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Business Strategy Insights
Your Buy-Sell Agreement: In good shape? Needs a tune up? Or Disaster waiting to happen?
February 25, 2015 / in Business Strategy, Business Valuation, Buy-Sell Agreements / by Bob Altieri
An Ounce of Prevention is Worth a Pound of Cure I can’t tell you how many times I’ve heard from business owners and their spouses that a key person became disabled or died and left an operating closely-held business in turmoil. What, no Buy-Sell Agreement? Ask anyone who has been selling and appraising business for a number of years and they will tell you this sort of thing is common. All businesses with more than one shareholder should have …
The Dismal D’s of Buy-Sell Agreements
January 28, 2015 / in Business Strategy, Buy-Sell Agreements, Exit Planning / by Al Statz
Well-written Buy-Sell Agreements (BSA’s) enable orderly share transfers upon the occurrence of certain events during the life of a business. Buy-Sell Agreements also prevent litigation that can quickly create a lose-lose situation for business owners. This article presents a list of 27 trigger events and common issues to be addressed in Buy-Sell Agreements. And, just for fun, each item on the list begins with “D”. Buy-sell issues are unpleasant to think about; which is why …
Exit Planning: A New Year’s Resolution
January 13, 2015 / in Business Strategy, Exit Planning, Sell a Business / by Al Statz
“Expect the best, plan for the worst, and prepare to be surprised.” – Dennis Waitley This is the time of year when many of us decide that we need to change things or accomplish new things, and we set goals at the beginning of the New Year. Quit smoking; lose weight; make more money? How about taking a look at your business this year and begin to prepare it for your exit, which will ultimately …
The Importance of a Credible and Competent Valuation Expert
September 30, 2014 / in Business Strategy, Business Valuation / by Al Statz
The need for business valuation arises in many circumstances ranging from dispute resolution, to estate planning, to the sale of a business to name only a few. As in all professional disciplines, it is important to hire a practitioner who is fully trained, able to discern relevant facts, and abreast of current best practices. Consider the following New York Supreme Court case.* Adelstein v. Finest Food Distributing Co Two brothers and their uncle each owned …
Why do real estate bubbles hurt more than other bubbles?
July 2, 2014 / in Business Strategy, News / by Bob Altieri
I came across an article in the First Tuesday Journal, posted by Jeffery Marino, May 30, 2014, that I thought would be worth sharing. The author quotes two thinkers on the economics of bubble-and-bust episodes; Atif Mian, Economics Professor at Princeton and Amir Sufi, Finance Professor at the University of Chicago. This blog title’s question is best illustrated by the comparison between the burst of the tech bubble of 2000 and the real estate bubble of …
Why do business owners hire an M&A broker?
April 12, 2014 / in Acquire a Business, Business Strategy, Sell a Business / by Jim Leonhard
Recent clients “Jane and John Doe” were satisfied with the market value estimate of their manufacturing business, as determined by the independent valuation we prepared. Armed with this essential piece of information, they were ready to sell the business they had founded and grown with much effort over many years. John thought they should try to sell the business themselves. After all, weren’t they the best salespeople for their business? And why should they share …
Why Should I get My Business Valued?
February 26, 2014 / in Business Strategy, Business Valuation / by Roy Martinez
I received a call the other day from a friend who owns a publishing company. I was telling him about the types of valuation projects I was working on, and he asked, “I’m not in the middle of selling my business or transferring it to my children; why would I want to have my business valued? Besides, I know the rules of thumb for my industry.” The answer I gave him was essentially the following. First …
Pro’s and Con’s of Price Formulas in Buy-Sell Agreements
January 3, 2014 / in Business Strategy, Business Valuation, Buy-Sell Agreements / by Al Statz
Exit Strategies is regularly called upon to determine the value of closely-held company shares for buy-sell transactions. Common events that trigger a transfer of shares are when a shareholder retires or resigns from employment, is fired, dies, or becomes disabled, divorced or insolvent. There are several facets to successful buy-sell transactions, but valuation is typically the most contested issue. The pricing method prescribed in your by-laws, shareholder, buy-sell or stock restriction agreement, as the case may be, …
Why Should I Bother Valuing My Business?
December 13, 2013 / in Business Strategy, Business Valuation, Exit Planning / by Al Statz
A new article at Forbes.com addresses a question in the minds of many small business owners, “Why Should I Bother Valuing My Business?” The author explains several of the common reasons small business owners have their businesses appraised by an independent business valuation expert, as they prepare for a sale, buy-out, contingencies, retirement, or passing the business on to children.
Want a successful merger or acquisitions? Put an M&A advisor on your board.
November 1, 2013 / in Business Strategy, Sell a Business / by Al Statz
Companies planning a merger or acquisition would do well to have an investment banker (M&A advisor) on their board of directors. A new study from the University of Iowa found that firms with an investment banker on their boards of directors pursue mergers and acquisitions more often. Moreover, those firms perform better after the acquisition has been completed than firms that don’t have investment bankers on their boards. Read the full article.