Exit Strategies Insights

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

Sell a Business Insights

Goodwill Part II: Goodwill vs. Goodwill Value

All businesses have goodwill; however, not all businesses have goodwill value! Goodwill, which is usually the largest portion of the purchase price of a business, is the sum of intangibles such as having a good location and trade dress, a negotiated lease in place, trained employees, a website, customers, etc. Not all businesses have goodwill value, which is measured by the amount of earnings the business produces adjusted for the risk of earnings continuing to …

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Goodwill Part I: Personal versus Enterprise Goodwill

Goodwill can exist in two different forms: Personal Goodwill, which is defined as an intangible asset that is attached to a person; and enterprise Goodwill, also an intangible asset that is attached to the business enterprise. If goodwill is attached to an individual, it is non-severable since the person to which it is attached is not being sold. This also implies that the asset is non-transferrable. Of course brokers often make contractual arrangements between the …

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Insightful Article on Selling Your Company

Here is a link to a recent Inc. Magazine article titled “Selling Your Company: 7 Things You Need to Know”, written by a middle-market investment banker. A quick read, the article provides practical insights into the business sale process.

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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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Glossary of Business Sale, Merger & Acquisition Terms

As with most industries, the M&A industry has its own terminology, which can be confusing to the occasional transaction participant. Here we present many of these terms so that you can have a better understanding and comfort level when we discuss the potential sale of your company. Many of these terms are accounting, finance or legal in nature. Accrual Method of Accounting:  A method of accounting wherein income and expenses are recognized on the financial …

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Why 2012 May be the Year to Sell Your Business

Article Published January 3, 2012 — North Bay Business Journal Historically, business transactions escalate when taxes are expected to change, as sellers and buyers try to capitalize on favorable rates. It is safe to assume that the U.S. will soon have to raise taxes on businesses and individuals, so retirement-age business owners looking to maximize value should look closely at selling in 2012. Since it typically takes a year to prepare, find a buyer, negotiate, …

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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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See You on the Other Side

Is a smooth transition possible when acquiring a business? I was was recently interviewed on this subject for the May 2011 issue of Entrepreneur Magazine … Q:    I’ve started talks with a company’s owner to acquire her business. How do I make sure my first days as the new owner go … well, is smoothly asking too much? A:    Ah, the first-time buyer. After talks get going, there’s always that day when you wake up and …

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Famed Investor: References to EBITDA make us shudder …

… does management think the tooth fairy pays for capital expenditures? Article Published December 6, 2010 — North Bay Business Journal This title is a quote from Warren Buffett’s letter to shareholders in Berkshire Hathaway’s 2000 annual report. EBITDA (earnings before interest, taxes, depreciation and amortization) is a good financial metric to use in analyzing, comparing and valuing companies, but, as business owners and investors, we need to understand its limitations. EBITDA is one of several …

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