THE EXIT PODCAST

Building Generational Wealth Through ESOPs: The Tax Benefits to Selling To An ESOP

The latest episode of THE EXIT Podcast, titled "Building Generational Wealth Through ESOPs," features host Brett Dearing, Certified Exit Planning Advisor and guest David Jasmund, Managing Director at PCE Investment Bank discussing the intricacies and advantages of selling a business to an Employee Stock Ownership Plan (ESOP). They delve into the benefits for shareholders, employees, and the company, highlighting tax advantages, stability, and potential generational wealth transfer. They explain the flexible nature of ESOP transactions, the financing options available, and the role of ERISA legislation in enabling these transitions.  The episode also emphasizes the governance of ESOP-owned companies and the financial incentives for both selling shareholders and employee participants. With 7,000 ESOP plans impacting 28 million employees in the U.S., the discussion provides crucial insights for business owners planning their succession.

 

Timestamp Overview:

00:00 Introduction: David Jasmund, Managing Director at PCE

04:56 Management buys out ownership, discusses employee stock ownership.

07:19 Succession planning for business ownership and factors.

11:03 ESOPs: wealth transfer, confidentiality, leadership, liquidity, secrecy.

16:28 ESOP transactions occur at fair market value.

18:35 ESOP trustee evaluates cash flows, distributes ownership.

22:27 ESOP trustee represents employee interest in company.

26:56 Sell shares to ESOP, defer tax, avoid gains.

29:53 Specialized lenders help structure ESOP financing. Private equity also participates in funding ESOPs.

31:23 Webinar covered key points on ESOP benefits.

37:23 ESOPs offer advantages for both employers, employees.

38:30 Open to discussing alternative business transaction options.

 

Want to learn more about the readiness of your business? Click on the link and begin maximizing business value: 

https://www.busownxchange.com/THE-EXIT-Access-Attractiveness-Assessment

 

Apple iTunes: https://podcasts.apple.com/us/podcast/the-exit-podcast/id1308750295

 

 

The Most Common Pitfalls to Avoid When Selling Your Business

Welcome to this special edition of THE EXIT Podcast, hosted by Brett Dearing. Today, Brett guides business owners through the crucial preparatory steps and strategies needed for a successful sale of their business. In this episode, Brett unveils the three most common mistakes business owners make during a sale--lack of financial preparedness, absence of a transition plan, and reluctance to invest in the necessary resources for a successful outcome. With an extensive discussion on understanding market conditions, health considerations, and potential unsolicited offers, Brett dives into multiple aspects essential for strategically positioning a business for sale. He stresses the importance of assembling a competent team of advisors, engaging in thorough pre-transaction planning, and understanding various exit options, from family succession to outright sale. Join us as Brett also explores developing a robust personal plan post-sale to prevent seller's remorse and ensure continued fulfillment. This episode promises to arm business owners with the knowledge to take control of their exit strategy and navigate the complexities of selling their business effectively.

 

Timestamped Overview:

00:00 Brett Dearing discusses business owners' challenges in 2024.

03:07 Prepare for business transition with diverse advisors.

09:26 Options for business exit strategy: investment banker, generational transfer, ESOP, private equity, leveraged recap, liquidation, succession.

10:34 Plan for business transfer, consult advisors, set goals.

16:50 Estate planning for business owners to minimize tax.

20:10 Business owners seeking new opportunities and impact.

22:51 Successful transaction. Planning for next chapter of life.

The 10 steps to success:

1. Financial Order: Ensure up-to-date, audited financials to increase business attractiveness to prospective buyers.

2. Plan Transitions: Develop a detailed transition strategy to preserve business value.

3. Investment Costs: Budget 2-5% of sale price for advisory and professional services.

4. Market Prep: Assess market conditions and personal readiness, crucial for engaging buyers.

5. Resist Unsolicited Offers: Politely defer competitors' offers, maintaining strategic business information.

6. Minimize Risks: Diversify customer base to mitigate risks related to customer concentration.

7. Exit Strategy Options: Explore various sale possibilities, like ESOPs or private equity sales, to find best fit.

8. Build Succession Plan: Outline business future roles and maintain legacy factors in negotiations.

9. Gather Advisors: Assemble a team specialized in exit strategies, including CPAs and M&A attorneys.

10. Focus on Business: Strategize on business improvements from buyer’s perspective to maximize sale value.

 

 

 

Building The Right Succession Plan For Your Business and Your Family

Succession planning is the most commonly used phrase business owners and advisors use when talking about preparing for the transfer of ownership. The harsh reality about succession planning is it's seldomly implemented, discussed amongst business partners or shared with family members.

On this episode of The EXIT, we will hear a heartfelt story from George Davidson, Founder of Secura Consultants about how the lack of succession planning impacted his family and how this personal life experience guided him to helping business owners around succession planning.

 

The episode will cover:

• The  most importance elements of  building your succession planning
• Tools business owners can use to implement a basic succession plan
• The five D's
• The mindset change of a sick or disabled business partner and the direct conflict
• Types of Buy-Sell Agreements
• Utilizing the right buy-sell structure for you
• The most litigated elements of a buy-sell agreement
• The importance of incorporating a valuation provision and determination of value clause in your agreement.

 

To contact our guests Georg Davidson, please click: http://linkedin.com/in/georgeprotectmyincome

Are You Sabotaging The Success of Your Business?

This Episode:

For those business owners that sometimes find the journey of being an entrepreneur to be lonely and at times full of self doubt, this is a great episode.

