Business Succession / Exit Planning Solution

All business owners at some point, either through planning or lack of planning, will exit their business. Baldwin & Clarke’s Exit Planning Solutions employs the Seven Step Exit Planning Process TM to help business owners take control of the exit planning process and create a plan of their choice.


 The Seven Steps:

1Step One: Your Exit Objectives. Each business owner’s unique objectives drive the creation of his or her Exit Plan. Step One establishes and tests your objectives so that your Exit Plan works to achieve your goals. Your key objectives are:

1) your desired departure date

2) the value that you want or need from the business

3) the individuals or entities to whom you want to sell/transfer your business.

2Step Two: Your business and personal financial resources. The starting point for reaching your exit objectives begin here: How much is your business worth today? How much cash flow does it currently generate? How much income do your non-business assets produce? We then project future cash flow, as well as the future value of your business and non-business assets. Most importantly, the combination of Steps One and Two tells us the extent of value or cash flow increase that is necessary to meet your goals.

3Step Three: Build and Preserve Value. Based on the first two steps, we make specific recommendations to help grow business value, protect existing value from the actions of others, and preserve company value by minimizing income taxes.

Possible Recommendations to build and preserve value:

  • Management Team Development Plan
  • Plan to Transition Management Responsibility
  • Employee Compensation Review and Analysis
  • Qualified Retirement Plan Changes
  • Key Person Insurance Planning
  • Key Employee Incentive Compensation Plan (Stock Bonus Plan, Phantom Stock Plan, Stock Appreciation Rights, Non-qualified Deferred Compensation Plan, Cash Bonus Plan)
  • Separation of Business Assets from Business Operations
  • Covenant Not to Compete

4Step Four:  Selling your company to a Third Party. If you choose to sell your company to a third party, we design strategies to improve the likelihood of a successful sale, minimize taxes you will pay upon sale, and maximize your sale price and terms. If you choose instead to retain ownership or transfer the company to insiders, you will skip this step.

Possible Recommendations to prepare for a sale:

  • Begin Pre-sale Due Diligence
  • Reduce Company Debt
  • Consider Various Tax Planning Strategies
  • Identify Potential Buyers
  • Create Stay Bonus Plan for Employees
  • Consider Options for Business Real Estate

5Step Five: Transferring your ownership to insiders. Insiders are children, co-owners, or key employees who often do not have the financial resources to pay owners what their companies are worth. If you choose to transfer your company to insiders, we create a detailed plan to ensure that you receive the money you desire from your business, minimize the risk of non-payment and ensure that you retain control of the business until you have been fully paid.

Possible Recommendations to transfer your business to insiders:

  • Ownership Skills Development Plan
  • Non-Qualified Deferred Compensation Plan
  • Sale of Ownership interest (using cash, a note, or bank financing)
  • GRAT (Grantor Retained Annuity Trust)
  • Bonus Ownership Interest
  • Buy-back Agreement for Minority Owner
  • Gift of Ownership Interest

6Step Six: Business Continuity. As a part of your Exit Plan, we coordinate your business continuity planning with your lifetime objectives. The purpose is to ensure that your goals (such as transferring the company to the successor of your choice and having your family receive full value for your ownership) are met whether you survive to see your business exit or not.

Possible Recommendations to ensure business continuity:

  • Business Insurance of Continuity Planning
  • Wage (salary) continuation plan
  • Stay Bonus Plan
  • Retaining key employees after death or disability
  • Business continuity guidelines
  • Plan for financial independence of the company
  • Buy-sell (shareholder) agreement

7Step Seven: Personal Wealth and Estate Planning. We coordinate your estate plan with your step one objectives. Our design emphasizes tax efficiency (in the transfer of wealth or of the business to family members or charity) and ensures that your family receives the amount of annual income necessary to satisfy the financial security goal you set in step one.

Possible Recommendations for personal wealth and estate planning:

  • Existing and Recommended Estate Planning Documents
  • Personal Wealth Management Plan
  • Personal Asset Protection Planning
  • Allocation of Business Cash Flow after death
  • Personal and family insurance
  • Bequests to key employees upon owner’s death
  • Transfers of specific non-business assets
  • Transfer of business real estate upon death