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...
When working with business owners interested in selling to a third party, need to do three things: (1) help owners set goals that will allow them to determine whether an offer from a third party is “good” or “bad,” (2) educate them about the sale process, and (3) prepare their companies for sale. However, some business owners are boundlessly optimistic about their sale prospects. This boundless optimism can make their business susceptible to Deal Killers.
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For most business owners in the lower and middle markets, the business itself is the owner’s most valuable resource. While owners work within the business, it’s their income and perks that have immediate, tangible value. As owners and advisors , owners must confront the fact that what the business is worth to them rarely lines up with that the business is worth to others. In many...
For typical business owners, the answer to one question determines their ability to leave their businesses successfully: “How much money will I get when I sell?” This is one of the reasons why owners should know the value of their businesses....
It is easy to criticize valuation clauses in most Buy-Sell Agreements as being inadequate. Read More
A preliminary company valuation report, prepared by an appropriate professional (Chartered Business Valuator), gives business owners a fairly good idea of how much a company is currently worth. It is strongly advised to have a credentialed (certified) valuation specialist on the Exit Planning Advisory Team. In , advisors use the preliminary company valuation and the five-year cash flow forecast to determin...
2020 was a year of unprecedented adjustments. The COVID-19 pandemic has shifted our views on how we run our business, how much risk we are willing to tolerate, and, perhaps, when should be the right time to exit/sell? VSP Valuation provides independent professional to the business and legal communities. We also provide independent in the even...
The current Pandemic and ongoing economic crisis may have caused the value of your client’s company to decline. This may be an opportune time to consider an estate freeze to lock in the company’s current low value and reduce taxes ultimately payable on death by the client’s estate. Some of your clients may be faced with having to determine the during these times. This could be for tax/estate planning purposes, transaction purposes or dispute related purposes (e.g. commercial, shareho...