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

Four Questions Your Buy-Sell Agreement Should Answer

A buy-sell agreement is a common contract between shareholders that both restricts ownership and facilitates the transfer of shares in a closely-held company. The other shareholders or the company become the buyers (marketplace) for what would otherwise be highly illiquid stock. Every buy-sell agreement should answer four fundamental questions: 1. Who is the purchaser? Generally, […]

Does My Buy-Sell Agreement Establish Value for Estate Purposes?

Buy-sell agreements that contain a clause that values stock at less than fair market value can be disregarded for tax purposes. It is important to consider the requirements of Internal Revenue Code (IRC) Section 2703 when developing an estate plan involving business interests in which 50% or more of the stock is family owned. Section […]

Current Market Multiples for Main Street Business Sales

Each quarter, The International Business Brokers Association (IBBA) and M&A Source together with Pepperdine Private Capital Markets Project and the Graziadio School of Business and Management at Pepperdine University publish a quarterly national survey of business brokers and M&A advisors called the Market Pulse Survey. Price multiples and other key metrics in the Main Street […]

Help! I Need a Broker to Sell My Company

I was recently talking with a business owner who is considering selling his California company. He had found my contact information online, and while he was interested in getting started, he really didn’t know how to evaluate a business broker’s credentials for a sale engagement. Sellers are often unsure what questions to ask. For this […]

How Would Your Company Survive Without You?

If you are like many business owners, you tend to get caught up in the daily demands of your business: managing sales and production, costs, and the bottom line. What about preservation and protection? Perish the thought, but what would happen to your company if it was unable to carry on due to your death […]

First Steps to Buying a Business

I work with a lot of sellers and buyers of small to medium sized businesses in the North San Francisco Bay Area. Most potential buyers do not succeed in buying a business, largely because that lack a systematic approach. A few weeks ago a high-net-worth individual asked for my advice on acquiring a business, and […]

When is the Right Time to Sell My Business?

BOOK REVIEW I can’t remember the last time I recommended a book, but today I feel compelled to tell business owners about an excellent new one titled, “When is the Right Time to Sell My Business?” This book not only helps you decide when to sell your business, but will also help you understand its […]

California Loan Guarantee Program: A viable financing option for small business acquisitions

Banks often use the Small Business Administration 7a program to guarantee acquisition loans for small businesses.  Because small business ventures face unique risks, most do not qualify for conventional bank financing.  In most states, the SBA program is the only option; however, here in California a less well known alternative called the California Loan Guarantee […]

Forbes Article: Which Is Better, A Financial Buyer Or A Strategic Buyer?

I thought would share this brief Forbes article that came across my transom early this morning. I generally agree with author John Warrillow’s comments on Strategic versus Financial buyers. If your goal is to maximize value and liquidity today, and you’re not looking for an equity partner to help you build longer term enterprise value, […]

Exit Planning: Meaning and purpose drives sustainable business growth

Several years ago I had the opportunity to work on an acquisition assignment for Mitsubishi Electric, one of the multinational business units of the Mitsubishi group of companies. While doing research to better understand my client’s organization, I found an inspiring article that quoted Tachi Kiuchi, Mitsubishi Electric’s managing director at that time… “Are the needs of […]