CHASE LAW NAVIGATOR

imageedit_1_3140372419.png

BUSINESS CONTINUITY

Choosing to sell, transfer, or close your business requires a lot of important decisions and actions. Read the information below for various resources.

CLOSING UP SHOP

How do I begin the process of closing my business?


Closing a business is a very difficult decision. It may not be the only option. Selling may be an option as well. The SBA provides counceling tools for small businesses going through the decision making process of potentially closing a small business: https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business




What  will I do after I close my business?


If you don't know what you will do once you stop being a business owner, you may consider training in a skill. Every state has resources for retraining skills, as well as apprentice programs. Also, you might be a great candidate to manage someone else's business. Learn more here: https://www.doleta.gov/programs/factsht/WARN_Fact_Sheet_updated_03.06.2019.pdf https://education.ky.gov/CTE/cter/Pages/TRACK.aspx https://educationcabinet.ky.gov/Initiatives/apprenticeship/Pages/default.aspx





EMPLOYEE OWNERSHIP

How can I attract the best talent to my business?


Sometimes businesses do not have enough money to pay the real senior talent they need to get their business where it needs to be. One way the business owner can attract these special employees, is to offer them equity as part of their compensation. Some employees will find the offer enticing, and it will allow the entrepreneur to hold on to great talent, while only paying what they are deserved on an equity basis. Learn more here: https://www.inc.com/magazine/201310/justin-caldbeck/use-equity-to-hire-top-talent.html




Should I give employees part of my business?


Whether and how much equity to give an employee is a very important consideration and a decision that should not be taken lightly. It will also be important to have binding documents that explain the agreement and plan for if things go south. Having attorneys will be ideal in this type of situation. Learn more here: https://www.nceo.org/articles/employee-ownership-very-small-businesses




How can I exit my business by giving control over to my employees?


An Employee Stock Ownership Plan (ESOP) is one way to maintain business continuity, preserve your legacy, increase employee engagement, and receive favorable tax treatment. Learn more here: https://whosonthemove.com/transferring-the-ownership-of-your-business-as-you-approach-retirement-an-esop-may-be-the-answer/





EXIT STRATEGIES

Is it important for all businesses to have an exit strategy and what are some of the options for exiting?


It is important that business owners think about an exit strategy. In the middle of growing, many business owners will not be thinking about the exit. Their focus is on growth. There are many ways to exit including selling the company, doing an initial public offering (IPO), mergers and acquisitions, draining the company, and more. Potential buyers and investors are going to want to know what the exit strategy of the company is, as well as its motivations in the long run. How a company exits may be very industry dependent and an attorney can do research to figure out what the best path is for the business owners' personalities and in the industry standards combined. Learn more here: https://www.entrepreneur.com/article/78512




How will my business be valued upon sale?


There are many methods to value a business. Which one makes the most sense for your business will depend on the industry. It is probably best to get a third party broker to value the business for you. Additionally, sometimes the value of the business is what the buyer is willing to pay! Learn more here: https://www.fundera.com/blog/business-valuation-methods





MERGERS & ACQUISITIONS

Is it important for all businesses to have an exit strategy and what are some of the options for exiting?


It is important that business owners think about an exit strategy. In the middle of growing, many business owners will not be thinking about the exit. Their focus is on growth. There are many ways to exit including selling the company, doing an initial public offering (IPO), mergers and acquisitions, draining the company, and more. Potential buyers and investors are going to want to know what the exit strategy of the company is, as well as its motivations in the long run. How a company exits may be very industry dependent and an attorney can do research to figure out what the best path is for the business owners' personalities and in the industry standards combined. Learn more here: https://www.entrepreneur.com/article/78512




How will my business be valued upon sale?


There are many methods to value a business. Which one makes the most sense for your business will depend on the industry. It is probably best to get a third party broker to value the business for you. Additionally, sometimes the value of the business is what the buyer is willing to pay! Learn more here: https://www.fundera.com/blog/business-valuation-methods