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One of the most intimidating aspects of selling your business can be facing the barrage of questions during the various management presentations you’ll be doing for potential acquirers. Be prepared to be grilled on all facets of your operations.  Of course every meeting will be different, but here are some questions you can expect to be asked when you’re in the hot seat: [...]

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Should You Sell Your Business Now?

Published on 09 January 2013 by in News

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Have you been thinking about selling your business but just can’t decide if now is the best time?  Do you find yourself repeatedly analyzing the economic situation and wishing you had a crystal ball? There are positive signs and there are negative signs….

If you’re still up in the air and can’t quite decide whether or not to hit the eject button, here are six reasons you might want to consider getting out now. [...]

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Does Your Business Have Curb Appeal?

Published on 08 January 2013 by in News

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Let’s say you’re in the market for buying a house and you go to view one that looks appealing in the ad. How does it look on the inside? The outside? What about the location? What is your general impression?

Like your house, your business projects an image to potential buyers. When they come to see your business for the first time, your “curb appeal” can attract a buyer to your business—or cause them to walk away from it.

Do you need to improve your curb appeal? Here’s a three-step plan: [...]

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You may be years away from selling your business, but it’s never too early to understand what the process involves.

If you have ever promised your child a treat in return for good behavior, you know all about negotiating leverage. When selling an attractive business, you also have leverage—but only up to the point where you sign a letter of intent (LOI), which almost always includes a “no shop” clause requiring you to terminate discussions with other potential buyers while your newfound “fiancé” does due diligence.

After you sign the LOI, however, [...]

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The Sellability Score

Published on 14 September 2012 by in News

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Are you thinking about selling your business, but you’re not really sure where to start? Do you have an exit strategy in place?

Selling a business is not as easy as selling a house. With a house you know what you’re selling – 3 bedrooms, 2 bathrooms, with a great view, in a popular location. There are probably several similar homes in the local neighborhood that you can look at for comparison and you can always call on the expertise of your local realtor when considering a potential sale price.

When selling your business, it’s difficult to gauge exactly what you are selling. You may ask yourself: is my company valuable? Is my business sellable?

The Sellability Score can assist you in answering these questions. [...]

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The C-word and 6 Others to Avoid at Work

Published on 04 September 2012 by in News

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The majority of businesses in America today started out as service companies.

If you want to own a web design firm, you don’t need a lot of money, just a technical knack. Enterprising professionals who know how to get the media’s attention can start their own pubic relations firms without much more than a mobile phone. No capital required.

But if you want to build a valuable company – one you can sell – you’ll want to [...]

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Joanne M. Wandry and Albert D. Wandry vs. Commissioner of IRS, T.C. Memo 2012-88, Filed March 26, 2012.

The Facts:

Albert and Joanne Wandry formed the Wandry Family Limited Partnership (“Wandry LP”) in 1998, contributing cash and marketable securities to the partnership.  The Wandry’s spoke to their tax attorney regarding the gift tax consequences of making transfers of limited partnership interests to their children and grandchildren.  The Wandry’s were advised they could transfer interests by using their annual gift tax exclusions of $11,000  per donee and additional gifts in excess of their annual exclusion of up to $1 million for each Mr. and Mrs. Wandry.

In January of 2000, the Wandry’s began gifting Wandry LP partnership interests to their children and grandchildren.  The Wandry’s tax attorney advised that the exact value of the partnership interests transferred would not be known until a later date, after the gifts had been made and a valuation of the assets had been performed.  The Wandry’s were advised to transfer a specific dollar amount instead of partnership interests and that gifts should be transferred as of either December 31 or January 1 of the year so that a midyear closing of the books would not be required.

In April of 2001, the Wandry’s started a new family business and on August 7, 2001, the Wandry’s formed Norsemen Capital, LLC (“Norseman”).  By 2002, all of the Wandry LP assets were transferred into Norseman. [...]

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Where to start, when your growth stops

Published on 07 May 2012 by in News

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Why would two companies in the same industry, with the same financial performance, command vastly different valuations? The answer often comes down to how much each business is likely to grow in the future.

The problem is that a lot of successful businesses reach a point where their growth starts to slow as the company matures. In fact, the price of doing a great job carving out a unique niche is that the specialty that made you successful can start to hold you back.

If you make the world’s greatest $5,000 wine fridge, you may have a successful, profitable business until you run out of people willing to spend $5,000 to keep their wine cool.

Demonstrating how your business is likely to grow in the future is one of the keys to driving a premium price for your company when it comes time to sell. [...]

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No Regrets?

Published on 04 March 2012 by in News

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It may surprise you to learn that over 70% of former business owners regret selling their companies less than a year after the sale.  What accounts for this seller’s remorse? The main reason is lack of preparation on the part of the business owner.

Case in point – Roger Elkhart sold his commercial construction company a little over a year ago.  His revenues and earnings had suffered over the last few years.  Roger decided it was time to sell.  He was 56 and had run his family’s business for the last 25 years.  The last few years had been tough and Roger was burned out.  He felt he needed a change.  Now 18 months later, Roger is depressed and lost.  He’s tired of playing golf and isn’t sure that selling his business was the right decision.

A recent survey showed that the number one reason business exits fail is due to a lack of planning on the part of the owner.[1] A separate study showed that most business owners spend more time planning their family vacations then they do planning how and when to exit their business! Rather than [...]

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9 Ways to Leave Your Business

Published on 04 March 2012 by in News

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Determining how and when to start a business is hard.  Deciding how and when to leave it can be even harder.

As many of you may remember, singer Paul Simon said there are 50 ways to leave a lover.  If you are a business owner thinking about how to leave your business you really only have nine options to consider. Here’s a brief summary of these options.

  1. Sell or give your company to a family member;
  2. Sell your business to one or more key employees;
  3. Sell to your employees (ESOP);
  4. Sell your business to other shareholders;
  5. Sell to an outside third party;
  6. Bring in an outside investor and keep a minority interest;
  7. Go public;
  8. Hire a management team to take over and become a passive owner; or
  9. Liquidate your business.

Determining exactly which option is right for you is a challenge that many business owners put off until it is too late.  Opportunities pass with time.  If you wish to “leave your business on your terms and on your time table,” you need to be proactive about understanding your exit options.

We recommend that you follow a four-step process to determine which exit option is best for you. [...]

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