THE PATH TO A SUCCESSFUL EXIT PLAN

EXIT ON YOUR TERMS
 

THE PATH TO A SUCCESSFUL EXIT PLAN

EXIT ON YOUR TERMS
 
WHEN DO YOU WANT TO GO?
Specifically, when do you want to be out of your business on a day-to-day basis?
TO WHOM DO YOU WANT TO SELL IT?
Do you want to sell it to family members, key employees or an outside third party?
WHAT DO YOU WANT FROM THE SALE?
How much do you want or need (in terms of dollars) from the sale of your business?
WHEN DO YOU WANT TO GO?
Specifically, when do you want to be out of your business on a day-to-day basis?
TO WHOM DO YOU WANT TO SELL IT?
Do you want to sell it to family members, key employees or an outside third party?
WHAT DO YOU WANT FROM THE SALE?
How much do you want or need (in terms of dollars) from the sale of your business?
WHEN DO YOU WANT TO GO?
Specifically, when do you want to be out of your business on a day-to-day basis?
TO WHOM DO YOU WANT TO SELL IT?
Do you want to sell it to family members, key employees or an outside third party?
WHAT DO YOU WANT FROM THE SALE?
How much do you want or need (in terms of dollars) from the sale of your business?
As Exit Planning Specialists with more than 30 years of experience serving Business Owners, The Reichert Company specializes in the creation and execution of a strategy allowing owners to exit their businesses on their terms and conditions.
We use an established seven-step process that creates a written roadmap or Exit Plan, involving efforts of several professions facilitated and led by the Exit Planning Specialist who ensures not only the plan creation, but also its timely execution.
The result is an orderly process that focuses on your objectives, helps build value in your company, minimizes your tax liability, maximizes your financial return, plans for contingencies, and incorporates your personal wealth planning.

HAVE YOU PREPARED FOR THE BIGGEST FINANCIAL EVENT IN YOUR LIFE?

YOU ARE IN GOOD COMPANY…

Over 30 million businesses in operation

%

Of owners want to exit in the next 10 years

%

Do not have a written plan for the future ownership of their business

%

Of owners will stop being owners at some point

A FEW THINGS EVERY BUSINESS OWNER SHOULD KNOW

Don Reichert (President of The Reichert Company) has an important, 3-minute message for Business Owners about things to consider when contemplating retirement and exiting their business.

THE ONE DOCUMENT
EVERY BUSINESS (WITH
MULTIPLE STOCKHOLDERS)
SHOULD HAVE

If your company has more than one owner/stockholder and if one owner departs, this one document can make a critical difference in the tax and financial health of the company as well as departing and remaining owners and their families

THE SEVEN-STEP EXIT PLANNING PATH

Our Seven Step Exit Planning Process is a comprehensive approach to helping you plan for a successful future in which you transfer the ownership of your business at the time you want, for the money you need, to the person you choose. The Seven Steps include:
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1. IDENTIFY OWNER OBJECTIVES
An Exit Plan is successful only if it takes you to the destination you choose. Three primary goals to determine are:

1) Leaving the company on the date you choose

2) Leaving the company to the successor you choose

3) Leaving the company with the amount of cash you desire to secure a comfortable post-business life

Owners also have secondary objectives that can significantly influence Exit Planning choices. For example, you may want your exit to benefit certain key employees or you may wish to pass wealth (with minimal tax consequences) to family members.

2. IDENTIFY BUSINESS & PERSONAL FINANCIAL RESOURCES
In Step Two, we establish:

1) The value of your business today

2) The potential cash flow of your business over the next few years

By determining the value of your company today and the amount of after-tax cash you can expect to receive from its transfer, we can establish if your financial objectives can be met. If your financial objectives cannot be met today, a business valuation will tell us how much your company must grow before you can exit.

3. MAXIMIZE & PROTECT BUSINESS VALUE
We call the elements that build or preserve the value of a company “Value Drivers.” Value Drivers that preserve value (such as effective financial controls) reduce the risks associated with owning the business. Those that build value (such as a motivated management team) enhance the prospect that the business will grow significantly in the future.

Value Drivers are important whether your Exit Objective is to transfer your business to “insiders” (family members or key employees) or whether you plan to sell to a third party. If transferring to insiders, Value Drivers must be in place so that the business will generate the income stream you need to reach your financial objectives. If you plan to sell to a third party, buyers look for—and pay top dollar for—effective Value Drivers.

In Step Three, we will identify which Value Drivers exist in your business, which are missing, and which are most vigorous. We also will examine what measures you’ve taken to protect the intrinsic value of your company.

4. TRANSFER OWNERSHIP TO A THIRD PARTY
Preparing a business for sale to a third party and completing the transaction takes more time and planning than transferring it to insiders. Keep in mind that only half of all businesses listed for sale do sell, and that sale prices are influenced by the ups and downs of the marketplace. We believe the best way to ensure success is to get organized well in advance of putting the company on the market. In addition to improving the likelihood of closing the deal, doing so also significantly reduces the stress on both you and your business.
5. TRANSFER OWNERSHIP TO INSIDERS
Transferring ownership of your company to insiders (family members, co-owners or key employees) is the preferred method for transferring ownership, especially if your company is too small to attract the notice of a large third-party buyer. Typically, an insider transfer:

  • Yields more cash than a third-party sale
  • Allows the owner to exit sooner
  • Involves less risk both in reaching the exit and in getting paid

The biggest question owners have as they consider this type of sale is, “How can my children / employees / co-owner pay me what I want for my company when they don’t have a lot of money?” Effective and careful planning can overcome this difficulty. During this process, there will also be a focus on minimizing income tax consequences for both seller and buyer, and on acquiring the cash to pay the purchase price.

