ESOPs (Employee Stock Ownership Plans) are one of the most powerful — and most underused — exit strategies available to business owners. They offer significant tax advantages, preserve company culture, and can be structured to pay the owner full market value. But they're not right for every business. This 2-minute screener tells you exactly where you stand.
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Tax Advantages
S-Corp ESOP owners can defer — or eliminate — capital gains tax on the sale. C-Corp owners can use the Section 1042 rollover to defer taxes entirely.
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Culture Preserved
The business stays independent. Employees become owners. Your name, your team, and your mission remain intact after you exit.
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Full Market Value
A properly structured ESOP pays the selling owner fair market value — determined by an independent CVA — funded through a leveraged buyout using the company's own cash flow.
How many full-time employees does your company have?
Under 15
15–30
31–50
51–100
Over 100
⚠ ESOPs are generally not feasible below 15 employees due to financing and administration costs. Your results will reflect this.
Question 2 of 10
What is your approximate annual EBITDA?
Under $500K
$500K – $1M
$1M – $2M
$2M – $5M
Over $5M
Question 3 of 10
What is your business entity type?
💡 S-Corporations are the most tax-efficient ESOP structure for sellers — once 100% ESOP-owned, an S-Corp pays zero federal income tax, allowing accelerated debt repayment to the seller.
Sole Proprietorship
LLC taxed as partnership
S-Corporation
C-Corporation
Question 4 of 10
Does your business currently carry significant debt?
Yes — high leverage (debt-to-EBITDA above 4×)
Yes — moderate leverage
Low debt
Minimal or no debt
Question 5 of 10
How important is preserving your company's culture and independence after the sale?
Not important — I want a clean exit and full liquidity
Somewhat important
Very important to me
It's my primary goal — I want employees to benefit
Question 6 of 10
Do you have key management employees who could run the company after you exit?
No — it's primarily me
1 person, but they're not fully ready
1 capable person who could step up
2 or more capable management employees
Question 7 of 10
What is your approximate target exit timeline?
⏱ ESOP transactions typically take 12–24 months to complete from first conversation to closing — including feasibility study, CVA opinion, ERISA legal work, and financing.
Less than 1 year
1–2 years
3–5 years
5+ years — planning well ahead
Question 8 of 10
Is your business consistently profitable — 3 or more years of positive EBITDA?
No — we've had unprofitable years recently
1–2 years of positive EBITDA
3 years profitable
4+ years consistently profitable
Question 9 of 10
Are you open to receiving some payment over time — such as a seller note — rather than 100% cash at closing?
No — I need all cash at closing
I prefer cash, but I'm flexible
Yes — open to a seller note with appropriate terms
Question 10 of 10
Is deferring — or potentially eliminating — capital gains tax a priority for you?
Not a priority — I'm comfortable paying capital gains
It would be nice, but not the deciding factor
Very important — tax efficiency is a primary goal
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Your ESOP Feasibility Score
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Enter your details to see your full screener results — including what drove your score, what it means for your exit options, and specific next steps.
ESOP Feasibility Screener — Callwen Advisory Group
— Candidate
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out of 27 points
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What drove your score
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Share this with your advisor
ESOP feasibility is a team conversation. Share these results with your attorney, CPA, or financial advisor — an ERISA attorney, trustee, and independent CVA are all required for a proper ESOP transaction. We're happy to make introductions.
Curious what an ESOP could actually mean for you?
A 20-minute pre-feasibility call costs nothing. We'll walk through your specific situation, estimate the tax advantage, and tell you honestly whether it's worth pursuing — or whether a different structure makes more sense.
DISCLAIMER: This screener is for educational and informational purposes only and does not constitute ERISA, tax, legal, or financial advice. ESOP feasibility depends on many factors beyond those captured in this screener, including ERISA compliance requirements, state laws, lender standards, and independent valuation. Results are directional only and should not be relied upon for any transaction or planning decision. Consult a qualified ERISA attorney, independent trustee, and Certified Valuation Analyst (CVA) before pursuing any ESOP transaction.