For What It's Worth: The Exit Strategies Blog

Insights, news and announcements for private business owners and their professional advisors

FOR WHAT IT’S WORTH: The Exit Strategies Blog

Six Reasons NOT to Skim

Pulling unreported cash receipts out of a business is indefensible and unwise under any circumstances, but particularly if the owner expects to exit in the next 3-5 years. All of us during our childhood were offered the parental edict: “Don’t do it, you are only hurting yourself.” So “why”, you may ask . . . now […]

Proposed IRC Section 2704 Regulations – What’s all the fuss about?

Long-awaited proposed regulations under section 2704 of the Internal Revenue Code, released on August 2, 2016, would make sweeping and very significant changes to the valuation of interests in many family-controlled entities for estate, gift, and generation-skipping transfer tax purposes. For decades, the IRS definition of Fair Market Value (FMV), which is based on the […]

Show Me the Money: Financing Strategies for Small Business Acquisitions

Of the many considerations when purchasing a small business, one of the most important is how to finance it.  Even if you have all of the cash you need to buy a business, as a smart investor you will consider whether you are better off borrowing some of the money or bringing in an equity partner […]

Exit Strategies Advises RST in Strategic Sale to Subsite Electronics

Exit Strategies Group, Inc. (ESGI) is pleased to announce the acquisition of its client, robotic inspection equipment manufacturer RS Technical Services, Inc. (RST), by Subsite Electronics, a Charles Machine Works company. Exit Strategies served as exclusive M&A advisor to RST. Sold To: Since 1984, R.S. Technical Services, Inc. (rstechserv.com) has been a leader in the […]

Buy Low, Sell High

Timing is everything. Almost everyone is familiar with the world’s greatest tip to stock investors, “buy low, sell high.” These simple words of wisdom are equally useful to private business owners; however, sage advice is not always easy to follow in the same moment you’re reaping the benefits of high profitability. With the current bull […]

Goethe on Exit Planning

Early this morning at my Rotary meeting I heard a quote that struck a chord with me. Our speaker, Stephan Stubbins, recounted the story of how he co-founded a successful theater company that helped save one of our local state parks. Once Stephan and his partners quit their jobs and fully committed themselves to starting a theater company, things […]

Which Business Valuation Will Facilitate Negotiation?

You are getting ready to sell your business so you must ask yourself some questions:  When do you want to exit?  Who is the most likely buyer?  Is the business adequately prepared to sell?  How does it compare to other like businesses?  And of course, what’s it worth? All business valuation relies on some prediction […]

Hidden Problems with the Price Formula in Your Buy-Sell Agreement, and Solutions

It is tempting to select a formula approach to pricing shares when business partners come and go. After all, a formula is easy for everyone to understand, and in theory at least, inexpensive to apply. If you’re satisfied with getting to a price, any price, then congratulations – job done. But the goal is to […]

Why Start-Up when you can Acquire a Business?

The successful start-up entrepreneur has been glamorized in the media through reality shows like Shark Tank and wide spread accounts of people that have become fabulously wealthy growing a business that started with a kernel of an idea. However it’s no secret that the rate of start-up failure is notoriously high, according to the bureau […]

Make No Mistake: The IRS is Serious About Qualified Appraisals and Appraisers

The IRS and the Tax Courts are serious about requiring taxpayers to properly determine the value of non-cash estate assets, gifts and charitable contributions. To avoid having the value of an inherited, gifted or donated privately-held business interest challenged or rejected by the IRS, obtain a qualified business appraisal (valuation) from a qualified business appraiser. The […]

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