Quantifying Your Options
A well-planned transition will assess each option and may require advanced planning and specialized expertise to achieve your goals. Knowing your options will reduce your risk and help you make well-informed decisions.
What range of values can you expect for the options that are available for your business? Not all businesses are viable candidates for a third-party sale to a private equity group or an industry competitor. Which option(s) are aligned with your personal goals? How does that measure against your financial goals?
Bridging a Gap
In this example, if the owner was intent on selling to employees, there is more than a $2 million shortfall to fund retirement. This is why you benefit from holistic advisement. With advanced planning, we may be able to help narrow or bridge this gap depending upon the owner’s priorities:
1. Catch up on savings with a custom-designed retirement plan
2. Create an internal market for employees (via qualified or non-qualified plans)
3. Tie key employees to the business (with equity or phantom equity)
4. Tax planning for your business transfer
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