COVENANT BUSINESS PLANNING SOLUTIONS

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Business Owners Need to Act

A sense of urgency necessary to cause an owner to take immediate action occurs only when the owner realizes how long it will take to successfully exit.
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Transferring Your Business to Your Key Employees Part V

Ways to transfer your business to your key employees
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Transferring Your Business to Your Key Employees Part IV

Ways to transfer your business to your key employees
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Transferring Your Business to Your Key Employees Part III

Ways to transfer your business to your key employees
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Transferring Your Business to Your Key Employees Part II

Ways to transfer your business to your key employees
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Transferring Your Business to Your Key Employees Part I

Ways to transfer your business to your key employees
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Building a Team to Assist Your Exit

When you’re ready to start planning your exit, you need a qualified team to assist you. It’s best to start building that team well in advance of your exit.
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Other Exit Options

There are several options which might be considered by business owners developing a strategy for exit.
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Initial Public Offering (IPO)

Is an IPO the best offer for your business’s future?
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Family Values

So, now that you are looking ahead to exiting your business and beginning your own retirement, how viable is the option of passing your business down to your children?
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Steps to a Successful Business Exit

It’s important to exit your business as thoughtfully and carefully as you began. These three steps are critical to your personal and financial future.
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What is Business Exit Planning?

Some exit strategies allow you to exit in terms of your personal involvement with the business; some allow you to exit in the financial sense; some allow you to exit in both senses.
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Ways to Exit Your Business

There are eight ways to exit your business.
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Exiting a Business

You’ve reached that point in life when retirement is looming ahead and you are wondering when the right time is to exit your business. But determining when to exit is not an easy decision to make.
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Key Employees Part 2: Incentive Planning

Before they can sell or exit their businesses with financial security, most owners need to grow their company’s cash flow and transferable value significantly. Without management leading the charge, this is an almost difficult task in today’s economy.
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Key Employees Part 1: Value

there isn’t one easy method for determining the value of a key employee. Business owners customarily use one of three methods to estimate the worth of an employee to their company.
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Key Employees: Replacing the Irreplaceable

Your key employees are valuable assets of your company. Like other tangible assets, your business needs to be protected against the loss of their services
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Exit Option 8: Liquidation

Liquidation offers the two benefits most important to the owner in that position: speed and cash. Not surprisingly, the disadvantages to this exit route are numerous.
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Exit Option 7: Assume Passive Ownership

Owners feel they are at less risk keeping their businesses than selling them when a third-party buyer makes a major part of the purchase price subject to a promissory note or some type of “earn-out.”
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Exit Option Six: Create an IPO

The exit route marked ‘IPO’ or Initial Public Offering occurs very rarely but attracts the attention of business owners amenable to a sale to a third party for two reasons:
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Exit Option Five: Sell to a Third Party

Owners of larger companies who sell to third parties are best positioned to receive the maximum amount of cash at closing.
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Exit Option Four: Sell to Co-Owners

An owner who examines a sale to a co-owner (or multiple co-owners) might find the list of advantages and disadvantages nearly identical to those on the lists for a transfer to family member or key employees.
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Exit Option Three: Transfer to Employees via ESOP

ESOPs appeal to owners who wish to transfer their companies to known entities, perpetuate their companies’ mission or culture and keep their companies in their communities.
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Exit Option Two: Sell to Key Employees

In terms of advantages and disadvantages, the sale to key employees is remarkably similar to the transfer to family members. So similar are the two paths that if you substitute ‘key employee’ for ‘family member’, the advantage/disadvantage lists are the same.
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Exit Option One: Transfer to Family Members

The major disadvantage to a transfer to family members is the owner’s heightened exposure to financial risk. I
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How to Choose an Exit Plan

Start thinking about your exit before you are ready to exit. Owners who give themselves time to plan provide themselves the greatest number of exit path options.
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Exit Routes for Business Owners

When business owners begin to think about exiting their companies, the number of possible exit routes can seem limitless but in fact, there are only eight:.
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Transfering Wealth to Children: A Primer for Business Owners

Once owners establish their financial exit objective, they can answer the universal questions above and design a transfer mechanism that will pass the wealth to the children with minimal tax impact.
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It Takes Years to Build a Business

Those same traits that created your business success will also help you determine the right course of succession when you are ready to retire. Covenant Consulting Group is here to help you assess each disposition option and make the right choice for you, your business and the next generation.
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The Next Generation

As a business owner, you understand the importance of having qualified, dedicated employees. Attracting and retaining the best employees with the necessary skills is a challenge that all business owner’s face in today’s competitive environment.
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Why You Should Have a Business Valuation

