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Have You Considered a Management Buy Out?

Management Buyouts, or MBOS, can sometimes have a negative connotation. Maybe that’s because it sounds like the management team is getting “taken out”. On the contrary, it is the exact opposite. A Management Buyout is a fancy acronym for when the current managers buy controlling interest of a company from its owners. That’s a good thing for management!

It Takes a Village to Sell a Business [Infographic]

Selling a business is one of the most exhausting endeavors an entrepreneur will undertake. Unfortunately, many simply do not succeed. In fact, only one out of ten entrepreneurs will actually complete the business sale process and transfer their business to another. Selling a business involves many different parties, all of whom have a special role and a unique skillset. Most importantly, they must all work together. Those entrepreneurs who succeed recognize ‘it takes a village to sell a business’.

IMPAQT’s Richard Hagerty | Exit Interview: Emerging Market Opportunity

This three part series tells how one entrepreneur took a chance on an emerging market, weathered an economic storm, and exited with a bright future.

Right Place at the Right Time

It almost seems like cliché advice a commencement speaker would offer to a group of graduates.

Keep your ear to the ground, work hard and always be on the lookout for the next big thing. And when that next big thing does indeed come, don’t be afraid to take a chance on it.

How to Increase the Value of Your Business

How to Increase the Value of Your Business

The best solution to a problem lies in uncovering what the root cause of the problem really is. So often, this is the case when an entrepreneur is struggling with profitability in their business. Over the past few posts, we have discussed the concepts of how a minimum order policy and Pareto’s Principle applied to the customer/client base can be very powerful to help an entrepreneur improve the value of their business.

Protecting a Seller in the Face of a Buyer’s Due Diligence Investigation

Protecting a Seller in the Face of a Buyer’s Due Diligence Investigation

The many years of hard work and long days at the office may be about to pay off—you have just received an offer from a potential buyer to acquire your business. Just as you developed and followed a detailed business plan to build your business, now you need to develop a well-thought out plan covering the sale of your business, paying proper attention to the due diligence process.

Inherent Business Risk That Impacts the Value of Your Company

Inherent Business Risk That Impacts the Value of Your Company

One of the most crucial, yet subjective, aspects of any business valuation is determining the specific company risk premium of the business being appraised. The specific company risk premium varies with each company and is intended to be an adjustment to reflect a variety of circumstances inherent in the company and its industry.

Key Questions When Transferring Your Family’s Business

Key Questions When Transferring Your Family’s Business

Anyone who owns a family business is intimately familiar with the blood, sweat, and tears associated with building and then keeping the business viable. Nevertheless, it is not unusual for the business entrepreneur to postpone consideration of various issues involved in transferring the business to the next generation, including determining the value of the business.

The Application of Valuation Discounts

The Application of Valuation Discounts

When considering your business valuation and business risks in the hopes of selling that business, there are many factors to consider. One important factor to understand is the application of valuation discounts. The valuation of a controlling interest versus a minority interest within a privately held business can have different values, depending on the circumstance.

Letter Of Intent: Saving You Time & Money When Buying Or Selling A Business

Letter Of Intent: Saving You Time & Money When Buying Or Selling A Business

If you have the opportunity to buy or sell a business, negotiating the terms of a letter of intent (an “LOI”) is one of the first and most critical steps in the process of completing the transaction. A well-written letter of intent provides a valuable foundation for a potential transaction as it captures the parties’ intentions with regard to the structure, timing and material terms of the transaction. An LOI often imposes significant obligations on each of the parties, and consequently is typically the product of fairly intense negotiations between the parties.

The Importance of a Buy-Sell Agreement

The Importance of a Buy-Sell Agreement

For every entrepreneur, a smooth transition of business ownership will be of importance at some future point. The Buy Sell Agreement deals with a specific exit strategy case. An agreement by and between business owners, it establishes a mechanism for the purchase of ownership interests following the departure of an owner due to a triggering event (i.e., death, divorce, disability, retirement, etc.).

Which Business Valuation Report Matters?

Which Business Valuation Report Matters?

The various types of valuation reports produced by a business appraiser can be confusing to an entrepreneur, especially when the appraiser belongs to more than one valuation association. Under most appraisal standards, a business appraiser can produce two types of reports: a detailed appraisal report or a calculation report.

Defining the Indemnification Basket: Deductible Baskets & Tipping Baskets

Defining the Indemnification Basket: Deductible Baskets & Tipping Baskets

The “indemnification basket” is one of the most important deal terms found in the Letter of Intent and ultimately in the Purchase Agreement and is often misunderstood by both the buyer and seller of a business. Buyers want the basket to be as low as possible and Sellers want it to be as high as possible. Baskets may be one of two types: a deductible basket or a tipping basket.

The Significance of Due Diligence Process when Acquiring a Business

The Significance of Due Diligence Process when Acquiring a Business

Throughout the lifecycle of a business, it is important for a business owner to remain focused on increasing the profitability, competitive advantage and market reach of the business. An entrepreneur typically accomplishes these objectives by (i) reinvesting the profits of the business to increase its workforce, customer base and cash flow and (ii) using business profits (along with other financing) to acquire competing businesses. Such business acquisitions typically serve two purposes by eliminating competitors and increasing the growth rate, product and service offerings, and market share of a business.

The Importance of a Business Sale Non Disclosure Agreement (or NDA)

The Importance of a Business Sale Non Disclosure Agreement (or NDA)

A typical entrepreneur invests a tremendous amount of time, effort and money in building a business. That is why it is so important for entrepreneurs to make sure employees and third parties who work with the business are prohibited from improperly using or disclosing any confidential or proprietary information of the business(e.g. customer lists, trade secrets and financial statements). Similarly, and in connection with the opportunity to sell a business, it is critical for the owner of the business not to provide any confidential information to a prospective purchaser until that party has signed a well-written non disclosure agreement.

Benchmarking to Improve the Value of a Business

Benchmarking to Improve the Value of a Business

Understanding a company’s operating results is an important factor for a business owner to determine the value of a business. However, the operating results must be placed in the proper context by comparing them to results of the industry as a whole. By doing so, a business owner is able to understand how they are doing financially relative to their industry peers. This exercise is known as benchmarking.

Understanding Business Valuations (Transition Plan for the Business Owner)

Understanding Business Valuations (Transition Plan for the Business Owner)

At some point in time, every business owner will leave their business (voluntarily or involuntarily). Through proper planning, an owner should expect to achieve their desired goals. Statistics show that the value of an owner’s business accounts for over 90% of their personal wealth. However, more than 75% of all business owners do not have a formal transition plan in place.

3 Great New Years Reflections for Entrepreneurs

3 Great New Years Reflections for Entrepreneurs

Just a few days before everyone rings in the New Year, I have a ritual that I undertake and enjoy immensely. It doesn’t involve highly caloric food, expensive Champagne or making a resolution. I have shared my New Year’s ritual with successful entrepreneurs and have always received a positive response. It’s really simple. It requires you to ask yourself three questions. What happens next, is up to you.