Needed for Every Succession Plan
Regardless of the method used in a succession plan ownership will be transferred to another owner. Needed before any transaction can be planned or consummated is the following:
- An estate plan for the owner
- A financial plan for the owner
- An analysis of the cash flow from the transfer to the owner
- An analysis of the cash flow from the successor and sources of the funds
- Valuation of the business
- Possibly a banker
- Due diligence reviews by successor
- Employee should be represented by an advisor – definitely an attorney and possibly an accountant and valuation specialist
- There should absolutely be a buy-sell agreement with strong restrictive covenants
- Compensation agreement for all owners that work in the business
This list is not a suggestion, it is a must do. Get it done!
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