Merger & Acquisition Insights

Managing Director Fred Hess on Exit Planning vs. Succession Planning: In the emerging field of Exit Planning for business owners, the terminology can be a little confusing. Many people believe that Succession Planning is the same as Exit Planning, but it is not. Either plan starts from the perspective of the business owner’s goals and objectives. It addresses a wide …

As owners approach their business exits, one topic that’s often overlooked is unexpected death or permanent incapacitation. One reason owners gloss over this topic is because it injects an uncontrollable element into a controlled process. Many successful business owners take pride in the control they have over guiding their businesses toward success, so the idea that all of that hard …

We often hear owners say they want to transfer their businesses to third-party buyers when they first encounter the concept of Exit Planning. However, we’ve observed that in many completed Exit Plans, owners actually choose to transfer their businesses to employees. Some reasons for this decision include employees knowing the culture and values of the business, a desire to keep the business with people …

For some business owners, a third-party sale is their best option for a successful business exit. Third-party sales are popular because owners often believe they can get the most money from their businesses in as little time as possible from a third-party buyer. They might be right. But what they may not consider is how little control they have over …

It’s likely that few people, if any, have ever told you, “You need to make yourself less important,” regarding your business. But sophisticated buyers look for businesses that can operate without their owners. Unless your goal is to sell or transfer your business, and then stay with the business as a subordinate to assure a smooth transition, you’ll need to …

Setting goals is critically 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, and without them, you’ll find yourself spinning your wheels in the mud of indecision. While setting goals is the most important thing you …

You know how things work in terms of starting and running a successful business. You’ve hired the right people, offered a useful product or service, and developed high-quality relationships with your customers and vendors. None of these things magically appeared out of thin air: You most likely followed a proven process, mixed in with your own creative problem solving, to …

A successful business Exit Plan achieves three important owner goals: Financial Security: The business sale or transfer provides the amount of income the owner and owner’s family need after the owner’s exit. The Right Person: The owner chooses his or her successor (children, key employees, co-owners, or a third party). Income Tax Minimization: The owner minimizes the amount of cash the government takes …