Options
Every Business Owner Over 50 Should Know
xiting
your
business
will be one of the most
emotionally difficult things
you’ll ever do. But one of
the best things we can
do for you and your busi-
ness is to ditch the cookie
cutter exit plans and design an option
that addresses your unique goals and
objectives. This is OPTION PLANNING.
It is the chance to architect your exit.
Regardless of how you plan to make
your exit, an exit planning advisor can
help you understand your options – and
which ones will hurt least.
Transfer your company to key
employees or management
One of the most common and least risky
exit paths, this strategy helps you main-
tain control and add to the value and
growth of the company until all sale pro-
ceeds are received.
Internal buyers are usually more likely to
stay true to the legacy you worked so hard
to build, so transferring your business to
key employees could help keep your lega-
cy, culture, benefits and staff intact.
This type of sale typically yields more
income over the course of a multi-year
period, which gives you time to phase-
out of the business and prepare for
retirement. It can also minimize your
income tax consequences.
Keep it in the family
Want to provide for your heirs and pre-
serve your legacy? You might consider
selling to family. Grooming a family mem-
ber as your successor can result in a
smooth transition that can be completed
over time. However, this exit plan could
create some family conflict as you as-
sess who is in charge or who is qualified
to lead. You might also have to restruc-
ture the business to ensure the transfer
benefits from the transition.
As with most succession strategies, one
of your goals will be to minimize taxes
upon death. This option can help you
accomplish that.
Selling to a third party
Maybe you’d rather just put your busi-
ness up for sale. A successful business
This series is designed to address challenges and considerations
regularly faced by owners of small- to mid-sized businesses.
Check out past Small Business Corner articles at
www.reacpa.com/small-business-corner.
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