Are You Building A Legacy? Consider Your Options. PartIII.

OK, you have decided that you want your business to be a legacy business. You have created a vision of what you want your life to look like after you step down, completely or not. You have a picture of the extent of your involvement in the business, from none to some to very active. You have a good idea about how and where you want to spend your life outside of any level of work. You have developed a financial plan for what you will need to support that work and life. And you have to set out the financial and strategic milestones to measure your progress along the way. No matter what your vision is, you are working to make the company so valuable, that you can become flexible about when you implement your plan. Before we talk about your first option, make sure you understand that all of these options involve time and thought. None of them can happen overnight.

Your second option is to sell to your employees. One of the most advantageous ways to do this is to do an ESOP, an Employee Stock Ownership Plan. It is a great strategy but a very complex one. There are tax advantages to it and there is considerable expense involved in setting it up and maintaining it. One of the advantages to the company owners is that they can do a partial cash out and then do the rest later on. You must start with a minimum sale of 30% to the ESOP. One of the leading sources of information and support in investigating and completing an ESOP or any kind of employee ownership plan is The Beyster Institute, affiliated with the Rady School of Business at the University of California San DiegoThe institute is named after Robert Beyster, founder of SAIC, which at one time was the world’s largest employee-owned company.

You can read more in this series here for Part I and here for Part II.