Archive for July 2013

That Age-Old Question: Is an ESOP Right for Me?

That Age-Old Question: Is an ESOP Right for Me?

To sell to an ESOP or not sell to an ESOP, that is the question.  And the answer lies within an expertly prepared feasibility study.  While ESOPs are a fantastic tool for exiting business owners, it is not a one-size-fits-all solution.  Whether it’s for an initial sale to the ESOP or for a subsequent sale to an existing plan, an ESOP is best utilized when its installation is based on sound decisions after thorough and thoughtful research.

R.K. Schaaf Associates, Inc. (RKS) was founded in 1975 by Rainer K. Schaaf primarily to provide ESOP sponsors with a third party recordkeeping firm that focuses on the unique nuances relating to these plans.  Although Mr. Schaaf has since retired, RKS continues to focus on the technical and operational aspects of ESOPs.  Our staff is dedicated to providing our clients with all the information they need to make informed decisions – including the decision that an ESOP may not be right for them.

RKS can help companies determine whether an ESOP is feasible by preparing an insightful examination of the impact of the proposed transaction on the company, its employees, and the ESOP.  Corporate structure, demographics and exit strategy all need to be “put under the microscope” so to speak before implementing an ESOP.  RKS will prepare a Feasibility Study tailored specifically to address a client’s needs, and offers three different levels of study to accommodate those needs, one of which provides a side-by-side comparison of an ESOP versus other major liquidity or corporate financing alternatives, including a private auction, negotiated sale, debt-recapitalization, or liquidation.

In summary, the most important step the company can take before implementing an ESOP is to analyze whether the plan would be feasible.  Once an analysis is completed and it is determined an ESOP is feasible, a company is likely to experience many years of enhanced employee productivity, less turnover and a greater bottom line.  The horror stories you may hear about ESOPs are usually a direct result of poor planning and research in the initial stages.  Our goal is to make sure that companies thoroughly plan for their ESOP so that it will be a success story.


For more information about R.K. Schaaf Associates, Inc., visit our website at or at  For more information about our feasibility studies, contact Wendy Lankes at (800) 678-8337 or