b'Five Pillars of Exit Planning j. KevinKennedy IIy an agreement with two other owners to sell our1. If you don\'t have ato, then plan to fail., nsignedplan2003, ZOO-emplo ee company to five new owners via abuy- There are many moving partsjuggle to exit your J;msiness monetize management out structured over 10 years. Ithe last owner to leave the companyyourand replace yourself. Most owners are confused by waswealth,the at the end of 2008.new team was well prepared for thebe fragmented,infonnation they hear from their accountants, Thetransitiondislocated cause they were eager to have their day in the sun and had virtually ex valuators, bu advisors, tax attorneys, lawyers,planne and sinessestaters, ceeded all of our expectations while they navigated the company throughinsurance advisers. the economic headwinds of 2009-2011 and into 2012 with aper My past company\'s team of6earsmore than strongowners investedy and formance.$250,000 for fragmented advice and offerings as we wandered down the Until Iaof exit planning, I never realized how fewexitwith two offers from industrythat were consolidating becamestudentpathroll-ups companies actuallythe 1benchmark of becoming aourand two offers from boutique private equity firms that wanted reach%fourth space generation company. Our company had passed several critical mile to invest in our company. In addition,investigated an employee we cluboneleftmanagement stones to enter into the specialof"percenters." When Iinstock ownership program and used abuyout to transfer 2008,successfully transferred our 62-year old companytothe fourththe stock of three owners to five new owners. we generation of managers, which put us into that elite club. According toDon\'t lull yourself into thinking this is easy. The sooner you plan, aby the Family Finn Institute, theof athe better the odds that you will align allthe moving parts and have study doneoddsprivate businessof achieving this are slim. Here is the math:the flexibility of aligning your associates, personal savings,taxand70% fail to make it into the second generationefficient strategies to leverage your exit.90% fail to make it into the third generation2. Begin with your goals. So abusiness has achance of making it to the third private3%Take time to analyze your financial and personal goals. Studies indicate generation, and the odds of making it intofourth generation are themost business owners have 70% of theirtrapped in their busiless than 1%.wealth ness.you do not have ato replace that income and liquidate the There isenough room for metogo into our entire story, butIfplan notstock, you will stay trapped in y business. You need tothe allow me to share five things you shouldabout this exiting suc ourdetermine knowvalue ofand your outside savings (liquid and illiq d), cession process.your companyuiand see ifat amount can generate the income needed to support th your ".- Outside Retire lrafer Methods .J.,l. ESOPsC sGlfts~/Sell~MooConooli;l.at:eIPO RT RussianOne-St~ M!30sCRAT SelNsrou!ett: 19nvat R -upsDPO se0flMB!s( RUT AnAuinesBuy&-bu1tdReverse Nl.er-ger sDutchaucti0n OptionsCLT GRATsGoing p(JVate sauctionTwo-StepRecaps PhantomCLATsFlPsR t ofpublic ighSARsCLUTsIDGTs1,trefusalauction Engineered Intra-transfersProcess Inter-Tran 12www.mrca.org- Midwest Roofer'