Why a Business Succession Plan?

A comprehensive business succession plan will address management and ownership issues for an owner of a closely held company. Liquidity and diversification are often primary objectives of such owners. To provide liquidity to business owners, there are limited alternatives which include a management buyout, a stock redemption, a third party sale, or sale to an ESOP. A succession plan should consider these alternatives and compare their respective features. Of all the alternatives, an ESOP may provide significant benefits to all parties involved; business owners, employees, and the company.

An ESOP is a flexible tool for achieving multiple business owner objectives, including:

Given its flexibility, an ESOP is highly adaptable for a variety of business owners, each with his own specific business objectives.

An ESOP is unique with its ability to create liquidity in a tax-advantaged manner. Business succession strategies, estate planning, investment diversification, liquidity strategies, and employee incentives can all benefit from the implementation of an ESOP.

Given the volatility and uncertainty in today's financial markets, limited marketability of a closely held business, and the growing number of business owners approaching retirement age, now is an opportune time to determine if an ESOP strategy can work for you.

*ESOP Capital Strategies is a wholly-owned subsidiary of Marshall & Stevens, Inc.

Established in 1932, Marshall & Stevens is a recognized leader in valuation, serving business owners, managers, boards and trusted advisors throughout the world. We assist our clients with planning, due diligence, negotiation and reporting issues related to their mergers, acquisitions, divestitures, financings, insurance placement and tax related transactions. Our in-house specialists provide a full complement of valuation-related services, from transaction advisory and opinion letters to the valuation of businesses and business assets, both tangible and intangible.