On this episode, we speak with Mark Taylor, Master Chair of VISTAGE on the importance of peer advisory support and identifying/addressing your internal saboteurs. Mark is a CEO that founded and successfully exited a technology company. As a Master Chair for Vistage, the premier executive coaching organization, Mark guides 146 CEOs and leaders across varied industries in NYC. Celebrated for his dedication, he's received the STAR Award for eight consecutive years and in 2022. Mark has a Masters in Leadership, and five coaching certifications, Mark is a Certified Positive Intelligence Coach, a Certified Working Genius Facilitator, and a Tribal Leadership Trainer. 

 

Mission of this Episode:

1. Help you identify your self saboteurs.
2. Practice the three step process to help eliminate your self saboteurs.
3. Break through self sabotage to elevate you and the success of your business. 

The EXIT Podcast Business Assessment: https://www.tepodcast.com/EXIT-Readiness-Assessment

 

Contact Us: https://www.tepodcast.com/Contact-Us

 

 

Navigating Growth: The Blueprint to Building A Successful Growth Plan

Planning For Growth in 2024!

As you start off the new year, business planning is an imperative process to the overall success of your business. In November of 2023, I presented at the 2023 Business Owner Summit where I was asked to speak to business owners on the importance of navigating revenue growth.  On this episode of the The EXIT Podcast, hear about potential headwinds in 2024 business owners may face and how you can utilize this business planning process to overcome and plan for future headwinds. This episode also covers the six key planning areas to successfully navigate growth. Use this workshop as the framework for your 2024 growth & business plan. 

Podcast listeners will also have the ability to go through the 2024 Navigating Growth Workshop. Below, please find the link to register for the Navigating Growth Workshop. 

Register For The Navigating Growth Workshop: Navigating Growth Workshop 

 

The Importance Of Conducting A Quality of Earnings On Your Business Before You Sell

On this episode, Brett Dearing and Corey Massella, Managing Director from UHY-Advisors, discusses the importance of conducting a Quality of Earnings on your business before you sell. The key benefits are:

• Having a clear understanding of company financials
• Stress test the revenue trends of your business
• Accurately establish Adjusted EBITDA, Cash Flow and Working Capital
• Have someone that can protect and defend your financials when going through a due diligence process. 

The podcast covers the key reasons of conducting a Quality of Earnings while covering the benefits  and impact to business valuations. 

The EXIT: CEO Founder Perspective With CEO Founder Greice Murphy

On this special edition of The EXIT, hear from our guest, CEO, and Founder, Greice Murphy talk about her journey as a business owner leaving her native country of Brazil at 23 years old and starting one of the fastest-growing healthcare companies in the U.S. with over 13,000% growth over 10 years, 79% client retention and a 95% positive customer experience.  

Greice will also walk us through her personal experience of selling her business from LOI to Close with a private equity company, what she learned and what she would do differently. 

 

Greice was the recipient of the Ernest & Young Entrepreneur Of The Year Award and Inc 5000's Hall of Fame Award. 

Don't miss this great episode and please share the podcasts with business owners.

How Cyberattacks Can Impact The Sale Of Your Business

Is your business being used as a trojan horse by cyber attackers to attack larger businesses, clients or service providers. On this episode our guest, Deborah Nitka, Manager at CohnReznick will discuss the fundamentals of building a functional cyber strategy for your business. Most importantly, we will also discuss how cyberattacks can reduce the value of your business and impact your ability to sell.

Other topics discussed on this episode:

• What business owners should focus on when protecting the company's valuable data
• Public resources you can use to start the process of building your cyber plan
• How buyers perceive cyberattacks 
• The importance of building and implementing a cyber strategy before entering a sale-side due diligence process
• The discloser requirements for a company that has been breached
• The steps needed to begin the process of creating a cyber security plan

Are you thinking about the sale of your business? Find out what may be keeping you and your business from being prepared: https://www.tepodcast.com/EXIT-Quick-Assessment

Please be sure to assist a business owner by sharing the THE EXIT Podcast: https://www.tepodcast.com/home

To learn more about this episode contact us at: https://www.tepodcast.com/Contact-Us

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increasing Net Proceeds Begins Before The Sale

Many business owners lose the opportunity to maximize net proceeds from the sale of their business by not following this fundamental rule. On this episode of The EXIT, you will hear from Tom Theurkauf, Partner at Sun Valuation on the importance of conducting a third party valuation as the foundation of your tax planning strategy. Brett and Tom will discuss the key components of a valuation and how the valuation process increases net proceeds.

In this episode, Brett and Tom will discuss:

1. The difference between an estate and M&A valuation
2. The key components of a valuation
3. When you should have a valuation conducted
4. Stories of owners losing millions in value appreciation by not having a valuation 

To learn more about the podcast, click on this link: https://www.tepodcast.com/home

 

How To Build A Successful Private Equity Partnership For Growth

Today business owners leave 15% to 25% of their business value on the negotiating table when exiting a business.

On this episode of THE EXIT you will hear from Steven Flyer, Partner at AUA Private Equity Partners about what business owners should focus on when thinking about formalizing a private equity partnership for growth. Steven will share his insights on:

• The State of M&A
• Utilizing a private equity partnership for growth
• The foundational framework of a private equity partnership
• Red flags business owner should look for when entering into a private equity partnership
• The difference between a financial partner and a strategic partner
• What areas of your business needs preparation before looking for a financial partner

Contact Steven Flyer: https://auaequity.com/team/steven-flyer/

Contact THE EXIT Podcast: https://www.tepodcast.com/