RealBusiness Workshop and Proper Business Succession Planning Presentation

The presentations on the 18th of September in Santa Fe, NM with NPRRA went well. Below is the presentation materials we used in the Succession Planning session. Of course, the meat of the content is what we talked about and is not included in the presentation itself. Feel free to give my office a call to learn more.

In other news, but on a related topic, several advisors and I are hosting a workshop on Wednesday, Sept. 30, at 7:30 am […]

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The First Natural Presumption about Exiting the Business: Sale

It seems that whenever a business owner is presented with the questions of what they will do to exit, the first thought is: Sell the business. However, even though the successful end of a business for a particular owner almost always involves some sort of sale, there are a lot of options and variations.

Often, owners think selling the business means selling to a third party who will take the whole thing off their hands for a nice sum of […]

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Use of Nonqualified Deferred Compensation for Exit or Succession Planning-Part 2

As an owner recognizes these issues, a nonqualified deferred compensation plan provides the owner with a tool he or she can use to advance the goals.

First, the owner can work to put in place a plan which provides certain key employees with significant benefits for growing the business to the size it needs to be to meet the needs. The owner can promise the key employees a portion of the growth of the company over and beyond its existing […]

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Use of Nonqualified Deferred Compensation for Exit or Succession Planning-Part 1

One possible use of nonqualified deferred compensation plans comes up in the context of exit or succession planning. As a business owner begins to contemplate his or her retirement from a business, several issues become apparent. One is that they need to make sure the business has sufficient value that it can be transferred for the value the owner needs upon retirement. Another is that the business’s value to a successor is dependent on its ability to operate without the […]

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Exit and Business Succession Planning: Valuations

When a buy-sell agreement includes a provision for the company or one or more owners to buy out the stock or interest of an owner, one of the most fundamental questions is how much they will have to pay.  There are several ways to handle this situation.

Agreed Value at Time of Purchase

First, it is always good to have a provision that allows the parties to work out a price on their own when they can agree.  Hopefully, the document is […]

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Exit and Business Succession Planning: The Disability Problem

Death of an owner is actually a little easier to plan for than the disability of an owner. Both situations raise very similar questions, for example, (1) who will do the work the owner was doing?, (2) how will the owner, or the owner’s family, survive?, and (3) who will step in to make decisions about running the business.  However, there are a few practical, big differences. 

When an Owner Dies…

When an owner dies, if the business has made basic […]

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Exit and Business Succession Planning: The Death of an Owner

Estate Planning
Unplanned Inheritance

When an owner dies, without specific planning, their business interest becomes a part of their estate. Without a will or directive, the assets in the estate will be transferred in probate according to state law. This transfer could also result in tax consequences depending on the value of the estate.  As far as exit planning goes, this may work adequately for a family run business where the spouse or a single heir is sufficiently involved in the business, […]

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Business Legacy, The Big Why, Purpose, Goals, and Business Structure and Planning

Purpose and Legacy

Tony Stark, in Iron Man II, makes his appearance at the Stark Expo as Iron Man, takes off the suit, and after pompous, self aggrandizing statements, asserts that it’s not about him, and its not really even about us, its about legacy.

Simon Sinek did a Ted Talk about how great leaders inspire action and focuses in on the question “Why?”. He suggests that people are engaged by causes in which they believe.

Conflict Between How and Why

Initially, business […]

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Business Exit Planning for Small Business

Everyone will exit their business at one point or another.  Whether you shut the business down, sell your interests, or pass away, someday, you will no longer be in your business.  The same goes for your business partners.  One day, they will no longer be in the business. 

Some basic questions will help frame the issues:

If your business partner dies, do you want to be partners with their spouse or heirs?
If you die, will your own spouse or heirs want, […]

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