Rainier Group | BUSINESS TRANSITION SERVICES
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BUSINESS TRANSITION SERVICES

TRANSITION PLANNING

We specialize in helping owners and founders of privately held companies identify, build and implement the best strategy for their situation. Since our founding, we have transitioned close to 1,000 private companies nationwide. The transition of your business can significantly impact your lifestyle, family, employees and community. Our experience and process enables you to determine the best course of action to meet your specific business and financial objectives. We have decades of experience helping business owners navigate the following types of transitions:

 

INTERNAL SALE

An external sale is the obvious selection if your main objective is to maximize value. However, if the non-financial aspects of your business such as legacy, employees or community take precedence over the maximum sale price, you may consider an internal sale and/or gift to family members or a sale to one or more key employees. The risks associated with an internal sale can be complex to navigate, but given enough time, a successful plan can be achieved. Here are a few critical decisions that need to be made to ensure a successful result:

 

Key Decisions:

  • How much do you need from the transaction?
  • How much is fair?
  • How much time is needed to develop and implement a strategy?
  • How will the sale be structured?
  • How will the transaction be financed?
  • What is the tax impact of the transaction?
  • What impact does the transaction have on available cash flow to the business and the new owner(s)?
  • Is the purchaser or purchasing group equipped to run the business when you are gone?
  • Is a Board of Directors or Advisory Group necessary to oversee the company? What is your role on the board?

 

EXTERNAL SALE

Selling your business externally to a 3rd party buyer/investor, more often than not, yields the highest value. It is a common strategy among business owners who are looking to diversify their personal financial risk and those who recognize that “going it alone” is no longer a long-term aspiration. The process of taking your business to market can be stressful and requires careful preparation. Confidentiality is key, especially when competitors are potential buyers. Major factors impacting the value you receive include breadth of potential buyers (the auction pool), general economic landscape and industry specific economic outlook. Here are a few critical decisions that need to be made to ensure a successful result:

 

Key Decisions: 

  • Is my business ready to go to market?
  • When is the right time to go to market?
  • What is my business worth?
  • Should I sell a minority or majority interest in my business?
  • Is it better to sell to a strategic or financial buyer?
  • How much will I need to realize from the sale to ensure my financial security?
  • What are the taxes associated with selling my business?
  • How long does the process take?
  • How can I ensure the process remains confidential?
  • How can I protect my employees?
  • Am I required to stay on after the sale?
  • Would I need to market the business to multiple buyers?

 

RETENTION FOR FAMILY MEMBERS

In many cases, and often the most complex transition is when the family chooses to transfer to the next generation. This type of transition impacts the owner, the business, its employees, family members directly involved in the business and family members who are outside the business. We believe that to achieve a successful transition within the family, all parties need to benefit. The need to balance the objectives of the owner(s) with the needs of the business and other stakeholders is critical. Considering both the challenges and opportunities that are unique from an operational perspective enables the ownership group to create the most beneficial course of action for everyone effected by the transition. Here are a few critical decisions that need to be made to ensure a successful result:

 

Key Decisions:

  • What is my business worth?
  • Should I sell a minority or majority interest to family?
  • How much will I need to realize from the sale to ensure my financial security?
  • How much is fair?
  • How will the sale be structured?
  • What is the most tax efficient way to transfer stock?
  • How much time will I need to allow to ensure the transition is a success?
  • How will the employees handle the transition of ownership?
  • How much time is needed to develop and implement a strategy?
  • Is the purchaser or purchasing group equipped to run the business when I am gone?
  • How do I manage fair but not necessarily equal between compensation and ownership?
  • Is a Board of Directors or Advisory Group necessary to oversee the company?

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