Transition, Exit and Legacy Strategy & Planning

Exit Planning, a Process

Today’s busy family enterprises are complex and dynamic. Exiting the business and preserving assets requires a strategy and a plan. It’s not a transaction, it’s a process. Legal and tax considerations as well as family dynamics can determine whether transitioning between generations, creating an employee buy-out program or executing an outright sale, provides the best solution.

The Downtown Business Advisors, LLC

Downtown Business Advisors, LLC offers strategic planning, advisory and implementation services. Through our planning and advisory services, we help you unlock your wealth and convert the value of your company into cash. We help you build the road map, develop a realistic time table and transition forward. Protect your wealth and minimize your risk with Downtown Business Advisors.

DBA Transition News

  • Edition 23: Why Setting Goals is Important, Even if They Change
    Setting goals is important to owners who begin Exit Planning. Without goals, even the strongest processes fail, because they have no purpose to work toward. Your goals are what guide your process toward a successful exit.
  • Edition 22: Protect Against the Pain of Exiting Your Business
    All business owners will exit their business someday. Whether by choice, death, or otherwise, you need to be able to answer the question, “What will happen to me, my business, and my family upon my business exit?”
  • Edition 21: Which Comes First? Estate Planning or Exit Planning?
    Exit planning and estate planning can share the same goals. Learn how to leverage the time and money spent developing an exit plan into the design of an estate plan.
  • Edition 20: Death and Taxes vs. Preserving Wealth: The Final Exit Planning Contest
    The ideal exit plan includes a strategy to help you preserve your hard-earned wealth from unnecessary taxation when it is transferred to your family. In order to preserve wealth, business owners must take the necessary steps before they actually have wealth through the wealth preservation planning process.
  • Edition 19: Business Continuity Planning for Co-Owners
    Conducting a thorough review of your business continuity agreement helps to avoid problems between co-owners when one or both partners decide to leave the business.
  • Edition 18: Maintain Control, Save on Taxes, and Set Fair Value Using a Buy-Sell Agreement
    If owners agree about how to appraise business value and set the terms of payment in a Buy-Sell Agreement in advance of any transfer event, they can avoid the negotiations that can occur when one owner leaves the company.
  • Edition 17: Preparing for the Worst: Business-Continuity Planning for Sole Owners?
    Creating a contingency plan for your company should you depart unexpectedly is a vital part of your overall exit planning process.
  • Edition 16: The Essential Business Agreement: A Business-Continuity Agreement Among Owners
    If you co-own your business, the business-continuity agreement is one of the most important documents that you will sign. The agreement should provide a clear picture to a departing shareholder regarding how much money he or she will receive and how often, along with other terms and conditions.
  • Edition 15: Avoiding Disasters in Insider Transfers
    Transferring your business to your children or management team can be risky. It’s important to design a plan that minimizes risk so owners can recap all the potential benefits.
  • Edition 14: Sticking a Toe (or Two) in the Exit Planning Pool
    Owners can have common objections to undertaking the planning necessary to exit their companies successfully, but exit planning helps the business both while you are in it and when you choose to leave the company to a successor. How can you, as an owner, jump into exit planning?
  • Edition 13: Building Value is the Win-Win-Win of Exit Planning
    At some level, all owners understand that they will someday leave the businesses they have created. Exit planning is a process that you can use to transform yourself into an inconsequential owner for your sake, your family’s sake, and your company’s sake to make the transition out of the business as smooth as possible.
  • Edition 12: What is Your Business Really Worth?
    Knowing the value of your company is a fundamental, indispensable element of sound decision-making. Whether owners are ready to exit their business today, tomorrow, or in 10 years, they need more than a thumbnail sketch of value to make the best choices.
  • Edition 11: Top Excuses Owners Use to Avoid Exit Planning
    Certain hurdles can prevent business owners from making necessary plans to exit. Avoid making these common excuses to expedite and improve the exit process.
  • Edition 10: Selecting Your Exit Goals
    The starting point for any type of plan development is defining goals. If you prefer to leave your business in style, take time to formulate specific, consistent and attainable goals and objectives.
  • Edition 9: Failure to Plan Has a Price
    Failure to put a plan in motion can be fatal to a successful exit. Plan accordingly and act today to create the best possible exit path.
  • Edition 8: Exits Are Inevitable, Failure is Not: Planning a Successful Exit
    By setting measurable goals, remaining flexible and employing a proven process, you can develop a comprehensive exit plan that will ensure a successful exit.
  • Edition 7: The Impact of Value Drivers on Sale Price
    Building value within a business is sometimes easier said than done. A solid customer base and realistic growth strategy, along with other universal value drivers, help to better position a company for a successful and positive exit.
  • Edition 6: Does Value-Building Equal Exit Planning?
    Building value as a necessary component of exit planning. Discusses tactics that owners can employ to close gaps between business value and value needed upon exiting.
  • Edition 5: Knowing Business Value is a Very Good Place to Start
    Discusses the importance of knowing the value of your business in the present so you can be smart about creating greater business value as quickly as possible for the most successful exit.
  • Edition 4: First Things First: Prioritize your Objectives
    Defining and achieving objectives set in planning your exit.
  • Edition 3: Why Exit Planning? Why Now?
    The value of an exit plan, listed in facts and examples.
  • Edition 2: Former Business Owners Express No Regrets About Selling Out
    Practical example of former business owners involved in owner to former owner transition, with three separate approaches to selling out.
  • Edition 1: Is Exit Planning Worth the Time and Money?
    The value of exit planning and how to orchestrate a business exit that fulfills personal and financial goals. Discusses motivating managers with a “stay bonus” to support the transition from old to new ownership.