6. BUSINESS CONTINUITY
None of us likes to think about what might happen to our business or our families if we were to die or become disabled. Business continuity planning can protect your rights in a number of important ways. If your co-owner leaves the company, dies, or divorces, the business continuity agreement can dictate what you will pay for the departing owner’s interest. Or, if you died or became disabled, the agreement could protect your family’s right to its share of the company.

Most owners live to see the day they leave their companies, but some do not. The purpose of business continuity planning is to make sure that if you can’t run your company, it will survive and your family’s financial security will be assured.

7. PERSONAL WEALTH & ESTATE PLANNING
As a business owner, you are in a unique position in the world of personal wealth and estate planning because your company represents a significant portion of both your net worth and annual income. If your children are active in your business, this type of planning will be more complex. In Step Seven, we work to protect your personal assets and manage wealth both now and in the future—all while promoting family harmony.

YOUR EXIT PLANNING TEAM

Each step in our Seven-Step Exit Planning Process is led by the Exit Planning Specialist who facilitates the execution of the plan through our network of independent advisors with specialization in the areas listed below. Click on each box to learn more about their roles in the exit planning and execution process.
EXIT PLANNING SPECIALIST

Don Reichert


 

The Reichert Company’s Exit Planning Team is led by Don Reichert, a financial services veteran with more than 25 years of experience helping owners monetize their businesses while enhancing and preserving their personal wealth. Over the years, Don has advised hundreds of business owners in numerous financial areas and has made it a priority to acquire the knowledge necessary to properly address his clients’ needs. His professional credentials include:

 

  • Certified Exit Planning Specialist (CExP)
  • Masters of Science in Financial Services (MSFS)
  • Accredited Estate Planner (AEP)
  • Chartered Advisor in Philanthropy (CAP)
  • Retirement Income Certified Professional (RICP)
  • Chartered Life Underwriter (CLU)
  • Chartered Financial Consultant (ChFC)

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ACCOUNTING SERVICES
  • Develop cash flow projections and financial impact analysis/modeling for various recommendations
  • Analyze and project income and estate tax consequences of various transfer strategies
  • Perform tax consulting in the areas such as C-to-S conversion, ESOP, CRT, Defined Benefit plans,
    and incentive plans
  • Prepare audit of financial statements and other financial information as needed by buyer
LEGAL COUNSEL
  • Analyze legal issues and implications related to proposed transactions and strategies, including
    state, federal and tax law, and compliance with existing documents
  • Draft legal documents necessary to implement recommended strategies, including Stay Bonus,
    incentive plans, employment agreements, transfer documents, business continuity and estate
    planning documents
  • Create legal entities as needed such as structures for transfers to children
TRANSACTION INTERMEDIARIES
  • Includes investment bankers and business brokers
  • Assist in the development of key financial objectives for the exit
  • Provide financing to help the business grow to an ideal acquisition size and aid in facilitating the owner’s financial exit plan
  • Provide financing to the buyer
  • Assist in the investment of sale proceeds
BUSINESS VALUATION
  • Evaluate appropriate type of valuation
  • Perform valuation and related services
  • Evaluate valuation provision in legal documents
BUSINESS CONSULTANTS
  • Recommend appropriate timing of business valuation based on expected company performance
  • Identify and enhance the key Value Drivers
  • Guide owner toward issues of operational efficiency
  • Assess skill levels of employees
  • Create and implement business plan and related initiatives
  • Advise on pre-sale positioning and preparation
  • Assist in post-sale integration
FINANCIAL PLANNING
  • Develop and implement owner’s personal wealth and estate plan in cooperation with accountant, attorney, and other exit planning advisors
  • Implement tactics and strategies to assist owner with managing sale proceeds, including tax- efficient wealth accumulation for retirement, investment management, retirement income distribution, risk management, and wealth transfer to family and charities
OTHER BUSINESS OWNER SERVICES
  • Executive Compensation Plans
  • Risk Management / Product Sourcing
  • Retirement Plan Administration
  • Health Insurance and Benefits
  • Social Security and Medicare Strategies
  • Corporate Record Services
  • Lending Sources

If you are ready to start planning for your business exit, then give us a call and we will help guide you through the process of cashing out of your business and moving on in style and on your terms.

PHONE: 864.887.4301
EMAIL: INFO@REICHERTCO.COM

MAIN OFFICE:
22 RUSKIN SQUARE | GREENVILLE, SC 29607

BRANCH OFFICE:
217 VINEYARD PARK | SUNSET, SC 29685

Securities offered through Valmark Securities, Inc., Member FINRA, SIPC. Advisory services offered through Valmark Advisers, Inc., a SEC Registered Investment Advisor. 130 Springside Drive, Akron, OH 44333. (800) 765- 5201. The Reichert Company, Inc. is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc.

The Reichert Company