Peers – A Lifeline Through the Pandemic

The Exit Planning Peer Advisory Board (PAB) provides a safe place for business owners to discuss their challenges and offer support and insights to their fellow members. A look back at the last few meetings reveals another layer of the group’s value. The events of this year have put businesses and their leaders to the test – more than any event in recent history, and PAB members have found that their peers have dug deep to find and offer business solutions as well as personal and moral support.

Board members have together found creative solutions for issues related to:

  • Pivoting to adjust to changes in the business climate
  • Retaining business value
  • Working remotely
  • Changing technology needs
  • Retaining employees and when/how to bring them back
  • Helping with the added stress that employees may be experiencing
  • Best ways to implement health and safety protocols
  • Maintaining connections with clients
  • Finding new products to offer and new ways to serve customers
  • Changes that were intended to be temporary but may benefit the business long-term
  • Reassessing their companies’ preparedness for events beyond their control
  • Coronavirus relief funding
  • Cultivating company culture during the pandemic
  • Taking a fresh look at when to sell their businesses
  • Adjusting their exit planning strategy
  • Newly discovered opportunities
  • Finding hope and gratitude

The Peer Advisory Board has actually grown during this time – a testament to the value that is found in the support and insight of peers, not only for planning and carrying out their own exit strategy, but making their business better now, and finding a lifeline to get through tough times.

Like all business owners, you’ve likely dealt with changes that have required digging deep into the details of your business and how you operate it. You may have also discovered that it’s a good time to re-evaluate your long-term goals and exit strategy. The earlier you start to plan, the greater your chances of success at exiting on your terms, and the greater the opportunity to prepare for unexpected changes that can most certainly happen. We invite you to be a guest at our next Peer Advisory Board meeting and see for yourself the value in ready access to the wisdom and support of your peers. Contact me for details or for a complimentary consultation to discuss starting or revising your exit plan.

What Does Re-Emergence Look Like for Your Business?

Expect the best. Prepare for the worst. Capitalize on what comes.” – Zig Ziglar

At our July Peer Advisory Board (PAB) meeting on Exit Planning, the discussion was around what business looks like as we re-emerge and get back to business in this phase of the COVID-19 pandemic. We focused on addressing what responsibilities business owners face and what steps can be and have been taken to optimize success and keep business moving forward. This process may involve a step forward then a step back as businesses and state and local governments find the balance between being open and staying safe.

There’s no question that our business environment has shifted and in some ways those shifts may be long-term. So how can you effectively transition, giving attention to the present while keeping an eye on the future? Here is a peek into what the business owners on our board had to share.

Coronavirus Relief Funding

If your business is eligible, you can still apply through the Small Business Administration (SBA) for EIDL – the Economic Injury Disaster Loan. Grants (forgivable funds) were available for a time but were depleted as of July 11th. It is unknown whether those funds will be replenished with the next stimulus package. Check the details at SBA to find out whether you are eligible for the loan and how to apply.

Applications can still be submitted through August 8th for the Paycheck Protection Program (PPP). These funds have the potential to all be forgiven if they are spent according to very specific guidelines and within the designated timeframe. If you have or get PPP funds, check out my blog, Get the Greatest Benefits From Your PPP Funds, to ensure that you are spending and accounting for your use of the funds in keeping with the guidelines for forgiveness of the loan.

What’s New?

These days, the only constant is change, and it’s hard to predict what to expect in terms of the day-to-day changes we may face. A prudent approach is to adapt, anticipate and be resourceful. Ask these questions as you consider what you’ve already done that is working for you.

  • How has your company grown or how have you grown personally?
  • What obstacles have you overcome and how?
  • How has your company pivoted? Are there additional possibilities you should explore?
  • Have you made changes that were intended to be temporary that will benefit your business long-term?
  • What new opportunities do you see?
  • Where do you find hope?
  • What are you grateful for?

Focus on further defining and strengthening new ideas and practices. Build more flexibility into your business plan and operations. Since you’re dealing with a situation that calls for a contingency plan, now is a perfect time to develop one or tweak the one you have.

