Essential Resources for Restructuring a Business
Over time, businesses need to change form for a variety of reasons. The most common transition that we are asked about involves selling a business to employees or other key stakeholders. In fact, the current owners of 66% of all businesses are set to retire within the the next ten years, and we will see the greatest transfer of business ownership and wealth in human history. If you, too, want to restructure your business and think shared or employee ownership is a viable option, you will want to consider these questions:
- What is your current structure?
- Why do you want to restructure (that is, what problem(s) need to be solved)?
- What is your timeframe?
- Does the business have capable and experienced management?
- Are the business financials stable?
- Can the business tolerate a short-term dip in profitability? This is not uncommon right after a shared ownership restructuring.
- What are the business’ growth plans, and on what timeline?
- Do you have an approximate value in mind for the business?
- How flexible are you in terms of seller-financing part or all of the business sale?
- Is it important for you to leave a positive legacy by keeping the business operating and preserving jobs?
- Do you have loyal and long-term employees?
Legal and Tax implications
When you restructure your business, there are many options and alternative conversion approaches. Additionally, there are important legal and tax considerations. We have advised on several successful and complex employee and stakeholder ownership conversions.
Let us help you decode and clarify the process.