Often ignored by business owners until it is too late to make effective changes, an exit strategy can help shape the value of the business, or be used as a foundation for a succession plan. Whether you are planning to retire in two years or twenty years, a written exit strategy will identify areas of improvement to make, and elements of the business that would benefit from process improvements.
Business owners who plan with an exit strategy and put improvements in place to achieve that exit strategy will command a higher price in the marketplace when the time is right to sell. KHA can begin working with you to develop a cost-effective exit strategy for your organization.
KHA works closely with several business valuation firms. A business valuation is used to determine a fair, objective price for any business or asset, based on the current condition of the item being valued in the present economic marketplace. The overall value can be influenced by conditions not under the control of the buyer or seller. Most of our clients use a valuation to determine the potential sale price of a company, set insurance levels, update or fund a buy/sell agreement, settle divorce or estate proceedings, for litigation purposes, or to buy out a partnership. The results of the valuation can be used for tax and estate planning, gifting, or to develop a plan to increase the value of the business.
To protect the owner and their heirs, a buy/sell agreement is vital to the long-term health of a business. A buy/sell agreement establishes a clear set of rules to follow in the event of an involuntary termination or sale of an interest. Whatever causes the business to sever, the remaining parties need to have financial and legal protection of their interests. The spouse of an owner may need to be bought out. An updated buy/sell agreement, backed by a current business valuation, and funded by life insurance, will ensure that the surviving owner can still operate the business without incurring an overwhelming debt load. KHA is experienced in working with legal counsel to develop effective buy/sell agreements and explaining the impact of each element of the agreement.
Board of Directors
Regardless of the size of your organization, an active board of directors (BOD) can provide the direction to keep a business on track. A BOD provides a fresh perspective, plus the incentive to stay focused. If you have never had outside directors, consider using KHA to help structure your board. A BOD can monitor financial and operational results, approve budgets and set policy.
A BOD meeting does not have to be off-site or a daylong session. It can simply be a quarterly meeting at your location, or KHA’s offices, for a few hours.
Second Opinion Service for Tax Returns
Not sure if the tax advice you are getting is right for you?
Good advice is what creates tax savings, while complying with the law. KHA’s 2nd Opinion provides a review of your previously filed tax returns. We look at key tax issues and the overall quality of your returns. Often times a review can result in tax savings and reduce the risk of non-compliance with tax laws.