Here’s the revised edition of the best-selling book that details the many ways professionals can reap the benefits of their investment in a firm. Topics include how to sell internally, how to start an ESOP, how to sell to an outside buyer, how to "go public," and more. You’ll be introduced to the options available for cashing in on your equity, whether you’re a minority shareholder or sole proprietor.

• Shows you the options for cashing in, whether you’re a shareholder or sole owner
• Arms you with the knowledge to maximize the value of your equity in a firm
• Provides valuable resources for ownership transition, including a sample buy/sell agreement, stock purchase agreement, and more
• Prepares you to make the best possible choice for cashing in your single biggest asset

The latest update to the "owner’s manual" for principals of A/E/P and environmental consulting firms. You’ve taken on a lot of risk and made a lot of sacrifices for the company. If you’re like most firm principals, much of your real economic payoff doesn’t come until you sell your interest in the firm.

Delay too long, and many pitfalls await you—valuing your firm, finding a buyer, management transition, lawyers, taxes, and more. There are many, many places to go wrong. No wonder so many firm principals never receive the full value for their equity.

WHAT YOU MUST KNOW

Now suppose somebody offered you a concise, authoritative guidebook that explained in plain English (not financial-ese) dozens of ways that you can reap from your investment in an architecture, engineering, or environmental consulting firm. How to sell internally, how to start an ESOP, how to sell to an outside buyer, how to effect an orderly and profitable shutdown of a firm, how to ensure that your estate cashes in after you’re gone, how to "go public," even how to take more cash out of a firm without transferring control, and more.

How much would it be worth to you to maximize the pay-out when you go to cash in your investment in a firm—an investment that may be worth more than your house, your I.R.A., your 401(k) account, your baseball card collection, or any other investment you may be counting on? What price tag can you put on that kind of information? Lawyers and accountants will charge you $150, $200, $300 or more for just one hour’s worth of advice.

Well, such a guidebook does exist and it’s revised and updated! It’s the Insider’s Guide to Cashing In on Your Equity—2nd Edition, written by Lowell V. Getz and published by Zweig White & Associates exclusively for owners of A/E/P and environmental consulting firms. And the cost of this no-nonsense, 202-page report is not $300. It’s just $95.

WHAT YOU’LL LEARN

There are many paths available to architecture, consulting engineering, and environmental consulting firm owners who are looking to cash in on their investment. The Insider’s Guide to Cashing In On Your Equity—2nd Edition is your guidebook to understanding all of the options. And if you’re still using a copy of the first edition of this report, the new version will bring you up-to-date.

Structuring an Internal Buyout: Because of the limited resources of new owners buying in, the firm’s own funds are usually the only resource available when structuring an internal buyout. In other businesses, this procedure is called an employee leveraged buyout (LBO). It is important to understand the LBO concept in order to see how it has been adapted for use in professional services firms.

Transfers Involving the Family: In some instances, ownership transition may involve passing the torch from one generation to the next within the family. There are many options available to firm owners wishing to effect a transition of this nature, many of which are discussed in this chapter.

Providing Incentives Based on Stock Value: An exploration of alternative methods of taking money out of a design or environmental consulting firm that can be used in conjunction with, or instead of, the techniques described in other chapters.

Compensation Strategies: Not all ownership transition plans involve a one-time transaction in which all of the departing shareholder’s stock is sold and he walks away with a lump-sum check in his pocket.

Employee Stock Ownership Plans (ESOPs): This chapter explores what ESOPs are, how they work, and how they affect the value of your firm.

Sale to Outsiders: Selling an A/E/P or environmental consulting firm to an outside investor may yield the greatest value to the current owners, but where some people look at a change of ownership as an opportunity, others may see it as a threat.

Going Public: This is not an option for the vast majority of firms. But for some larger firms, the option to go public (convert from private to public ownership) can be an effective means of cashing out, and can offer substantial benefits.

Orderly Shutdown: When there is no second generation of principals, the traditional option of shutting the doors forever is still an alternative.

Ensuring Your Estate Cashes In: Don’t overlook the value of your investment in a professional services firm in estate planning.

WHAT YOU’LL GAIN

No, this book by itself is not going to turn you into an ownership transition expert. No book can do that. It’s intended to be a concise introduction to what you must know. And it’s the best starting point we’ve ever seen for design and environmental consulting firm principals. Author Lowell V. Getz. is a Certified Public Accountant, Accredited Senior Appraiser, and financial consultant with over 25 years experience in serving design and environmental firms worldwide and the author of four other books on financial management and ownership transition for design firms.

