b'Seven Landmines in Your Electrical Business ExitThis is part 1 of a 2-part seriesby Kevin Kennedy, Beacon Exit PlanningBy Kevin Kennedy, Beacon Exit PlanningE privatelyownedbusinesscanbeaveryemotional,Beacon has observed these seven recurring problems in its experience Exitingyour intimidating and taxing proposition. This complex process requiresadvising owners from coast to coast. These are minefields that can derail input from your accountant, tax adviser, attorney, business appraiser,owners from successfully achieving their inevitable exit.estate planner, financial adviser and insurance adviser, among others. Coordinating and understanding the disjointed advice can be over- 1. Outliving Your Moneywhelming. Our job as exit planners is to design a customized blueprint for your exit, while coordinating all the moving parts associated with2. Odds of Selling to a Consolidator or Competitortransferring the business.3. Odds of Selling Company to Management or FamilyCertified Exit Planners are specialists in this process. Their role is analogous to that of an architect. Picture the duties of an architect.4. Taxes of Zero to 55 Per Cent PlusThey understand and design every part of a building but dont neces-sarily have the capability to install a furnace. They design, specify and5. Predatorscreate a blueprint that coordinates the building process.6. Buy-Sell AgreementsThe exit planner works in a similar holistic fashion. They design the exit plan, creating a blueprint for the business owners and their advis- 7. Primary Cause of a Business Exit Failureors as a way to understand and coordinate the various disciplines in the exit process in order to meet the owners goals and reduce the tax1. Outliving Your Moneyimpact. The exit planner does not write the legal documents, recom-mend investments or prepare estate planning documents. They areGuess what the number one fear is for affluent Americans? Surprisingly, designers and process consultants. it is not public speaking or even death, which used to be the biggest fear. Business owners intuitively understand and manage their everydayNow for those over 55 the greatest fear is running out of money in risks in a measurable manner. But most owners have never exited aretirement, according to the results of Bank of Americas latest Merrill business and are unaware that the odds are against them. My experi- Edge Report released in May 2014.ence as a business owner who bought and then sold a 200-employee business has helped me understand firsthand the complexities thatMost business owners are considered affluent. Their business pays them come with selling and transferring a business.generously, and supports their lifestyle, travel, autos and entertainment. Industry studies show that their largest segment of wealth is trapped in The good news is I was one of the lucky owners to sell my business.their illiquid business, which amounts, in our experience, to more than The bad news is the cookie cutter advice from our advisers of over70 per cent.30 cost our company, buyers and sellers millions of unnecessary taxes that I never realized until my exit planning training several years afterSo the owners challenge is how to live independently from the business, my exit. This article will highlight several concerns to open your mindcash out without being clobbered by taxes, retire and not outlive their when it comes to a business exit.money. Welcome to the world of exit planning. Ontario Electrical Contractor9'