Covenant Consulting provides a number of resources available to the business community including helping you determine your business’s valuation. Since your time is your most valuable resource, we will provide a very prompt and accurate valuation of your business through BizEquity.
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Buy Income and Invest the Difference

Today’s retiring business owner may have many fears about the future. Is there a willing and able buyer ready to step in and purchase my business? Will the business sell for what it’s worth or what I think I should receive? Will the new owner fail and I end up with the business in less than optimum condition?
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Valuation Methods for Your Business

There is no one correct way to value a business. Facts and circumstances affect valuation, and for many owners, the best way to value their business is the result of combining several or more methods. Even the IRS has maintained that no fixed formula is universally applicable.
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What is Your Business Worth?

Valuation of a business is both an art and a science. It is an attempt to determine what is known as fair market value, or the value that a buyer and seller agree upon through an arms-length transaction with neither being compelled to act and both having knowledge of the relevant facts.
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A Business Owner’s Greatest Expense

Your business deals with ongoing income and sales tax, of course. And when you eventually exit your business, you’ll be facing capital gains tax and some very successful business owners also have to pay estate taxes.
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Taxes… What are they good for?

We can’t always agree the way tax money is spent on various programs or policies. But we all agree that taxes can be a burden and reducing them legitimately is a great option for many business owners.
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Grantor Retired Annuity Trusts

A GRAT is but one of many tools that a lot of clever minds—legal tax and insurance—have created to produce or eliminate estate tax. When these estate planning concepts and tools are combined with lifetime exit planning concepts and tools they work to achieve an owner’ s lifetime and estate planning objectives
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Tools to Minimize Estate and Gift Tax Consequences

Using leverage to move the earth (or to move your wealth) is the key to achieving noteworthy results. As we have discussed in this ongoing blog series, each U.S. resident can give away, during their lifetime, $5 million as well as the current annual gift exclusion.
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Your New 'Employee'?

Being a conscientious business owner, you’re always on the lookout for the perfect employee. Managing expenses and ultimately your bottom is also foremost on your agenda.
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Passing Wealth to your Spouse or Children

There is one additional planning consideration we should mention. Under current estate tax law one spouse can leave assets at his/her death to the other spouse without estate tax consequences. For most estates, taxes are assessed only at the death of the surviving spouse.
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Trusts – Your Child’s Inheritance

Imagination is the only limit on the variety of restrictions parents can place upon a child’s right to receive money. Keep in mind, however, that someone—the Trustee—needs to interpret, administer, invest, and make distributions according to the provisions of a trust.
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How Much is Too Much Wealth to Pass to Your Children

When wrestling with this question of “how much is too much,” remember that your children need not receive money outright. Rarely are large amounts of wealth transferred to children freely or outright. Instead, access to wealth is restricted through the use of family limited partnerships (or limited liability companies) and the use of trusts.
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Leaving Your Wealth to Your Children

The primary decision any parent makes when transferring wealth to children is not how to accomplish the transfer, (that’s the estate planning attorney’s job) but rather how much wealth to transfer to children. 
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Thinking of Retiring

Now might be the best time to consider selling your business, especially if you’re approaching retirement age. In recent months, media and professional service firms have been buzzing about the benefits of such strategies.
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Perfect Timing

Planning for retirement is a daunting proposition for anyone. Business owners and highly compensated executives face the additional challenges of high income tax rates and limits on the amounts that can be deferred or contributed into qualified retirement plans.  These factors can restrict their ability to accumulate money for retirement on a tax-favored basis. They also might contribute to when the timing is right for retirement.Retirement will only come once in your life.
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YOUR MOST IMPORTANT RESOURCE

Covenant Consulting Group offers a number of valuable resources to their business clients. We feel that business owners should take advantage of any and all resources available to them.
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YOUR HIDDEN PARTNER

Imagine you own a business with a partner. You own 40% and your partner owns 60%, but they can increase their share at any time!
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FAMILY BUSINESS TRANSFERS: A HAZARDOUS EXIT PATH

Some owners are fortunate enough to enjoy financial security independent of the business. Typically, this occurs when, over years, an owner invests excess earnings outside of the business. Some owners can reach financial security by leasing personally-owned assets back to the business for its use. These assets usually consist of equipment or office, warehouse or manufacturing facilities used in the business. Keeping ownership of these types of assets outside the business and its transfer:
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College Education Funding

There’s always a great debate on the best methods for funding your child’s higher education. Parents want their children to succeed and often, they believe that getting their kid into a premier college is the answer. Parents, as we’ve seen from recent headlines, are not above going to extreme measures to guarantee placement for their collegiate.
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