The buyout agreed to by management will include purchase price and terms, but the critical element is management succession. If additional management talent is required, it should be a part of the succession and buyout plan. Often, the purchase is leveraged and the balance of the payments due are contingent upon continued business success. Sale of the Business . Determine the real assets which are being sold and their real value to an outside buyer without the key manager.
Many businesses depreciate significantly after the loss of the entrepreneur who founded the company.
For a business to be saleable for full value, the buyer must feel secure of continued success, which may require a sale of the business during the manager's lifetime with a continued employment agreement for some period of time, or it may mean establishing special compensation packages for other key employees to insure their continued employment. The negative impact of illness, disability or death of a business owner can be significantly reduced with advanced planning. These options should be reviewed, carefully discussed and a plan put in place as a part of a complete estate plan. Each business has its own personality. The ideal plan varies depending upon the size, type, makeup and characteristics of your business.