Owners can sell their business to a third party, transfer to an insider (key employees), or transfer to a child. Let’s focus on a transfer to an insider. The to an insider can be difficult and risky, but it can be done.
In this blog post, we unveil an example of a business owner who is attempting to put their business on the market while assuming the value of their business. Luckily, this business owner has a trusted advisor to help clear up any confusion and suggest the necessary steps to take before contemplating a sale. Thomas Ryder, an experienced Exit Planner, was a bit taken aback when his client, Brian Alpert, announced, “ I’ve decided to sell my business.” Typically, Ryder’s cl...
The number of possible successor owners is rather limited. Business owners must choose among (and usually have in mind a specific successor):
- A child or children (or other family member/s)
- ...
In our last post, we uncovered how minimizing one’s risk profile is a great start to enhancing business value. The second piece to the valuation puzzle is responsible use of a company’s available cash flow. Improve Available Cash Flow While minimizing risk is critical to enhancing the , one must also keep a pulse on how a business is utilizing its liquid capital on a day-to-day basis. Obviously, improved revenue or reduced expenses will also increase value, but in most...
There are countless considerations when transferring the ownership of a business. Before any real plans to sell a business can commence, a business owner first must compare the value of their business today with the amount that they want or need their business to be worth when they sell it, because there’s often a gap between those two numbers. One of the quickest ways to close that gap is by enhancing the value of their business. In order to increase the value,...
Buy-Sell Agreements that deal with the transfer of ownership at an owner’s death (and sometimes permanent incapacitation) only ensure that a surviving owner owns all of the company and that the deceased owner’s estate receives fair value, in cash, for the transfer of ownership. It does not ensure that the business will continue.
Recommendations
Successful small and mid-sized businesses usually share a few common elements. First, they’re headed by owners who shoulder most of the important burdens. Second, they must . Third, when owners realize that they must change their already-successful businesses to make them even better, they either or rush to action. Lets look at owners like ...
Basing an Exit Plan on false assumptions is a lot like building a house on sand, something none of us would ever do. But owners build their business exits on false assumptions on a daily basis. In this article, we'll look at a few of the most common false assumptions owners make about their exits.s Exit Planning is owner-centric. A plan's sole purpose is to achieve the foundational, universal, and aspirational goals of the...
In this blog, we conclude our discussion of the most common problems that typical Buy-Sell Agreements create for the business owners who sign them. These problems can jeopardize the business’ very existence and make it difficult for the owner’s family to maintain its financial security. When owners learn that their Buy-Sell Agreements can destroy their businesses and leave their families scraping by, they usually want to fix them right away.
Third-Party Sales: Perceived Pros Think about some of the most successful . Whether it’s Facebook buying Instagram for $1 billion or Google offering to buy Snapchat for $30 billion, a common presumption that business owners make when considering a third-party sale is that they can make the most money by selling to a third party. Typically, they’re correct: Of all Exit Paths, third-party sales tend to provide business owners with the most money the mo...