BUSINESS PLANNING & TRANSITION PLANNING

We provide business transition planning to family businesses who are selling their company to outsiders or transitioning the business to younger family members. We also have a team who provides corporate and executive benefits such as 401(k)s and health insurance plans to small and mid-sized companies.
 

MANAGING THE FINANCIAL AND PSYCHOLOGICAL ISSUES

As a business owner, you have several options to create liquidity. You can transfer your business to your children or other family members, you can look for a strategic buyer, you can sell ownership to your employees through an employee stock ownership plan, or you can merge with another company. Each of these options poses unique benefits and challenges. We can help you navigate this process unlike an investment banker, business broker, CPA, or M&A attorney. Are these professionals necessary? Yes, you will surely need tax and legal advice, but before you negotiate the deal and structure the taxes, it makes sense to determine if the deal you are fighting for is even the deal you want. We provide not just financial advice, but we can help you first determine an appropriate deal for you—yes financially, but just as importantly, emotionally and with your ultimate goals in mind.

I admire entrepreneurs who have created—sometimes from just an idea or thought—a successful business. Having started and operated companies myself, I know the blood, sweat, and tears that is required. In the early days of the venture, most sacrifice receiving a regular paycheck, having employment benefits, and the security of working for a more established company. And then there is the sacrifice of time—the early mornings and late nights, the cold dinners and missed baseball games. For many business owners, the independence and freedom to chart your own course is worth it. While many businesses do no prosper, there are those that overcome the odds and flourish.

If you are at the point in life where you are considering selling your business or transferring it to family, this may be a bittersweet decision. Business owners in this situation have told me that they feel proud of what they’ve accomplished—almost as if their business is a child they’ve raised—and at the same time anxious about letting it go. They’ve expressed doubt and worry about what will come of the business they’ve invested so heavily in to start and operate.

We can help you navigate this process unlike an investment banker, business broker, CPA, or M&A attorney. Are these professionals necessary? Yes, you will surely need tax and legal advice, but before you negotiate the deal and structure the taxes, it makes sense to determine if the deal you are fighting for is even the deal you want. We provide not just financial advice, but we can help you first determine an appropriate deal for you—yes financially, but just as importantly, emotionally and with your ultimate goals in mind.


we can help you:

  • Determine who you should sell the company to;
  • Work with your legal and tax team to negotiate the best deal with a buyer;
  • Assess which family member should take over the business;
  • Structure a deal for your business whether you sell to an outsider or transfer within the family; Handle conflicts within the family;
  • Work with the children who will be taking over to prepare them for their new role;
  • Create a new chapter in your life now that you won’t be running the company day-to-day;
  • Manage your wealth so it provides the confidence and lifestyle you desire;
  • Navigate throughout the entire business transition process and beyond.

Selling a company or transferring a company to family has a natural cycle with ebbs and flows. This is to be expected. But we’ve found that when business owners drive the process, they create better deals, feel more confident, and get what they want. But often this is not what happens.

Business owners who are in control and know exactly what needs to be done in every aspect of their business, can feel a bit out of control when it comes to selling their company. They are outside of their comfort zone dealing with tax, legal, and financial issues that they’ve never had to consider. At the same time, there may be internal issues within the family that are causing tension and discord. The uncertainty can lead to frustration and ultimately to disengagement.


FAMILY BUSINESS TRANSITION PLANNING

The family business can be illustrated as three overlapping circles: the company, the owners, and the family. The model shows the range of interests that exist, and where they intersect or diverge. It demonstrates how the perspectives of the different parties depend on where they stand within the three circles as much as they do on the personalities of the people involved. It also illustrates how the family dynamics color the business itself. If there’s unhealthy conflict between the family members, it will spill over into the way the business is managed and owned – whether that’s through disputes over money, charges of nepotism or infighting over who should head the business when it passes from one generation to the next.

Conversely, if relations within the family are healthy, the business is more likely to be healthy, too. Solid, mutually supportive bonds help to encourage loyalty to the company, make people more motivated and facilitate decision-making qualities that mean the business itself is better equipped to deliver strong results.

The most successful family firms are those in which there’s a good balance between the three circles, with professional management, responsible business ownership and a harmonious family dynamic. Such companies tend to have clear written agreements about the composition and election of senior executives, the decisions that require a majority vote and the conditions in which family members can (or can’t) work in the business. They also have robust governance procedures; bring in outside directors and managers, where necessary; and monitor the performance of relatives who are working for the business, just as they do the performance of outside directors and managers.

Ownership issues are likewise separated from family issues. The most long-lasting family firms typically have rules about how shares can (or can’t) be traded inside and outside the family, and when shares can be sold – be it to raise fresh capital for the business or to release cash for the family members. In other words, they provide solid mechanisms for ensuring the business has enough funds to grow while maintaining the family’s control.