GROWTH. TRANSFER. LEGACY.
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Your professional team is the fourth component of exit planning preparation. We’ve already discussed valuation, distance to goal and classes of buyers. Taken together, these basics aren’t enough by themselves to execute an exit plan, but understanding the first three and assembling the fourth will go a long way to ensuring that any plan you develop is practical and achievable.
Many clients say “No problem. I already have a lawyer and an accountant.” But your professional team should be able to offer more than just technical advice.
Any competent CPA can tell you what the difference is between ordinary income tax and capital gains. Far fewer can suggest ways to structure transactions so you move income from one tax category to another.
Similarly, most business attorneys can write (or download!) a purchase agreement. Picking a reasonable path through another attorney’s demands for every representation, warranty and indemnification imaginable is another matter.
There are two tiers of necessity when it comes to team members. On the first tier are those without whom you cannot do a transaction.
(Suffice to say that your real estate attorney/escrow agent, estate planning attorney or slip-and-fall litigation defender is probably not the guy.)
The process manager might be an exit planner, a business coach, a consultant, the attorney, the accountant, or anyone else you trust. He or she must acknowledge the responsibility for coordinating the deal and driving it forward. That includes holding you accountable when necessary!
The balance of the team may include some or all of those listed here.
This list probably has you visualizing dollar signs with wings, but I’ve worked on multiple cases in the last few months where a good advisor saved an owner hundreds of thousands of dollars.
You wouldn’t choose your high school football team to play Alabama for the NCAA national championship. Nor would you expect ‘Bama to beat the Patriots in the Super Bowl. Selling your business is the championship game of your business career. Why wouldn’t you want the best professional team available?
Reprinted from my exit planning blog, Awake at 2 o'clock?
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