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Welcome News for Business Owners: Five-Year Built-in Gains Tax Recognition Period Permanently Extended
March 2, 2016 / in Exit Planning, Sell a Business / by Al Statz
The Protecting Americans from Tax Hikes Act (PATH), enacted in December, makes selling a business easier for some. Since most sales of SME’s will be asset (versus stock) sales, double tax for C-corp owners and built-in gain tax (currently 35 percent federal) for owners of recently converted S-corps are very real impediments to selling a business. C-corporation owners face a “double tax”, where gains on a sale of assets are taxed at the corporate level …
Think Like a Buyer
February 24, 2016 / in Exit Planning, Sell a Business / by Roy Martinez
Entrepreneurs spend their entire career thinking like an owner. They don’t need to pay any attention to the value of their business. They may have a vague notion of its value based on anecdotal industry revenue or profit multiples that they heard bandied about at an industry conference they went to years ago in Orlando. But, at the end of the day, during the operating years, what is important to an entrepreneur is the bottom …
Business Values: Labyrinth or Maze?
February 15, 2016 / in Business Valuation / by Bob Altieri
In Greek mythology, the Labyrinth (Greek λαβύρινθος labyrinthos) was an elaborate structure designed and built by the legendary artificer Daedalus for King Minos of Crete at Knossos. Its function was to hold the Minotaur eventually killed by the hero Theseus. Daedalus had so cunningly made the Labyrinth that he could barely escape it after he built it. In English, the term labyrinth is generally synonymous with maze. As a result of the long history of …
Necessary Components in Business Valuation
February 10, 2016 / in Business Valuation / by Jim Leonhard
Business valuations (a.k.a. appraisals) come in many shapes and sizes depending on who has done the work and the process they have followed. Here’s a brief checklist of what to look for in an appraiser’s engagement letter and CV prior to hiring him or her: 1. Is the appraiser competent to perform your business valuation? Verify that he or she has a current certification from one of the accrediting organizations, such as ASA, NACVA or IBA, as …
Build, Transfer, or Protect
February 4, 2016 / in Exit Planning, Sell a Business / by Exit Strategies
Research indicates that most business owners have 60-80% of their wealth tied up in their businesses. Yet in our experience few owners have a clear idea about the value of their business and few have done much thinking or strategizing about how to build, transfer, or protect years of hard-earned wealth. Let’s examine these options. Build means to invest for growth. This involves time and money. As you near retirement, it may be less prudent …
Exit Strategies Sells Advanced Components Technology to Strategic Acquirer
January 17, 2016 / in News / by Al Statz
Exit Strategies is pleased to announce the sale of Redwood City-based Advanced Components Technology, Inc., a contract manufacturer of precision sheet metal enclosures, machined parts and electro-mechanical assemblies to medical equipment, automotive, defense, lighting and instrumentation OEM’s operating in Silicon Valley. ACT has been a preferred supplier to Keysight Technologies, HP and Agilent for many years, and is a Tier 1 supplier to Tesla Motors. ACT provides quick-turn prototypes, with extensive DFM support, and low to moderate production volumes. The acquirer, METALfx, provides precision metal …
Good Exit Planning: First and Foremost, A Valuation of the Company
December 28, 2015 / in Business Strategy, Exit Planning, Sell a Business / by Bob Altieri
With the baby boomer generation retirement rush beginning to take hold, many business owners lack sufficient information about the value of their business for retirement planning purposes and don’t foresee the deal killers that await them. A Deal Killer is a condition that, if undetected and unresolved before the sale of a business, will kill the transaction. The purpose of pre-sale planning is to maximize sale proceeds (as well as to achieve other non-financial goals), …
Why M&A Deals Fail
December 21, 2015 / in Sell a Business / by Jim Leonhard
Companies that make multiple acquisitions are much more likely to have successful merger and acquisition (M&A) transactions than companies that have made one or less acquisitions in the past five years, according to a recent Boston Consulting Group (BCG) article. In fact, over 50 percent of all M&A transactions result in negative shareholder returns. The main culprits appear to be related to post-merger integration, especially: Poor integration of the target organization Higher complexity than anticipated …
2016 Promises to be a Banner Year for Mergers and Acquisitions
December 14, 2015 / in Sell a Business / by Al Statz
Deciding how and when to retire is one of the toughest decisions in a business owner’s life. Selling to a strategic buyer, investment group or management team represents the culmination of years of hard work and investment. Going to market when the owner is personally prepared, and the business is ready, and market conditions are conducive offers the best opportunity to maximize results. M&A activity in 2015 has been strong and 2016 market conditions look …
Interest Rates Likely to Rise After December FOMC Meeting
December 9, 2015 / in Business Valuation, News / by Louis Cionci
It is widely believed that the Federal Reserve will raise the rate it charges banks for overnight deposit lending, commonly called the federal funds rate at the December 15-16 meeting of the Federal Open Market Committee. The Federal Reserve controls the three tools of monetary policy–open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal …
Exit Strategies Group, Inc. is a leading provider of business sales and acquisitions, business valuations, and exit planning services for family owned and closely-held companies since 2002.
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