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SBA Loans: Capital for Small Business Acquisitions
September 23, 2015 / in Acquire a Business, Sell a Business / by Bob Altieri
So you’re thinking of selling your business and prefer to be cashed out rather than be paid in installments over time. Uncle Sam wants to see your business continue as a job creator, and hence, works with lenders to make attractive loan terms available to business buyers, on loans up to $5 million. US Small Business Administration (SBA) loans come in two types: business loans – type 7(a), and real estate loans – type 504. According to Bob Porter of …
Event: Helping Business Owner Clients Achieve More Valuable Exits
September 16, 2015 / in Exit Planning, News, Sell a Business / by Al Statz
When: September 22, 2015 Where: San Rafael, California Host: CalCPA San Francisco-Marin Discussion Group As baby boomer owners and shareholders of privately-held businesses reach retirement age and get serious about exiting ownership, they face many new questions and challenges and turn to their professional advisors, often their CPA, for solutions. Based on his experience helping over 100 companies successfully sell or transfer ownership to partners, management or the next generation, Exit Strategies’ founder Al Statz will …
Why use a professional M&A advisor when selling your business?
September 9, 2015 / in Sell a Business / by Louis Cionci
Business owners contemplating a sale of their business sometimes wonder why they should use a professional M&A advisor. Owners may ask themselves: Why do I need an M&A advisor to sell my business? Can’t I just do it myself and save a significant amount of money in fees? Owners can frame the decision to use a professional M&A advisor in terms of a cost-benefit analysis. What are the benefits to me? What are the costs …
Monday Morning Quarterbacking in Business Valuations
September 2, 2015 / in Business Valuation / by Jim Leonhard
Is hindsight appropriate in retrospective valuations? As business valuation experts, we are often retained to provide a conclusion of value as of a date that is in the past. For example, valuations for estate tax filings often use the date of death, which can be as much as a year in the past. Valuation dates for litigation cases can be even further in the past. Normally, using hindsight is discouraged in business valuations — the expert …
Simple Way to Avoid Stale Thinking and it’s Ugly Cousin Group-Think
August 26, 2015 / in Business Strategy, Exit Planning / by Al Statz
As a professional advisors we all have habits, standards, rules and regulations that direct much of our daily activities. It’s important that we constantly reexamine our preconceptions, processes and practices to avoid stale thinking. It’s easy to default to accepted dogma that might be hindering our work. This isn’t to say everyone needs to be on the absolute leading or bleeding edge of their profession. However, periodically challenging our thinking and methods helps stimulate us …
Marketing a Business: The Need for Confidentiality
August 20, 2015 / in Acquire a Business, Sell a Business / by Don Ross
Maintaining confidentiality during the M&A sale process is a critical factor in successful business transactions. At the onset, during the marketing phase of a business sale, you are walking a tightrope between those you want to inform and those you don’t. Confidential information is shared only with qualified buyers who have evidenced professional and financial capacity. Information is withheld from those, who by virtue of their relationship with the seller’s business, could prove detrimental …
What is a Recapitalization Exit Strategy?
August 14, 2015 / in Exit Planning, Sell a Business / by Al Statz
One of the exit strategies available to company owners is called a recapitalization, or “recap”. In a recapitalization, an investor (usually a private equity firm) purchases an equity interest in your company using a combination of cash and debt financing. They expect to grow the company and earn an attractive return on their cash investment when they sell the company at a higher price in 3-7 years. Their value creation strategy usually involves initiatives to …
How Well Do You Know Your Exit Options?
July 26, 2015 / in Exit Planning, Sell a Business / by Exit Strategies
You have built a business that provides a strong income and comfortable lifestyle. However, if you are like most business owners you haven’t made the time to know the range of options you have to successfully exit the business and transfer your wealth. The tax, legal, valuation, deal structure, and insurance considerations are many. Even if you had the time, where do you begin? Before you can evaluate any of these options, you must first …
Asset Appraisals May be Needed to Support a Business Valuation
July 26, 2015 / in Business Valuation, Sell a Business / by Jim Leonhard
I recently valued a number businesses that required the appraisal of certain tangible assets, such as real estate and equipment – in one case its was an extensive library of manuals and maintenance specifications for a service business. At what point do we look for a appraisal specialist with particular expertise to value such assets? The simple answer is, it depends on materiality. If it is clear that the business enterprise value is well …
A Pyrrhic Victory
July 4, 2015 / in Sell a Business / by Don Ross
A Pyrrhic Victory is defined as a victory that is offset by staggering losses, to the extent that the victor incurs losses that are equal to or greater than those of the adversary. Its origin dates back to Pyrrhus, the king of Epirus (now part of present day Greece) who defeated Roman armies at Asculum in 280 B.C. and suffered such heavy losses of troops and commanders that he was unable to amass new officers …