Bringing Employees Back

The consensus of our Peer Advisory Board was that a business owner’s greatest responsibility right now is keeping employees and customers safe. That, of course, involves continuing to follow protocols established by the Centers for Disease Control (CDC) and/or your own state and local public health mandates. Those guidelines may mean:

  • Employees are required to wear masks
  • Gloves may be required for some industries
  • Frequent hand washing
  • Hand sanitizer should be available, especially if hand washing is not always an option
  • Frequent sanitizing of surfaces
  • Physical distancing
  • Barriers are in place between work areas or between employees and customers

Employees may experience a new type of stress that is associated with work, fears of being exposed to the virus, or issues with family or finances that have arisen as a result of the situation. Take time to connect with each employee, know what’s going on in their lives, and find ways to support them through these transitions, reminding them they are not in this alone.

Perhaps invite in a mental health professional to provide tips for dealing with stress or a financial professional to help them deal with budgets that have been stretched thin; there are no cost and low cost options for both. Boost morale with positive distractions or gestures of appreciation like surprise breaks, meals, a gift card for a meal or groceries. Mask-wearing may be with us for a while. So make it more pleasant by finding well-made, easy to use masks; even consider providing nice masks, donned with your company logo. Involve employees in initiating and developing ideas for change, cutting expenses, and improving efficiency. They are the ones who do the work and may have great insight – and the participation instills a sense of control and accomplishment. Remember – you don’t have to go it alone either! Always keep lines of communication open and make yourself accessible. Take a look at your culture. Has it shifted? Does it need to? Check out my blog, Cultivating Company Culture in the COVID Era, for ideas.

Working Remotely

Has all or part of your staff worked remotely during stay-at-home orders? If so, can your business continue to work as efficiently, or more so, with staff working from home? If this might work well for you long-term, you could save costs in terms of office space, utilities, insurance and more. Specifics to consider might include:

  • What percentage or employees can work from home?
  • How do you determine who works remotely and when?
  • Do you have the technology you need?
  • Do your employees have the technology they need at home to do their work effectively?
  • Do you have a communications plan that works?
  • Do your employees need more training to work remotely?

Some of our PAB members plan to switch permanently to implementing remote work options.

Connecting With Customers

With the safety of employees and customers of paramount concern, follow protocols for customers as you would for employees. These protocols may include limiting occupancy which could require changing or staggering your hours of operation, rearranging your interior layout, or using outdoor areas to conduct business. Some questions to ask include:

  • How are you communicating requirements to clients? Make the tone of your requests and requirements friendly and understanding and find ways to say thank you for your customers’ cooperation.
  • How are you reaching out and encouraging business? Check in with clients to see how they are doing. Ask what they need and how you can help. You may get some great ideas from these conversations.
  • How are customers responding? As with employees, keep lines of communication open!

Customer Service

Customer service needs may have changed and issues may need to be addressed. Employees may require additional training. To identify your needs ask:

  • What’s changed in terms of our customers’ needs?
  • Does our current customer service philosophy and plan work? If not, what needs to change?
  • How are we making clients feel comfortable?
  • How do we demonstrate our appreciation?
  • Are we training employees on safe protocols?
  • Is other new/additional training needed?
  • Who’s providing the training and how?

Reassessing HOW you do business with your customers may result in some great new ways to better serve them and express your thanks for their loyalty.

Although these times come with challenges, they are rich with opportunity. Keep an attitude of gratitude and possibility, and be kind. We truly are all in this together and the more we cooperate and help each other, the sooner we will work through it – and come out the other side stronger and wiser.

As you’ve dealt with changes and dug deep into the details of your business, you may have discovered that it’s also a good time to re-evaluate your long-term goals and exit strategy. The earlier you start to plan, the greater your chances of success at exiting on your terms, and the greater the opportunity to navigate through unexpected changes that can most certainly happen. Contact me for a complimentary consultation to discuss starting or revising your exit plan.

Get the Greatest Benefit From Your PPP Funds

The rules and requirements associated with the Paycheck Protection Program (PPP), administered through the Small Business Administration, have undergone some changes as the program has evolved. If you’ve received these funds, check with your lender or CPA periodically to ensure that you’re in compliance.

June 30th is the deadline to apply if you haven’t already and are eligible. Let’s review the basics.

