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The Seven Step Exit Planning Process.

Components of a Comprehensive Exit Plan

1. Identify Owner Objectives

Universal Objectives:

  • When do you want to leave the business?
  • How much cash do you need?
  • To whom do you want to transfer the business?
    • Family?
    • Co-Owner?
    • Key Employee’s?
    • Outside Party?

Other Considerations: 

  • Leave a legacy?
  • Never “retire?”
  • Philanthropic works?

2. Quantify Business and Personal Resources

Universal Objectives:

  • Provides a baseline value.
  • Measures business and personal resources.
  • Allows you to monitor progress toward stated objectives.

3. Build and Protect Business Value

Universal Objectives:

  • Grow business value.
  • Reduce income taxes upon sale of business.¹
  • Protect assets from business and personal creditors.
  • Motivate & keep Key Employees & Management focused.
  • Create ability to sell the business.

4. Sale of Ownership to a Third Party

Universal Objectives:

  • Cash at closing.
  • Reduce Financial risk.
  • No family succession issues.
  • Speed of exit.

5. Transfer Ownership to Insiders

Universal Objectives:

  • Achieves Exit Objectives of:
    • Transferring ownership to a family member.
    • Selling to Key Employee or Key Employee Group (KEG).
    • Transitioning ownership to a Partner(s).
  • Motivates and retains key employees.
  • Reduces tax burden.
  • Reduces risk and increases amount of money received.

6. Business Continuity: Lifetime & At Death

Universal Objectives:

  • Objectives can still be achieved if you don’t survive.
  • Retain ownership and control even if co-owner departs.
  • Can force non-contributing owners to leave.
  • Helps ensures survival of the business for the benefit of others.
  • Helps achieve the goal of family receiving value of your interest.

7. Personal Wealth and Estate Planning

Universal Objectives:

  • Preserve wealth, minimize taxes using both lifetime and death planning tools.
  • Integrates lifetime exit objectives with estate plan.
  • Estate planning becomes part of business planning.

¹ Guardian, its subsidiaries, agents, and employees, do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

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