Exit planning: plan ahead to prevent key employees from stalling your exit sponsored by BUSINESS TIP An important part of a success- ful ownership transfer, regardless of exit path, is the presence of key employees. Key employees are those who have a direct and significant impact on business value, meaningfully participate in the business’ strategic future, and whose combination of skills and experience would be exceedingly difficult to replace. Because of their role in the business, key employees can just as easily stall your business exit as facilitate it. Consider the story of Maria Villalobos, who had her exit plan stalled by one of her key employees. ––––– Maria Villalobos was nearing her retirement. Over 30 years, she built her one-woman plumb- ing company into a 55-employee regional powerhouse. Her ambi- tion had led her to plan for her business exit on her own, based on information she had gleaned and absorbed over the years. She hired a business valuation special- ist, who valued her company at $11 million, enough for her and her family to live comfortably. She recruited a business broker to assemble a deal team and find the right buyer. And over 15 years, she had invested in training three key employees – Armand, Petra, and Donald – to run specific portions of the business after she retired. As her business broker field- ed offers, Maria gathered her key employees to tell them her intentions. “I know I’ve been talking about retiring for a couple years now, but I’m finally ready to pull the trig- ger,” she told them. “My broker’s gathered some offers, and we’re going to be considering them this month.” “It’s about time,” Donald said cheerily. “You’ve earned this.” Vincent Mastrovito 28 TileLetter | April 2018