Business Transition Planning
There are some 6,000,000 privately held businesses in the U.S., representing nearly $10 trillion in wealth*. But while most business owners want to transition those businesses to new ownership within ten years, only about one in four will succeed. Will yours be one of the successful ones? How much money will you leave on the table due to a forced sale, inadequate planning, or frustration?
How much money are you willing to leave on the table?
The difference between sale prices can be surprisingly large. Let's look at a business whose EBITDA is $5MM, in an industry where sale price might range from a multiple of 4 to 8. The outcome of the sale can range from $20M to $40MM. If you'd rather be on the high end of that range, you're not alone. But, like all business owners, you first have to answer three questions.
- For how much do you want to sell your company, and what is it worth? This requires knowing how much you need – after taxes, fees and repayment of debt – to accomplish your goals.
- To whom do you want to sell, with the transaction structure options and associated risks? The options can seem overwhelming and can be colored by emotional factors. Understanding what’s best for all parties can require outside counsel.
- When do you want to sell, and what are the factors to consider? This question may sound simple, but most business owners report being unhappy within a year of selling their business.
*Study Shows Why Many Business Owners Can’t Sell When They Want To, forbes.com, February 5, 2017
A phased approach to reaching your goals
Brightworth has helped business owners address their unique challenges for over 20 years. We work in harmony with your other trusted advisors to help ensure that income and estate taxes are minimized while personal wealth, your family legacy and charitable vision are maximized.
Helping you do what you do best
Owners often make the mistake of trying to manage the transition process.
Successful owners maintain their CEO position and oversee successful management of the process.