Business Growth and Succession Planning

We're known as a business law firm where owners get practical, insightful advice, helping them identify sustainable growth goals and how best to get there.  And once the owner is ready – What’s Next?  We focus on helping owners of privately-held companies of various types and sizes with complex tax, operations and other growth and succession-related business issues.

We help with any gaps in a business owner's plans and with the leap to the next level, without risking what has already been built.  For example, we look at . . . 

  • Creating compensation plans for key employees to provide them with the incentive to stay with the business and to help the business grow.  Often these are deferred compensation plans, or phantom stock or stock appreciation rights plans.  Sometimes these are liquidity event bonus plans or annual performance-based plans, and sometimes the owner is even willing to offer ownership to key employees.
  • What can be done to create and protect intellectual property assets?  Should trademarks be filed with the U.S. Patent and Trademark office?  Should employees be required to sign confidentiality agreements and are non-compete agreements appropriate for key employees?
  • How an owner's time and talents might be better supported and leveraged, such as hiring help with sales or operations, or perhaps bringing a controller or CFO on board to supervise financial affairs and even administrative matters.
  • Whether a different entity structure would provide better tax benefits or more protection from liability risk for both the business and its owners.
  • Putting in new and improved practices, such as revisiting employee time off policies and updating the employee manual.
  • Reviewing and revising agreements between owners or with new or future owners to ensure that the possible exit plans meet the needs of this larger and more successful business, such as buy-sell agreements, voting agreements, and other equity agreements.
  • Helping the owner see, process and plan for the different ways to exit.  We look holistically, for example, at the financial implications of an exit, at the owner’s desire to leave a legacy, at protecting the employees' jobs and customers’ expectations.  We explore the future with an owner and help them decide intentionally how one kind of exit or succession option impacts or involves the company's employees, customers, an owner's family members, and other internal and external factors.
  • Assisting owners in identifying and achieving their financial, personal and estate planning goals. How and when will owners be ready for their “What’s Next?

In other words, we offer companies the ability to have an outside “General Counsel” with years of general business and tax wisdom that is focused on taking care of the basics – and challenging hidebound, business-as-usual systems and structures, and offering alternatives that the business owner has not considered.  We help owners re-think everything they do.  We are prepared for your "What’s Next?

MB Law in Action – Featured Client Case Studies

Case Study: The business has grown tremendously, and the owner is beginning to see the need for a more sophisticated management structure.

Our Client’s Objective:  The owner has been working alone at the top for years, and is heavily involved in all business aspects.  She is tired of this rat race and is looking for some help.  What should she offer those new key employees? 

MB Approach:  Key employees are a significant factor in building business value.  When the owner does everything, that is a great job, but the money fizzles out when the owner seeks to cut back or retire.  This owner was ready for key employees to come in and help – a sales manager and a CFO. After examining the owner’s business and personal goals and the company’s finances, we suggested initial cash compensation packages with a phantom stock plan when the employees met their pre-established performance goals.  

What’s Next? The owner was able to attract that key talent and the business could grow without turning the owner into a 24/7 slave.  The owner was able to reduce time in the office and regain some personal freedom.

Case Study: Owner isn’t ready to quit, but has some key people he depends on.

Our Client’s Objective: The owner doesn’t want to lose those key people, but isn’t ready to just sell them the company.  What alternatives are available to the owner? 

MB Approach: The owner wants to plan ahead, but doesn’t even know where to begin.  We first identified his goals - how long he might want to continue, and what money he would need from this transition out of ownership – and also discussed his thoughts about who these key people are and what their management and financial capabilities are as owners.  We offered several options – compensation packages, liquidity event bonus plans, a staged purchase of shares while the owner remains in majority control, and even a small purchase now with a planned full buy-out in 10 years.  

What’s Next? The owner began to see that one of the key people was not really ready (and may never be ready) for ownership and that the others may be ready but will need some mentoring.  He also became aware of the financial risk of selling without an upfront cash payment, as well as the tax implications. That knowledge gave the owner enough to go back to the key people and discuss his plans and their desire to proceed, including exploring financing alternatives for the key employees to provide initial liquidity to the owner and a heightened level of commitment from the employees.

Case Study: The stalled succession plan for a family-owned business.

Our Client’s Objective:  Mom and Dad started the business, and, over time, gave a bit of stock to each of their children who were both working for the company. Now the daughter runs the business, the son is off doing something else, and Mom and Dad want to retire. Mom and Dad needed money from the business for their retirement. What are they to do?

MB Approach:  We assisted them in deciding whether the daughter wanted to buy the business and also found that they would have to take payment over time because she could not borrow the full amount necessary for the buy-out from a bank to pay for it.  Is the daughter ready for this mental burden of being sure that Mom and Dad are being taken care of?   Can she pay enough for their stock or would a third party buyer be better?  If they did sell to a third party instead of to the daughter would she still have a job?  Would she want that job?  What about ensuring equal financial benefit to the son?

What’s Next?  We worked with the family and their accountant and other advisors to conclude the future ownership of the business. And, yes, the daughter decided to take the plunge, and Mom, Dad, daughter, and son are all delighted with the outcome.  The real estate owned by Mom and Dad and used in the business provided an opportunity for the parents to transfer a portion of their wealth outside of the business.

Practice Strengths

Business owners often fall into a pattern of doing business and forget to look for ways to get unstuck in order to grow sustainably.  Others might have an idea of how they want to grow ­ whether setting up successors, adding new products or services or locations, adding or promoting key employees, or otherwise taking their business to the next level ­ and want help getting there.  

This is where Minor & Brown comes in.  We help businesses with their growth and tax-related issues that impede - or promote -­ growth.  These include:

  • Employment, such as drafting or revising manuals, motivating and retaining key employees and proactively avoiding employee disputes
  • The choice of business structure or the formation of a new entity or entities
  • Implementing plans to minimize disagreements with employees or among owners, to limit taxation and personal liability, and avoid litigation

We protect the business and the business owner from liability, pointing out new legal, tax and practical pitfalls that they may not have seen and find ways to avoid those pitfalls and hazards.