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Cultivating Company Culture in the COVID Era

Company culture – it’s a foundational element of your business. But with recent changes in how we do business, making culture a priority can be challenging. Employees may be working from multiple locations and on different schedules, how you connect with customers has likely changed, and potentially, you’ve pivoted in terms of the products and services you offer or how they are provided.

As business owners agreed during a discussion I led at our Exit Planning Peer Advisory Board meeting in March, the dynamic nature of culture demands attention when the business environment shifts. Perhaps recent changes call for you to revisit the specifics of your culture, to ensure that it remains fully relevant. Now may be the perfect time for a culture refresher – which can help you stay on track, or regain traction if you’ve felt a bit out of control.

What is culture and why is it important?

Culture is a set of values a company identifies and adopts that define the way it does business – both internally and externally – and that affects every aspect of the business. Here are some examples:

  • Your culture will dictate the mindset of your staff, their level of engagement, job satisfaction, and productivity.
  • The mindset and characteristics of your staff determine how your customers are treated.
  • Employee retention/turnover is driven by culture.
  • Clients/customers tend to choose vendors and providers with whom they share values.
  • Culture is tied to your vision, mission and strategy. If you don’t define and nurture it, culture will be defined by the circumstances you allow to exist within the business and will have a life of its own – which may run counter to what you need and want.
  • All these factors affect the bottom line.

How can you cultivate the business culture you need and want?

Start by identifying at least three to five words that define the culture you envision. Consider the core values that you want to be evident in your people, your products/services, and how work and communications are carried out. Then consider the culture that currently exists within your company and what characterizes it. Your people are a reflection of your existing culture. Are your employees engaged or distant? Are they happy? Are they in the right jobs and do they feel that they are given opportunities to contribute, be heard and grow? Is your turnover rate too high or do staff members want to stay with your company? Does your leadership team function well as a unit and lead effectively? Are communications clear and effective or is there confusion or discord? Customers also reflect your culture; consider whether there are issues with clients. If so identify what they are and why they are occurring.

Once you’ve assessed your current culture, compare it to the culture you want. If you’ve not hit the mark, visualize how the new and improved culture looks, in action, within your company, and what improvements might result. Identify the gaps and differences between your current culture and where you want to be. What changes need to occur to get there?

How can you motivate employees to buy into your culture?

Once you’ve defined your culture, introduce and clearly communicate it to your people, including why it is important. Model the culture you desire through your own actions and be sure your leadership team models it as well. Include culture in discussions about other aspects of your business and how it relates. Include the topic of culture as part of your hiring and review process. Recognize and reward the actions of employees that are consistent with your culture. Create an environment of transparency, where mistakes and errors can be acknowledged without fear of negative repercussions, but instead are viewed as opportunities to learn, improve, and change processes so that the same mistakes are not repeated.

What about the “toxic” employee?

In discussions about culture, the subject of toxic or problem employees often comes up. If you have them, what do you do about them to preserve your culture?

Where there are relationships, there will always be “people” issues. A recent study by the American Productivity and Quality Center revealed that only 3 to 5 percent of employees are considered truly toxic – so toxic symptoms may not justify a diagnosis. Staff members that exhibit “problematic” or “toxic” behaviors may do so because they do not feel valued or trusted to do the work they are capable of doing, may desire more communication from their managers, or may lack confidence about coming changes or their skill levels. A more proactive and appreciative management approach may resolve these problems.

Remember that individuals may be dealing with levels of stress right now that are far beyond what they were experiencing only weeks ago, and potentially from multiple sources – fears that work may be lost, a spouse’s loss of work, whether they can keep up with bills, if children will be educated from school or home this Fall, illness or even the loss of a loved one to COVID-19.

Stepping into the New Normal – what now?

You may have discovered that your values have changed along with changing circumstances. Maybe you have a greater appreciation for your employees and customers and want to make that evident. You may have found that having your staff work from home more may be a great way to do business. Perhaps you’ve come up with some innovative solutions or ideas. These are new values and practices that you may want to incorporate into your culture. Periodically put your culture to the test by asking these questions:

  • What defines your current culture?
  • Does it work for you or against you?
  • Does it come naturally to “live” your culture?
  • Are your employees engaged?
  • What needs to change?

Culture is an external expression of what drives your company internally. As our lives and businesses evolve, keep culture up front to stay true to your course and successfully navigate times of uncertainty.

