Exit Strategies Insights

Industry insights, knowledge base and announcements for business owners and professional advisors

Exit Planning Insights

Importance of a Proper Valuation before Offering a Business for Sale

Lately I’ve been spending a lot of time working on an acquisition search for a client, and in this process I found many business offerings that were priced far too high and several that were under-priced. From a buyer and seller perspective, overpricing is a massive waste of time. At the other extreme, when price is set too low, seller’s leave hard-earned money on the table. Both situations can easily be avoided by obtaining a proper business …

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Thinking of Selling Your Business? Don’t Let Built-In Gains Tax Surprise You.

I was recently asked by “Chester” to help him sell the $10 million service company he founded 24 years ago. Chester, who is 65 years old, has had some health concerns and wants to travel the world with his wife Margie. Two of his competitors have been acquired in the past 3 years by strategic buyers. His business is doing well and he thinks the time is right to sell. In Chester’s industry, almost all …

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Role of Business Appraisers and M&A Advisors in Estates and Trusts

I was recently asked about Exit Strategies’ role as business appraisers and M&A advisors in estates, estate planning and trust administration.  Here was my answer … Business Valuation (a.k.a. Appraisal) As business valuation experts, we provide fair market value appraisals of closely-held corporations, FLPs and LLCs for estate planning, gifting, estate tax, charitable donations, buy-sell transactions and succession planning. We value fractional interests in operating companies and asset holding companies using appropriate discounts. Our appraisers …

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Do Strategic Buyers Share Synergies with Sellers?

In successful M&A deals involving substantial synergies, the deal price usually falls in the range between the standalone fair market value of the target business and that value plus the full value of potential synergies. Value of potential synergies? Increased value (over and above fair market value) to a strategic buyer, involves synergies between the acquired and acquiring firm and the additional financial returns and therefore value created by those synergies . There is a “1+1=3” …

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“If you don’t know where you are going, any road will get you there.”

I’m amazed at how many business owners think about exiting all the time but never do any real exit planning. The most successful business owners I know have an exit plan on the day they open their doors. Their business decisions are synonymous with the plan. To navigate without a destination is like “trying to hold the wind up with the sail,” as Willie Nelson once sang. As you go through the years in your business, …

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Congress Passes American Taxpayer Relief Act of 2012

During the early morning hours of Tuesday January 1, 2013, the Senate passed a bill that had been heralded and, in some quarters, groused about throughout the preceding day. By a vote of 89 to 8, the chamber approved the American Taxpayer Relief Act, H.R. 8, which embodied an agreement that had been hammered out on Sunday and Monday between Vice President Joe Biden and Senate Minority Leader Sen. Mitch McConnell, R-Ky. The House of …

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Expiration of $5.12 Million Gift Tax Exemption Presents Unique Gifting Opportunity

As a result of the tax cuts enacted under former President George W. Bush and extended under President Barack Obama, the estate and gift tax currently is set at a maximum rate of 35% with a $5.12 million exemption amount.  But unless Congress takes action, the maximum estate and gift tax rate will revert to 55% and the exemption amount to $1 million, effective January 1, 2013. It is uncertain what, if anything, Congress will …

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October 25th Seminar: Maximizing the Value of Your Business

In this fast-paced workshop, business owners learn … Valuation basics Factors that increase enterprise value and marketability Steps to developing your exit strategy Steps in a proven M&A selling process Current market conditions and trends Tax implications and impending changes Answers to many common questions that owners have This is essential information for private business owners who wish to sell in the next 1-5 years.  It is not too early to plan the successful exit …

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Small Business Acquisition Financing: What Lenders Want

In ten years of selling private businesses, financial leverage has consistently been one of the key success factors in expanding the pool of buyers and closing deals. Fortunately for business owners, the SBA loan guaranty program is an excellent funding source for deals up to $5MM. And, lenders are lending now. A lender analyzes both the buyer (borrower) and the business being purchased.  Here are 10 things lenders look for when evaluating a loan request …

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October 27th “Maximize the Value of Your Business” Seminar Announced

Exit Strategies announces the next in its series of executive briefings for business owners. At this candid, fast-paced workshop, business owners will learn … Valuation basics & 20 ways to build enterprise value Preparing a successful exit strategy Market conditions and trends Tax advantages of selling in the next 15 months Steps in a successful M&A sale process Answers to common questions When:    Thursday, October 27th, 5:00 to 7:30 pm Where:   Petaluma, California Cost:      Free of charge …

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