weaver LLC Business Succession Planning

A Video FAQ with Mary E. Vandenack.

The first thing you should consider in your exit strategy is the timeframe: when are you wanting to exit the business? The more time that you have to plan that exit, the more opportunities you are going to have to create. The next things you want to consider are who your potential buyers are and what type of value your business has. Each industry has a way of evaluating the business and you need to know what your industry evaluation strategy is so that you can maximize your business during the time before you exit so that when you do exit, you are able to get the best dollars for your efforts over the years.

© 2014 Parsonage Vandenack Williams LLC

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How Do I Keep My Business Going in the Event of the Loss of a Partner?

Vandenack Weaver LLC Business Succession Planning , , ,

A Video FAQ with Mark A. Williams.

It is usually important if you have partners in a business to have some type of buy-sell agreement. Partners should agree on what happens if one of them passes away, becomes disabled, or simply doesn’t want to work anymore. Usually you can fund these types of situations through insurance or through the company saving up so that if a partner does want to walk away from the business the other partner can purchase the interest and keep the business going. There are a lot of other ways to do it, but sometimes for simplicity it’s best to think about when two people come together for a partnership, you need to decide what is going to happen when they don’t want to work together anymore.

© 2014 Parsonage Vandenack Williams LLC

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What Are Buy-Sell Agreements?

Vandenack Weaver LLC Business Succession Planning ,

A Video FAQ with Mary E. Vandenack.

Buy-sell agreements are agreements between owners of a business governing the relationship. Typically, they will govern what happens when one of the business owners wants to leave. A buy-sell agreement will cover different types of situations as well. If the owners also work for the business, it will cover what happens when one of the owners decides to discontinue working for the business. Another issue that will be covered is what happens if one of the owners becomes disabled or if one dies while owning the business. An important aspect of the buy-sell agreement is determining the value—so how much is going to be paid out to a business owner that dies or becomes disabled. Another issue is the terms of a buy-out. Is it going to be an issue for the business to figure out how to fund a sudden payment to an owner of the business. Often strategies like life insurance or disability funding for a buy-out are used to assist with that.

© 2014 Parsonage Vandenack Williams LLC

For more information, Contact Us