With the help of this book, you’ll see the options available for cashing in on your equity in a professional services firm, whether you’re a minority shareholder or a sole owner. You’ll arm yourself with the knowledge you need to maximize the value of your investment as a firm principal. You’ll get help in planning for and minimizing the tax consequences of selling your interest in a firm. You’ll be prepared to make the best possible choice for cashing in your single biggest asset.

If your business came with an owner’s manual, this would be it! Like the other books in the Insider’s Guide series, the book is packed with forms, checklists, examples, war stories and special tips, other resources, and more. And like those books, it’s brought to you by Zweig White & Associates, the people that make their living exclusively by serving the A/E/P and environmental consulting industries.

SECOND EDITION—WHAT’S NEW?

For this second edition, the Insider’s Guide to Cashing In has been updated for 1997 and beyond, augmented with new chapters, and beefed up in sections where principals need the help most.

Up-to-date with the latest tax law: The book has been thoroughly updated to address changes in tax law that occurred since the first edition. Why rely on an older, out-of-date book for guidance on one of the biggest financial decisions of your life?

New chapters on family businesses, internal deal structures: A new chapter on transfers involving the family spells out different techniques for transferring ownership to the next generation. Another chapter expands on options for transferring ownership internally, including how and when to use an asset sale, a stock sale, or restructure to transfer control.

Beefed-up coverage of selling to outsiders and more: Options for selling a firm to outsiders are expanded, including methods for finding buyers and sellers and advice on taxable vs. non-taxable transactions. Also details of a new guaranteed government loan program available to certain firms.

More answers to common questions: The principles of the book are illustrated with Q&A sections addressing real-life issues faced by firm principals in ownership transition.

Chapter 1 – Introduction
The first chapter provides a quick introduction to the topic expanded later in the book.

Chapter 2 – What Do You Really Own?
Introduction • Definitions of Value • Variables Used in Valuation • Conclusion • Q&A

Chapter 3 – Considerations In an Internal Buyout
Introduction • Preparing for an Internal Buyout • Developing the Transition Plan • Preparing the Buy/Sell Agreement • Communicating with Stockholders • Pitfalls of Ownership Transition • Pros and Cons of Internal Buyout • Q&A

Chapter 4 – Structuring an Internal Buyout
Using Leveraged Buyouts to Transfer Ownership • Sales of Stock • Bonus Stock • Conditions Favoring a Stock Sale • Selling Assets to Transfer Control • Structuring an Acquisition as a Corporate Reorganization • Guaranteed Loan Programs • Q&A

Chapter 5 – Transfers Involving the Family
Introduction • Stock Redemption • Recapitalizations • Sale of Stock • Gift of Stock • Transferring Ownership in Exchange for an Annuity • Using a Self-Canceling Installment Note to Transfer Property • Using Trusts to Transfer Ownership • Family Limited Partnerships • Q&A

Chapter 6 – Providing Incentives Based on Stock Value
Introduction • Stock Appreciation Rights • Phantom Stock Plans • Restricted Stock • Incentive Stock Options • Non-Qualified Stock Options • Two-Value Stock Plan • Low-Value Stock Plan • Q&A

Chapter 7 – Compensation Strategies
Current Compensation • Salary Continuation Plans • Avoiding Accumulated Earnings Tax • Retirement Plans • Non-statutory Fringe Benefits • Real Estate/Equipment Leasing Partnerships • Deferred Compensation • Excess Benefit Plans • SERPs • Plan Funding • Q&A

Chapter 8 – Employee Stock Ownership Plans (ESOPs)
Introduction • How an ESOP Works • Valuation Considerations • Repurchase Liability • Tax and Financial Considerations • Pros and Cons of ESOPs • Q&A

Chapter 9 – Sale to Outsiders
Introduction • Preparing a Firm for Sale • Adjustments to Financial Statements • Intermediaries • Identifying Potential Buyers • Other Search Techniques • Carrying Out the Sale • Pros and Cons of a Sale to Outsiders • Q&A

Chapter 10 – Going Public
Introduction • Considering a Public Offering • Preparing a Public Offering • Pros and Cons of Going Public • Q&A

Chapter 11 – Orderly Shutdown
Introduction • Shutdown Strategies • Divisive Reorganizations • Compensation and Benefit Strategies • Tax Considerations • Valuation Considerations • Pros and Cons of a Shutdown • Q&A

Chapter 12 – Ensuring Your Estate Cashes In
Introduction • Instruments of Planning Things to Remember • Q&A

Chapter 13 – Choosing the Right Option
Introduction • Sample Illustrations • Q&A

Appendices
Guide to Establishing an Ownership Transition Plan • Sample Buy/Sell Agreement • Sample Stock Purchase Agreement • Sample Search Package • Data Collection Form • Sources of Information • Index