Is It Time to Consider Selling Your Business?

The sudden and unexpected economic impact of issues surrounding COVID-19 likely has business owners who were considering selling and exiting their business reconsidering their strategy. The influence of these external factors may not be something you’d factored in or for which you have a contingency plan. So now, when it is clear what elements may impact the value of your business and how, may be the perfect time to begin putting an exit plan in place. The sooner you begin to plan, the better, since you may face substantial competition when you sell your business.

A 2019 survey of business owners by the Business Enterprise Institute, Inc. reveals information about those who own businesses, how they are planning for their exits, and trends that apply to business sales. Respondents reported yearly revenues ranging from $500,000 to $500 million. Business owners between the ages of 40 and 69 made up 80% of the respondents.


What trends may affect your ability to sell when you want, and for the price you need?

Baby boomers currently own many of the most successful businesses. As of this year, 2020, the youngest baby boomers are 56 years old. This combination of success and aging means that many business owners could exit their businesses within the next ten years or less, resulting in many companies on the market at once and much wealth will change hands.

This is demonstrated by survey results which indicate when business owners plan to exit their businesses. Since the “undecided” and “never” categories will eventually exit, almost 80% of respondents could be leaving their businesses within the next 10 years – 56% are planning towards that goal. 81% of respondents said they want to stop working in their businesses within the next 10 years.

Business Owners Planning to Exit

  • Fewer than 5 years  –   21%
  • 5-10 years  –  35%
  • More than 10 years  –  21%
  • Undecided  –  16%
  • Never  –  7%

Selling to an unrelated third party buyer is the most popular exit path with almost half of respondents expressing an interest in that method of leaving their business.

Preferred Exit Path (Note: Respondents could choose more than one path that was of interest.)

  • Unrelated third party buyer  –  48%
  • Child or family member  –  39%
  • Management or employees  –  39%
  • Undecided on feasible exit path  –  13%
  • Close doors  –  13%
  • ESOP  –  13%
  • Co-owners  –  11%


What have business owners done to plan their exits?

An encouraging number of owners, in fact 77% of them, say they have at least some idea of what they will do with their lives once they exit their businesses. In addition, 60% of owners say that they’ve determined their financial needs for their post-transition life. While this data suggests that business owners are considering a plan for when they exit, a large number don’t have a strategy in place for getting there. Consider these statistics:

  • 79% of business owners do not have a written plan in place for the future of their business, although many have taken some steps.
  • Between 45 and 56% have discussed their exits with family members, advisors or internal parties.
  • Only 33% have obtained a business valuation.
  • Only 21% have created a written plan for transfer of ownership or explored whether buyers exist.


What obstacles do business owners face that may prevent them from leaving their businesses?

Perceived obstacles included a need to improve their business first (33%), concerns about external factors (28%), and general uncertainties (12%). About 26% of respondents did not perceive any serious obstacles.   

Interestingly, fewer than 6% of respondents considered the value of their business as it relates to their exit to be an obstacle when, in fact, it is foundational to a successful exit plan. Without knowing the value of your business, you cannot know how much your business must grow in order to be worth what you need upon your exit to achieve your financial goals. About 60% of owners try to determine the value of their business using informal methods or none. An independent and objective appraisal is where you need to start if you are serious about planning your exit. And you should be!

Now can be the perfect time to take a look at the long-term. Use some of this slower time to assess and make some decisions about your objectives. And take action on those things which you CAN control – like putting a solid plan in place to use as your guide as we move into what may be a “new normal.” I’d welcome the opportunity to help you sort through some details and get moving in the direction of your goals. Contact me for a complimentary review of your situation and your next steps, whether you have an existing exit plan or need to start one.

Maintaining Business Value through Uncertain Times

With stock fluctuations, speculation and unknowns swirling around the coronavirus situation, business owners are focused first on ways to continue doing business. But especially for those who are planning to exit their businesses in the next few years, there is concern about maintaining the value of their business.

First, some general advice….

Don’t panic – stay calm no matter what’s going on around you. Make decisions based on fact, not fear. We do have to navigate this unprecedented event but remember that this is temporary – we WILL come through it. Focus on what you CAN control – your outlook, your attitude, your choice to stay connected with others, and your ability to comply with recommended CDC and public health protocols to keep yourself, your family and your team safe and healthy.