DBA White Papers

  • C vs. S Corporation
    I expect to exit my business down the road. What do I do now?
  • Business Continuity
    Making sure your business continues if you do not. Includes discussion on steps after death, loss of employees and customers and moving forward with company loss of financial resources.
  • Business Valuation
    Five reasons you need to know what your business is worth: Establishes your starting line and distance to the finish, tests your exit objectives, provides important tax information, gives you a critical litmus test and provides owners an objective basis for incentive plans.
  • Employee Incentive Planning
    Discusses the need for motivated employees to grow business value and how to do so through equity-based plans, issuing stock, cash-based plans, phantom stock and stock appreciation rights plans.
  • ESOP Opportunities
    Overview of the Exit Planning process, including discussion of the Employee Stock Ownership Plan, how a buyout works, what makes an ESOP successful and various advantages and disadvantages.
  • Exit Routes
    The advantages and disadvantages of each type of exit route and the process that enables owners to choose the best exit path for them. Discusses transfer to family members, transfer to employees via ESOP, sale to key employees, co-owners or a third party, etc.
  • Headwinds
    A look at how headwinds can affect efforts to leave your business in style and what actions you can take to minimize their effects. Headwinds discussed include economy, taxes and ROI.
  • Inevitabilities
    The seven steps of crafting an exit plan: Set objectives/goals, quantify available resources, focus on business value, sale to third party, transfer to insiders, develop a contingency plan for the business, develop a contingency plan for the owner’s family.
  • Short Term Key Employee Incentive Planning
    Using short-term key employee incentives to increase sale price. How to attract, motivate and keep key employees in order to sell the business at the highest possible price.
  • Transferring Wealth to Children
    A three-part process to transfer business wealth to children: Fixing the owner’s financial objectives before considering a wealth transfer, determining the amount of wealth to be transferred and designing a wealth transfer strategy
  • Transferring Your Company to Key Employees
    Discussion of long term installment sales, leveraged management buyouts, ESOPs and modified buyouts for owners wishing to sell their business to management.
  • Value Drivers
    Whether a buyer will pay a premium price for a business depends upon the efforts of the owner to adopt and implement the Value Drivers. These include a motivated management team, operating systems that improve sustainability of cash flows, a diversified customer base, facility appearance consistent with asking price, a realistic growth strategy, effective financial controls and good and improving cash flow.

Contact an experienced lawyer for business advice today at Anthony J. Madonia & Associates, Ltd. Do not wait to get the help you need, call us at (312) 578-9300.

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