Don’t be fashionably late to the ESOP party. You’ll miss out on the cake!

cake crumbsI have known for a couple of months that my “Employee Stock Ownership Program” (ESOP) blog would be launching soon.

Yet, here I sit in front of my keyboard the day before it is due preparing. Procrastination at its best (or worst).

This somehow seems entirely appropriate given that many business owners treat business succession in the same way.  When it comes time to transition ownership they start exploring options.  Unfortunately, they often find that some options are no longer available to them given their desired timing to exit.

The time to have the succession planning conversation is well before it is needed (if you start a business on Monday you should start thinking on Tuesday how you are ultimately going to extract the value of the company when you retire).

Starting the succession discussion two years before the business owner wishes to exit simply doesn’t work for many individuals.

Succession planning should be introduced to business owners ten, fifteen, or twenty years before their planned exit so that they have time to put together a strategy that works for them. For many companies an ESOP will be a good option.

An ESOP is a qualified retirement plan that invests primarily in the stock of the sponsoring corporation.  The ESOP allows the business owner to have a controlled exit over several years typically.  In addition, the ESOP can allow for the business owner to diversify their holdings and can assist the company with helping employees prepare for retirement.

What about you?

This blog is designed to be a two way conversation. What questions do you have? Now’s your chance people, let’s hear what you have to say.

In addition to blogging here, I also tweet regularly about topics of interest to ESOPs @jlripperger.

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Your turn…

Please share your thoughts in the comment section below. I read and respond to comments. So let me help!

 Affiliation Disclosures
Company stock is not a pooled investment. Stock may experience greater volatility and should not be directly compared to investment options that have a more diversified investment mix. It is not intended to serve as a complete investment program by itself.
Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.

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