Managing Your Business and Maintaining Its Value

I’ve been fortunate to observe how some very successful entrepreneurs are dealing with the situation and would like to share some of the actions they are taking, along with some advice.

  1. Keep it Going
  • Be there – keep your business operating as normally has possible.
  • Continue to maintain accurate records and know your data.
  • Optimize your use of technology. I have become an even bigger fan of Zoom for meetings with clients, networking and even a happy hour.
  • Stay abreast of what’s going on in your industry and with your competitors.
  1. Support Your Staff
  • As a leader, model rational thinking and positive actions.
  • Allow, encourage, or perhaps require your people to work at home when at all practical. Be proactive in providing what they need to do so, and check in with them regularly, not only about their work but their personal well-being.
  • If your business has been included in the “Essential Businesses” designation, provide your work force with documentation of such on company letterhead, along with your contact information.
  • To minimize fear of the unknown, keep your staff informed about developments within your company, how you will be supporting them, any changes that are expected, and plans that are being made.
  • There are now federal programs in place to aid small businesses and workers. But if it becomes absolutely necessary to cut, consider reducing wages temporarily rather that laying off or dismissing staff members.
  1. Connect with Customers and Meet their Needs
  • Be there for your customers and stay connected. Check on their personal well-being as well as their business needs.
  • Set yourself apart by finding ways to become the “go to” choice for what you offer.
  • Continue to stand behind your products and services.
  • Consider special offers or payment plans to both help and retain clients and customers.
  • There are opportunities for every business to fill a need – be on the lookout for those opportunities within this situation. One of my clients has successfully liquidated stale inventory because of the current need.
  • Consider adapting your business plan and model to meet needs that arise. For example, a client of mine has added basic grocery necessities to the product line at his deli and includes those in his new delivery service. A major restaurant in Golden is providing groceries as well.
  1. Better Yourself and Your Business
  • Use this time to review and refine your strategy.
  • Assess whether operations align with strategy.
  • Review and tweak your long-term business plan.
  • Update processes and documentation.
  • Consider refreshing your marketing plan.
  • Be aware of issues this situation brings to light and use that awareness to make improvements. For example, are there ways you can better communicate with customers? What are some ways you can more effectively engage, motivate and reward your staff?

You’ve been successful at building your business. Stay the course! Focus on what you’re doing and how you’re doing it to help preserve and maintain your current value. Remember that you’re not at a disadvantage – all businesses are facing this same challenge. We are all in this together. I am here for you. Please contact me and let me know how I can help.

How a CPA Can Help Keep Your Exit Plan on Track

Every business owner needs an exit plan in place many years before his or her intended exit date. Once your exit strategy and plan have been developed, an essential next step in the process is assembling a team of preferred advisors.

Your exit planning expert will likely be at the hub of that team, interfacing with its members to help orchestrate your plan. Your advisory team should include a financial planner, estate attorney, banker, business broker, business attorney, and certified public accountant (CPA). No one professional has all the answers but the expertise of each team member will be required at particular points along the path of your exit plan. Once your team is in place you’ll want to introduce your plan and assign each advisor their tasks and activities. Their diverse skills and talents will help optimize the time and money you invest in the journey.

There is one member of this team, however, whose ongoing participation can be of tremendous value – your CPA. Many companies hire a CPA at tax time but rely only on a bookkeeper or accountant the rest of the year. Business owners often assume that handling their accounting and finances in this way will save the business money, when in fact, it could be costing.

What differentiates a CPA?

A CPA, or Certified Public Accountant, has in-depth education, typically a college degree in a financial field, and has passed rigorous examinations to attain the designation of CPA. They must be licensed with the state(s) in which they practice and comply with continuing education requirements to maintain licensure. Accountants and bookkeepers are not subject to specific education or licensing requirements. A CPA can potentially save your company more than you pay for their services – a great investment, not only for purposes of improving the efficiency and effectiveness of your accounting practices, but can be a tremendous asset in keeping your exit plan on track.

How can a CPA help you achieve your exit plan?

Minimizing taxes is foundational to meeting your exit objectives. CPAs must be current on federal tax laws and those for the states within which they are licensed. They are therefore in a position to help find every deduction and to provide high-level, tax-related advice. Considered “enrolled agents,” a CPA can even represent your business before the IRS, should it be audited. An accountant is not eligible to do so.

