•There are approximately two million businesses with 10 or more employees in America.
  United States Census Bureau 2004 report

•50% of the business owners in the United States are over the age of 50

•According to Price Waterhouse Coopers, 1 out of 2 company owners plan to sell their business
 in the next 10 years

•According to Price Waterhouse Coopers, only 22% of business owners report having done any
 Succession Planning

A business owner typically has a team of advisors they trust to advise them on business and financial issues. When a business owner contemplates transitioning out of their business, the business owner usually establishes a relationship with a Business Exit Specialist; i.e. a Business Exit Planning Consultant.

With over 500 different exit strategy combinations, business owners need to seek out an advisor who can provide strategies that will work best for them. When an owner reaches the decision to exit their business, it tends to be the single most important business and financial decision of their life.

When a business is to continue, the current owner must consider five important elements before exiting the business.
They are potential new owners, tax benefits, timing, financing and family estate planning.

1. Potential owners
    • Family members
    • Employees
    • Outside buyer
    • Any of the above combination

2. Tax benefits
    Every strategy has some kind of income and estate tax implication. Often times a strategy that has the best tax benefit
    can’t be utilized because the business entity is disqualified or the entity is in the wrong tax structure (example: S-Corp
    or C-Corp).

3. Timing is Everything
    Understanding the relationship between time and timing is important.
    Time: is preparing the business owner and the business for the transition
    Timing: is being prepared when the offer to sell is at hand or family is ready to take over

4. Financing
    Business owners must understand that the business will fund their exit. Even if an outside buyer were to purchase the
    business, there will be representations and warranties that state the business will generate the income to support the
    owners’ market value.

5. Family Estate Planning
    Without proper estate planning, the business owner could potentially forfeit up to 50% of their assets to creditors and
    the government.