Developing an exit strategy can be an agonizing process for a small business owner. Creating a timeline for one's exit from their life's work is a mentally arduous experience. How do you know when it's time to go, or even time to start considering that eventuality?
Even in situations where a clear successor exists, there are no hard and fast rules for when and how a business is transitioned, and how an exiting owner communicates their plans and transitions their responsibilities to next generation leaders.
All of that is doubly challenging for business owners who do not have an established successor, or are unsure if they want to pass their business on to another generation of leadership at all. Picking the right person to fill a single job opening is a tough enough challenge these days. Picking the right person to hand over a business you've dedicated your life to growing? That's substantially harder.
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Employee stock ownership plans (ESOP) do not eliminate these tough questions, nor do they reduce the fiscal and legal complexity of selling's one's business. But for business owners who care about their employees, and want to give them (and their company) a great chance to remain successful into the future, ESOPs offer a wonderful exit opportunity.
The Commercial Vehicle Solutions Network (CVSN) Aftermarket Distribution Summit addressed that opportunity during a panel discussion Monday. Featuring ConMet CFO Luke Penskar, Total Truck Parts President and Chairman Marc Karon, Midwest Wheel President and CEO Michael Callison Jr., and moderated by ConMet Vice President of Sales Brian Rieger, CVSN's panel was a candid an in-depth discussion about how ESOPs work, the positives and negatives of ESOPs for business owners and associates, and how complicated turning a private company into an ESOP can be.