Also elemental to a successful exit plan is determining the current value of your business, projecting what its value must be at the time of your exit in order to accomplish your financial objectives, developing a plan, and staying on track to achieve and retain that value. You’ll likely work with valuation and exit planning experts to obtain the data and develop a solid profitability and growth strategy and plan. But once you have that in place, a CPA can provide the highly-detailed analyses necessary to monitor your progress and help you stick with your plan. If you’re falling behind, a CPA will be able to sort out why and make suggestions about how to get back on track – sooner than later.

As an exit planning accountability partner, a CPA will help optimize your day-to-day financial procedures. If you find yourself in any of the following circumstances, you are likely falling short of that optimization, which is costing your company – not only today, but it’s impacting the end goal of your exit plan.

  • Your books never seem to be up to date.
  • The accounting/bookkeeping system or software you use doesn’t work well for your business – or you have none.
  • Accounts payable or accounts receivable activity is behind.
  • Business debt could be better managed but you’re not sure how to make changes.
  • Costs could be reduced but you don’t know where to start cutting expenses.
  • A new business venture or stream of revenue is possible but you need a plan for when and how to fund it.
  • Financial forecasting is not done regularly.
  • Cash flow is not optimized.
  • Key Performance Indicators (KPIs) have not been identified and/or they are not monitored regularly.
  • You need a better understanding of how to interpret financials in order to make well-informed business decisions, large or small.
  • Financial policies and practices are not aligned with your business strategy.
  • Financial processes are not in place, or if so, are not thoroughly documented.
  • Your current financial practices may be costing you money.
  • Overseeing your bookkeeping and accounting activities yourself is interfering with what you need to be focused on – running and building your business.

Whether a staff member or an outside firm or individual, a CPA can assist you in a variety of roles, from working with your existing bookkeeper or accountant to taking full charge of your financial practices. A CPA can help you navigate and understand your financial statements so that you make more informed business decisions, and help keep a pulse on the financial health of your company – which affects every aspect of your business. As a CPA with four decades of experience in public accounting, and exit planning expertise, I recommend a CPA that is proactive, with a focus on your business objectives and how to achieve them.

Having a CPA on your team can save you thousands of dollars, even in the short term. And it will free you up to focus your time and energy on growing your business and working your exit plan to make that vision a reality. I’d welcome the opportunity to help you with a business valuation and the development of an exit strategy and plan. Contact me for a complimentary review of your current status.

The Importance of a Buy-Sell Agreement – Even if Your Partner is Your BFF

A buy-sell agreement, also referred to as a buyout agreement or business continuity agreement, is a contract that provides for the sale of an owner’s share of a business should certain events occur. When you start a business with one or more partners, your intention is to be in it for the long haul. If that partner is your friend, a new relationship evolves when you’re in business together. Friendships get stressed when friends become business partners – no matter how close you are before you start the business. And, while you plan to be in business with your current partner(s) indefinitely, it’s prudent to remember that nothing in business is forever, and having a buy-sell agreement in place at the outset is a smart business decision.

There are many events that can trigger the necessity for a buyout, including an owner’s retirement, bankruptcy, divorce, death, disability, changes (good or bad) within the families of owners, changes in career objectives, relocation, or a conflict with another owner that can’t be resolved. So it’s best to be prepared, not just hope for the best. The buyers that are party to the buy-sell agreement may be other owners, employees, or third parties.

Without a comprehensive buy-sell agreement, your business is vulnerable to a number of risks.

  • It can land in the wrong hands – maybe those of an angry spouse or disgruntled previous owner.
  • The business could die in the courts while ownership is being contested by surviving owners or heirs.
  • Without a designated buyer, you or your heirs may be forced to find a buyer quickly and settle for a sale price that is far below fair market value.

Who Needs a Buy-Sell Agreement?

A buy-sell agreement is especially important if you have business partners since it defines both rights and responsibilities of each owner to the continuity of the business. Crafting a buy-sell agreement is an opportunity to consider possibilities – that you may not want to think about, but should – and prepare for how you’d deal with them before you’re in the midst of a crisis or emotionally charged situation.

