= RequiredThank you for your interest in our Ownership Planning Workshop. You will be contacted with the date, time and location of the next workshop when it is scheduled. We hope to see you there.
Few certainties in life
- Death
- Taxes
- Exiting your business
- On your terms… or
- On someone else’s terms
Our clients are business owners of closely held and family businesses with revenues between $2MM and $100MM. A typical owner engaged in Ownership Planning™ is from the Baby Boomer generation, and is concerned with meeting their retirement goals, anxious about taxes, and unsure how to continue the business legacy without them. It is estimated that nearly 90% of the net worth of most owners in this marketplace is tied up in their illiquid business.
Some Ownership Planning Statistics
- 14 million privately held businesses in the US (Dun & Bradstreet)
- 63% of the owners are 40+ years old (US Census)
- 50% of these businesses will transition ownership in the next 10 to 20 years (retirement of the baby boomer generation)
- Average revenue: $3MM (US Census)
- Average market value: $1.5MM (Pratt’s Stats)
- 80% of businesses for sale with revenues < $10MM do not sell
- The Federal Reserve has reported that U.S. families have approximately $5.7 trillion in net worth tied up in private businesses
- According to the U.S. Small Business Administration, “At any given time, 40 percent of U.S. business are facing the transfer of ownership issue”
- With nearly 7 million businesses looking to transfer ownership in the next 10 to 20 years, the landscape will be a buyer’s market
- These companies have an estimated market value of $6 trillion
- This will be the largest generational transfer of wealth to ever occur
- Nearly 90% of the owners of closely held companies in the lower mid-market have no exit strategy, leaving them vulnerable to losing thousands or millions in the sale of their company
Ownership Planning™
The shocking news to most business owners is this: the only reason to get into business is to get out!
What does this mean? It means making a paradigm shift from seeing your business as a job, to seeing your business as an investment, recognizing its True-North value. We all know that the way you make money in investments is through dividends and capital appreciation. It is no different for your business.
Compass Point offers Ownership Planning™ – a unique process within our strategy…growth…exit model –– where we move beyond the traditional business-consulting model of offering advice and assistance in a specific functional area to one where the focus is on the owner. The goal is to protect, preserve, and promote the wealth you have tied up in the illiquid business, and create a strategy to get that wealth out on the your terms.
Ownership Planning brings all your business advisors together to build a plan that focuses on your business-legacy goals and protecting your wealth tied up in the business. This collaboration delivers exceptional value when compared to the situation where advisors work independently in their own silo.
Together, we establish the vision for how you can let go of the business and create shareholder wealth. Our process shows numerous ways to do this besides holding on to the business with a death grip until you die. By successfully navigating industry and market trends, we help you determine if:
- it is appropriate to transition out of the business before it begins to decline
- the business should acquire complementary businesses to grow
- the business should follow a partial liquidity strategy in order to ‘some chips off the table’ and protect hard earned value
- the business should merge or be acquired by a larger company that provides access to a larger market opportunity
Which strategy or strategies to implement depends on the owner’s goals. Our process helps to navigate through these complicated issues and decisions.
As the owner, getting out of business on your terms is much more difficult than starting and getting into the business. This is your baby, and one of the first steps in our process is helping to mentally prepare you for ‘life after business’. Financial readiness also plays an important role in choosing the proper exit strategy.
The cost of not planning
- Underperforming company (lower revenue, profits, and cash flow)
- Undervalued company
- Unable to control the exit
- Net worth stays tied up in the business
- Pay too much in capital gains, income, and estate taxes
- Risk retirement lifestyle
- Leave headaches to family members to solve
- 75% of former business owners regret selling their business because it did not accomplish their personal or business objectives. (Christman Group, Chicago)
- Owners admit that they did not understand all of their options, were not able to make informed decisions, and did not know to whom to turn to for answers
Experts agree that the one of the best ways to create wealth in the US is by owning a business. But owning a business doesn’t guarantee wealth. Building a business that has value that someone, whether an insider or an outside third party, is willing to pay for, and minimizing taxes is how you create wealth. Creating value in a company is not an event, it is a process.
Let our Ownership Planning™ process go to work for you, and start sleeping better at night.
Join Us At Our Quarterly Workshop:
The Road to Unlocking the Wealth in Your Business Workshop
This seminar brings together a complete Ownership Planning team to address some of the key points you need to consider in how to plan for leaving your business in style. We will discuss such topics as building a business legacy, developing a roadmap to convert your business value to cash, exit options, minimizing taxes, contingency planning, the role of the estate plan, life after the business and more.
> Register for our free quarterly workshop to learn more!