An important first step in the planning process is to consider specific issues related to you and your company, which can include the following:
Is price and “cash at close” the only consideration or are their other objectives equally as important?
While business owners often focus on transaction economics, it is not uncommon for business owners to place other considerations such as company legacy as an equal or more important objective.
Often business owners like the idea of diversifying their wealth, but at the same time want to remain involved in the business for the foreseeable future. Having said that, many business owners nearing retirement have grown weary after surviving the “Great Recession”, and the idea of a permanent spot on the beach doesn’t sound so bad after all.
Do you have a strong management team behind you?
This is a critical element as you evaluate options. Regardless, development of a strong management team can increase the alternatives available while maximizing value in most any transaction.
In evaluating this option, it is also important to objectively evaluate if there is a capable and qualified family successor who is willing to take over the family trade.
Business owners often have an affinity to the management and employees who have helped make their company successful, and the idea of rewarding them with employee ownership while also yielding an acceptable value can be appealing.
While this is just a short list of the many considerations that should be discussed, it may be reassuring to know there are alternatives available that can meet any business owner’s key goals and objectives. Taking the time to consider and develop an ownership transition plan, even if it means executing that plan at some point in the future, can give business owners piece of mind that they have a strategy to capitalize on all their years of hard work and calculated risks.