Even sole proprietors should consider a buy-sell agreement. You may have a long-time employee or even a friend or acquaintance that you’d like to take over the business upon your exit. With a buy-sell agreement in place, you have the peace of knowing that your business will end up in the right hands and your heirs or estate will be fairly compensated. A buy-sell agreement lays out a plan ahead of time to protect the future of your business, specifically:

  • It ensures that the right person(s) retain control of the business.
  • It specifies when shares of the business can be sold and to whom.
  • It specifies a fair price for the business so that other owners and/or heirs are fairly compensated if and when the agreement is triggered.
  • Partners also know what they can expect if/when they need to leave the business so it’s a great planning tool.

What should a buy-sell agreement include?

Each agreement will be based on the specifics of the business and the partners so no two will be exactly the same. But there are several basics that should be included.

  • Obviously, specify who is included in the agreement and who has voting control if this is applicable.
  • List the events that will trigger the agreement to go into effect. Consider the following.
    • Death
    • Disability
    • Divorce
    • Bankruptcy
    • Retirement
    • Conflict among co-owners
    • A threat to the business’ integrity because of an owner’s actions
    • Voluntary departure of an owner or “cash out”
  • Define the structure of the buy-sell agreement, which will determine who buys an outgoing owner’s share and for what price. Consider a variety of options and the pros and cons of each.
  • Define the value of the company by having a business valuation performed to determine a fair price for the business or its shares. Business values can fluctuate over months or years, and due to changes within the business or the market. Valuations should be conducted periodically to ensure that the agreement always reflects an accurate value and fair price.
  • Specify how the buyout can/will be funded should a trigger event occur. There may be many funding options including cash, loans, life insurance, disability insurance, installment payments, stock options, deferred compensation plans, or a combination.

A buy-sell agreement is one of the most important documents owners of a closely held business will ever sign. It should be crafted early in the life of the business, before complications or potential triggers occur. It’s sometimes an uncomfortable process but owners will breathe easier once it’s in place. Be sure to get the advice of your attorney when crafting this important contract. The expertise of an exit planner is also of great value. Review the agreement every few years to ensure that it reflects the current circumstances of the business and the current wishes of the owners.

I’d welcome the opportunity to help you plan for the potential events that can trigger a buyout, including crafting an agreement to ensure that your business remains in good hands and owners experience the confidence that having a plan in place for the future instills. Contact me for a complimentary review of your situation.

Why 2020 is the Year You Should Start Your Exit Plan

Most business owners count on the proceeds from the sale of their business to maintain the security of their lifestyle following their exit. Yet a study by business transition specialists, ROCG, revealed that no more than 33% of businesses actually complete the sales process and that only 42% of study participants had formal exit plans in place.

These statistics suggest a high correlation between having an exit plan and the ability to finalize the sale of your business – an event that will likely be the largest financial transaction of your life. With so much riding on having an exit strategy, why would anyone choose not to plan? There are many reasons cited, which include:

  • It’s too early to plan
  • Exit planning is too time consuming
  • The process is too complex or intimidating
  • I don’t want to deal with the associated family and employee issues
  • I don’t have, or know where to find, expert advice on exit planning

If you are counting on maintaining your lifestyle after selling your business sometime in the future, resolve that 2020 will be the year you embark upon your own exit planning journey!

There’s a step-by-step process for exit planning that will neutralize the intimidation factor. You’ll be inspired as you see things fall into place and are able to envision your future, your successful exit, and the next chapter of your life.

And, your business will benefit now. When you set your exit objectives and work backwards to determine what you need to do today in order to achieve those objectives, you’ll chart a course for the success of your company – one that is often more comprehensive than most business plans – with accountability built in.

Every business owner needs an exit strategy, along with a tactical plan to put that strategy to work. Where do you start? 

You likely have an idea of when you’d like to retire, sell your business, or otherwise step away and into your next adventure – or venture. Give that idea a specific exit date, write that date on a sticky note and post it where you’ll see it daily – perhaps on the door you use to leave your office at the end of the day.

As you see that date each day, it will change the way you think. A stated exit date is like a seed you’ve planted to start the wheels turning about your eventual exit. Now that you have the date, what’s next?

