One would be hard-pressed to find a more emotional, intimate and exhilarating time than the moment when an entrepreneur decides to sell his or her business. The name on the building – and the products and services that stream out the door – represent years of ideation, iteration, toil, blood, sweat, tears, hard work and a journey that seems to know no bounds.
At Oxford, part of our uniqueness lies in our understanding of these feelings, not only as we work closely with family offices and clients to create and protect wealth, but also as we make our way along our own journey as owner/partners here at Oxford.
As the biggest asset on a client’s balance sheet, the business represents the “nest egg” for many entrepreneurs. As such, getting the right price, and planning ahead for the next chapter, are not seat-of-the-pants considerations but ones that require a substantial amount of planning, detail, study and preparation.
Our Pre-Exit Planning services are designed to account for both the emotional and process-driven aspects of a business transition. It involves the coordination of a team of experts supplementing our advisors at Oxford with other professionals who have an advisory stake in the client’s business transition.
We also involve experts who can help the client navigate their post-sale personal financial situation, helping ensure that the net proceeds will be adequate to provide for themselves and their families, and to fund any “next-chapter” activities that might come to pass.
We tend to look at Pre-Exit Planning in three stages, or buckets:
I. The Personal Side: How do you manage the stress associated with the sale process? What’s your life going to look like, personally, after the sale? Can you fund the type of lifestyle that will make you comfortable? Will you be able to fulfill your philanthropic goals? Do you have adequate resources for family gifting?
II. The Professional Side: Will you maintain a role in the existing business, or will you exit fully? Can you invest in other businesses as a means of fulfilling your entrepreneurial spirit?
III. The Tax Ramifications: What effect will the sale have on your personal cash flow? Can you do things now to mitigate your income taxes or estate taxes that could potentially result from the sale?
As you can see, the sale of a business isn’t just an ending but also the beginning of a new phase. At Oxford, we realize this can be as much psychological as pragmatic, and it is our hope to be a partner in managing both, to secure the family legacy and ease the transition.