At the same time the new management has a greatly increased incentive to succeed. If the company has a well-funded Employee Stock Option Plan, or ESOP, covering all employees, it may be possible to execute a leveraged ESOP, wherein the ESOP borrows funds from a lender to purchase the owner's stock for the employees. Then the firm makes an annual contribution to the ESOP so it can repay the bank note. This strategy empowers all employees with ownership in the business. However, if the company experiences trouble down the road and can't pay the ESOP, it must make the bank payment on its own.
Most entrepreneurs consider selling the company through a merger or acquisition.
This necessitates a strong business plan, an appropriate company evaluation and a group of interested candidate buyers. Many entrepreneurs dream of taking their company public, however the process can take six months to two years, is as onerous as a major political campaign, and is shaped by worldly events totally outside the company. During this time, senior executives will be constantly on the road, selling the virtues of their company, relying on middle managers to run the company. The right strategy for your harvest is never easy. Spend the time to plan it wisely, with the sage advice of a business attorney well-versed in harvest strategies, and you should be able to strike the best possible deal.