2020 is the perfect time to clarify your exit vision and sharpen your focus. For tips on how to do just that, read my recent blog, What Does Your Vision Look Like For the Next Chapter of Your Life? With a target date in place and a vision for the future, you’ll be motivated to jump in and start working on the specifics. Next?

Take our online Exit Planning Assessment to determine what progress you’ve made toward exit planning. Then take our Value Driver Analysis which will help determine the current value of your business and what it must be worth for you to achieve your exit planning financial objectives. Identifying your “gap” and filling it, is obviously a critical and major component of exit planning. This step will also illustrate why you need years to cultivate and protect the value of your business, and therefore, the importance of starting your exit plan now – well before that date on your sticky note.

For more information about exit planning, visit then contact me to make 2020 the year you start to create your future.

What Does Your Vision Look Like for the Next Chapter of Your Life?

Every business owner will eventually leave their company whether by selling the business, or retiring and handing over the reins to a family member or trusted employee. While you might know that day is coming, you’re likely entrenched in running and growing your business today, and not giving your eventual exit much thought. Maybe that departure seems a long way off. But is it really? Think back to five years ago, or even ten. Seems like yesterday, right?

You’ve heard enough about exit planning to know you need to do it. But how do you get started?

A plan for leaving your business starts with the same thing that guided and energized you when you started your business – a vision!

A vision for the next chapter of life is at the heart of every exit plan. You can chart your course only if you know your destination, yet sometimes it’s tough to see it clearly. The more clarity you have of the vision of your eventual exit, the more strategically you can hone the plan to get you there. What does your vision look like?

Consider the theoretical phases of the life cycle of an entrepreneur (and see the infographic).

Whether or not we think of these steps consciously, we likely all have an expectation, which started early on, that our business will enable us to achieve the prosperity to have a life that generally incorporates these steps, though the specifics will vary with each individual.

  1. Your business starts with a dream and a vision.
  2. It is likely born in and lives its first years from your home office.
  3. Your business is solid and you lease a facility from which to conduct it.
  4. You’ve experienced success and are able to buy a bigger home.
  5. Your business has grown – maybe it’s time to own your own office building or facility.
  6. A vacation home becomes an option.
  7. Perhaps you buy some investment/rental properties.
  8. You’re able to afford some toys – like a boat or classic cars.
  9. You transition out of your business and have leisure time and the money for golfing, travel or hobbies.
  10. You’ve experienced good fortune and success – it’s time to give back.

As you can see, this life cycle is a continuum but each phase has required planning. You’ve not suddenly jumped from one phase to another. That’s especially true of the last phase – the exit from your business – in that it will likely be the largest financial transaction of your life and the quality of life you experience for the rest of your life will be dependent on how well you plan for and execute that last step.

Clarify your vision for the next chapter of your life by asking and answering some questions.

  • What is your current situation?
    • Where are you in the life cycle of an entrepreneur?
    • Are you where you want to be at this point in time?
    • Have you moved any closer to planning your exit and your work compared to 12 months ago?
  • What’s your destination?
    • Have you thought about life after your transition away from your business?
    • What does the big picture look like?
    • What does your day look like after you retire?
    • How does your day begin?
    • Do you have a bucket list?
    • What’s on it? Be specific!
  • Who’s going with you?
    • Have you shared your dream or vision with anyone?
    • Who would you like to share it with?
  • How will you get there?
    • What is the date of your exit? If you don’t have one, set it now!
    • Do you know how much money you need to retire?
    • Is your business your single largest asset? Second largest?
    • Do you know what your business is worth?
    • Do you know when you will retire/transition the ownership of your business to someone else?
    • What is a first step you can take to start charting your course to a successful exit?

Take some time to clarify your vision for the post-exit chapter of your life. It will help guide and energize you as you plan. Then get a strategy and plan in place. Yes, it’s complex and starts with knowing where you are, along with details regarding the value of your business. But there are tools and a tried and proven step-by-step process to help you accomplish all that you need for a successful exit. And, planning your exit will benefit your business today! Few business plans are as precise as the road map that will result from embarking upon the journey of exit planning.

I’d welcome the opportunity to lend my expertise as you start or refine your exit strategy, to share the excitement and help you as you plan for the next chapter of your life. Contact me for a complimentary discussion of your vision and exit objectives.