What does “Optimized” mean?

Optimized means the owner’s goals for the business are in alignment with the goals for his family and can be achieved and protected for future generations.

How much does it cost for all of these advisors?

Each case is different based on the advisory needs of the owner, the company, and the family from a planning perspective. We are sensitive to the cost considerations of the owner and utilize our structured approach to only engage the advisors required and when they are needed.  Our process outlines the timing and investment, allowing the business owner to control the expense and levels of engagement while still achieving optimized results.  We are firm believers in you get what you pay for and this process is no exception.  Being sensitive to costs while increasing value are the baseline tenants of our approach.  Our clients benefit from our structured process that maximizes efficiencies of each advisor to the overall outcome.

When do I tell my employees I am selling?

There are many factors to consider when it comes to communicating any form of transition or change impacting your employees. This is a sensitive issue that also becomes a special consideration of the owner and how he/she feels about the effect on employees with the exit option that best suits his/her objectives. There may also be requirements that can vary by State as far as providing notice to the State and employees that may be involved with a large stock or asset sale or potential employee terminations. Depending on the economic or industry climate, retaining employees who may seek alternative employment options in the face of change can be difficult, and potentially costly.  Often it is the individual owner who is best equipped to determine the answer to this question. Regardless, it should be discussed with your advisor and careful deliberation on this matter needs to be considered.

My son or daughter is taking over what do I need an advisor for?

Studies indicate that 50% of exiting owners want to transfer the business to their children. Yet in reality, less than 33% actually complete a successful internal transfer to their next generation. Considerations include: the preparedness of the child successor to lead the company successfully moving forward; impact on family dynamics from a perceived equality treatment amongst the children; the ability of the business to provide for buyout over time as it is rare the child successor has the means to pay cash at closing; owner’s objectives to remain involved in the business and in what role as well.  A contingency plan should also be in place in the event the internal transition to family does not allow for optimal fulfillment of the owners post transition objectives.

I plan on working for a long time why talk about transitioning so far in advance?

The success of an transition plan is dictated by the ability to develop and implement the strategies that increase the value of the company and improve the transferability of the leadership. Venture capital and private equity firms will not consider investing in a company unless the owner(s) have a transferrable asset. Investors want to know the interests of all parties are accounted for in both the short and long term. A comprehensive transition plan increases the likelihood the objectives of all stakeholders will be achieved.

How do I do this when I barely have time to just keep the lights on?

That is one of the primary benefits of working with a Optimized Business Transitions. Our structured process increases efficiencies thus reducing the demands (and disruptions) on the owner during the action plan development. The process can be spread over time thus reducing the impact of the planning engagement on the owner.  This allows the owner to remain focused on the day to day demands of running the business.

Why do I need OBT when my CPA knows all about my business?

A good CPA is invaluable to the planning process and plays a key role in maximizing the net proceeds of a successful transition. The CPA is instrumental in the preparation of financial statements, contributing to the deal structure and the tax impact of the transition options under consideration. Assembling a collaborative team of best in class providers in each discipline dramatically improves the probability of success in fulfilling the owner’s objectives. CPA’s are traditionally not specialists in coordinating the overall process and various disciplines (Legal, Estate, Risk Management, Investment Banker, Wealth Manager) that lead to optimized transition results.

Why is it important for me to have plans after I sell, I am going to play golf!

75 – 80% of owners interviewed 1 year after they have sold their business express regret for having sold or exited their business. This can be avoided if early on in the process a clear vision is established of what post transition lifestyle should look like, and of course, what it will take financially to sustain it. The majority of owners list personal reasons for exiting their business above selling it for the money.  Identifying the needs, motives, and post transition purpose early on establishes the foundation from which the planning process can proceed to advance a strategy that will provide not only financial reward, but also personal fulfillment for the transitioning owner.