How Can Beacon Exit Planning Help You?
Our goal is to transfer your business and monetize your trapped wealth. We provide several customized programs and plans:
Written Exit Plan
Beacon’s customized written exit plan is the sequential multi step individualized report designed to protect your wealth. Our proprietary systematic program will examine all of your options, values, and will then be reviewed by our team to create your personalized plan. The process outlines all of the information needed to execute the exit process.
Our exit plan provides owners with a clear path to make an informed decision, control the process, and leave the business on their own terms. Owners gain control of the transfer process, moving the business to whom they wish to transfer, when they want to exit. The information our plans provides can liberate owners by moving trapped money out of their business, protecting their wealth, and guiding owners into their next life stage. This is a powerful process that moves owners toward financial independence and protects their legacy.
Exit Planning Six-Step Process
Beacon’s exiting plan provides a step-by-step process that help:
- Set exit goals
- Determine if there is a financial gap to worry about
- Plan the right time to leave
- Identify what type of exiting owner you are
- Illustrate exit options
- Measure the “range of values” for each business
- Assemble an advisory team
- Understand how taxes, deal structuring, and legal agreements will impact the exit
- Establish a customized plan for the exit that protects hard-earned wealth
This exit strategy is not the same as the sale of a business. Beacon’s exit plan helps owners understand the difference. We offer a process that begins with examining personal readiness for an exit and ways to protect wealth, through building and executing a customized exit strategy. Easy to follow and essential for every business owner, we insist on this reading and follow the path of john Leonetti, trusted advisor and author of, “Exiting Your Business, Protecting Your Wealth.”
Written Succession Plan
Continuous Succession® planning focuses on “human” capital with management and associates. You need to develop a written plan with open communication, trust, and a total commitment to the success and future direction of the company. Succesion is the ongoing process of identifying and developing associates to prepare them for advancement through training, mentoring, and stretching their responsibilities. This is a continuous process of education and development to understand the company’s systems and culture with a focus of growing management and creating leadership.
If you intend to exit your business it will require two things:
1. The business must have sustainable earnings.
2. The business must be able to perform without you.
To prepare your business for sale it makes sense to improve your bottom line performance that will increase the value of your business, improve your efficiencies, productivity, and profitability.
Beacon Exit Planning offers management consulting to advise owners in creating and improving operational management systems, financial systems and marketing systems. Our experiences are based on philosophies of Total Quality Management, W. Edwards Deming, and Michael Gerber. The objective is to create business systems that define requirements, organize and measure your people, money, management, operations, in a systematic manner so you are working “on your business” instead of “in you business”. You need systems that your associate can understand, provide measurable consistent results and support your goals.
In Michael Gerber’s E-Myth series he empathies this critical concept:
“The value of the Equity is directly proportional to how well your business works. And how well your business works is directly proportional to the effectiveness of the ‘systems’ you have put in place, upon which the operation of your business depends.”
Our focus is to build a company that can run on systems. Michael Gerber describes this as “working on your business” and creating a franchise model for your operations. Your goal is to create a turnkey operation that delivers measurable consistent results no matter who is managing the business. In this business, “systems” run the business and people run the systems.
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It is important to understand that there are three parties to every transaction; the buyer, the seller and Uncle Sam. The key concern that every business owner has is, “How much will I have to pay in taxes when I transfer this business?”
With effective tax rates as high as 50% in some instances, the proper structure of a business transfer can have a significant effect on the seller’s ability to meet the post-exit lifestyle goals. In addition, considering today’s economic environment, increasing taxes will be a major revenue producing strategy for government agencies which will only make tax planning that much more critical.
Taxation is also important when considering risk management for a business owner. Insurance and asset insulation strategies can be implemented concurrently with the exit strategy in order to mitigate the risks found in privately held businesses. A review of these products and strategies by a tax professional that is familiar with your exit plan is important to ensure that proper treatment is applied.
At Beacon Exit Planning, LLC our COO Joe Bazzano is a Certified Public Accountants with over 25 years of experience dealing with privately held business and transition related transactions. We work directly with the business owners or their current tax advisors in order to obtain the best possible results for our clients. Remember, it’s not what you get it’s what you keep that of utmost importance.
Taxation services include analysis and tax saving techniques in the following areas:
- Business purchase and sales price allocations
- Partial business transitions
- Gifting business interests
- Management buyouts
- Risk management techniques
- Buy/Sell agreements
Business Valuation Services
Your company has value. Unfortunately, as a privately held company value is not readily attainable from the business section of the local newspaper or the internet. To complicate matters, your company can have different values associated with it based on the exit strategy you choose. In order to determine if your exit goals can be achieved you will need to know the relevant value of your business based on the strategy you wish to implement.
Whether you’re looking to determine the value of your company so you can sell it or if you want to take advantage of applicable discounts and transfer your business to a family member or trust our specialized knowledge in tax and valuation services affords us the ability to implement the appropriate valuation method in order to meet your exit strategy goals.
Beacon Exit Planning, LLC provides valuation services to meet the following needs:
- Sale of Business Interest
- Estate and Gift Strategies
- Risk Management Techniques
- Owner Buy/Sell Agreements
What happens if a legal claim exceeds your insurance coverage, or even worse, isn’t insurable? Could you be held legally responsible for acts of your employees, children, and guests? Do typical business owners understand under what circumstances a court may redistribute their wealth to others involuntarily? Divorce, business disputes, family disputes, predatory litigation, personal liability and dozens more clog the courts every day. Nearly 35 million lawsuits are filed each year in the United States, or approximately 95% of the world’s lawsuits. Nearly half of those lawsuits were regarded as “frivolous” meaning they had little merit based on the facts themselves. Regardless of the merits of the case, these judgments across the country summed to over $200 billion in awards last year alone.
Twenty five percent of all US businesses have an active litigation ongoing at any given time. It is possible for a single jury verdict award to destroy any family’s financial security for alleged events they may not have directly participated in, or even knew about.
Proactive Asset Insulation is the purposeful structuring of asset ownership to limit liability exposure, make assets difficult to attachment, and segregate risk. Often, techniques are used in combination to enhance protection and benefits. A creditor may place a lien on assets owned personally, jointly, through partnership or corporation. Statutes governing preferred entities preclude a lien on entity assets for claims against the owner. Thus, achieving asset protection involves using entities that have insulative characteristics such as limited liability companies, limited partnerships, some trusts, then separating assets more likely to generate a liability to the owner. Segregation of risk involves separating assets that may generate a liability into distinct containers to prevent an asset being targeted by litigation from impacting other assets.
If you’d like to learn more about how you can integrate asset protection into your planning needs and protect yourself from creditors and predatory lawsuits please feel free to contact us.