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Tuesday, May 23, 2017

Contemplating one’s own demise can be challenging but is paramount to sole owners and their businesses. Consider the fictional Harry Withers, the 54-year-old owner of Withering Hikes, a chain of seven retail apparel stores for outdoor enthusiasts on the Western Slope of the Rocky Mountains. One day, Harry disappeared while scouting new hiking trails.

After several months of fruitless searching, Harry’s family opened probate proceedings only to find that Harry’s once-thriving business also had disappeared. However, Withering Hikes’s disappearance was far more typical than Harry’s. Because Harry had dreamed of selling his compan... Read More

Tuesday, May 09, 2017

If you co-own your business, the business-continuity agreement (or buy-sell agreement) is one of the most important documents that you will sign. If you have a buy-sell agreement that is out-of- date, not reviewed, or focuses on the wrong issues, it may be worse than having no agreement at all.

Let’s start with a hypothetical case study that illustrates the importance of drafting a buy-sell agreement that anticipates and provides for all transfer events (lifetime transfers, disability, or death).

George Acme’s son-in-law, Tom Gardner, had been with George’s company for over 20 years. Tom had g... Read More

Tuesday, April 25, 2017

Steve Smith was no different than millions of other baby-boomer business owners in that the thought of leaving his business was never far from his mind, no matter how far away his exit might have been. He daydreamed about transferring the business to his oldest daughter and perhaps to a member of his management team, yet he couldn’t gauge their passion for owning a business and hadn’t tested their management skills.

And, of course, they had no money.

Steve’s company was his economic and financial lifeline. Without its income, his ability to use the business to accumulate wealth, the ability t... Read More

Thursday, April 20, 2017

First of all, Jerry Springer is 73 years old, holy smokes – just another example of how time flies. Anyway, I wanted to shed some light on what I would call the “dark underbelly” of exit planning.  We most often focus our time and attention on the technical aspects of succession planning work – tax strategies, estate planning, valuations, transfer of ownership, etc. etc.  All of these are incredibly important to the process to be sure, but they shouldn’t be focused on to the extent of ignoring the other side of the coin – the personal side of transition – be it within a family or outside of it. 

I’ve seen firsthand the chair throwing – to use a Jerry Springer Show analogy... Read More

Tuesday, April 11, 2017

Today, we discuss the essential elements of a plan owners use to transfer a business to insiders that keep the owner in control until he or she is paid the sale price. If you suspect that the children, key employees, or co-owners you would pick to succeed you do not have the funds to cash you out, consider the following 10 elements that make insider transfers successful.

Element 1: Time

A transfer to insiders takes time: time to plan, time to implement, and time for successors to pay the departing owner. Typically, the more time owners take to transfer the company, the less risk they incur and more money they receive f... Read More

Tuesday, March 28, 2017

In this issue, you'll find an outline of the primary reasons owners choose to exit via sales to third parties. Before you consider that option, you and your company must be prepared for the sale, and the M&A market should be favorable. Creating a written plan that minimizes taxes, allows you to focus on company profitability, and holds your advisors accountable for achieving your goals is key to the successful third-party sale.

If you think that planning for the biggest financial event of your life is a good idea and prefer an approach other than “wait and see,” what can you do to make sure your company is ready to sell when you decide the time is r... Read More

Tuesday, March 21, 2017

Anyone who has owned and then sold a home remembers the fun conversations you had with your realtor about the value of your property. It might have gone something like this:

You:  “We think our home is worth A because our neighbor got B or because we are assessed at C or because we paid D for it 15 years ago and have spent $50,000 fixing it up over the years.”

Realtor: “We think your home is probably worth E, based on these data points.” 

You: “Oh, uh-oh. That’s a little lower than where we wanted to be. Maybe selling right now isn’t going to work. If we want to get A for our place, what do we need to do?” 

Or maybe your response was this:

You: “Oh,... Read More

Monday, March 13, 2017

In this issue, we attempt to dismantle the most common objections owners make to undertaking the planning necessary to exit their companies successfully. Assuming we are successful in persuading you that Exit Planning not only helps your business while you are in it but also is the best way we’ve found to leave your company to the successor you choose, on the date you choose, and for the amount of cash you want, how do you, as an owner, jump into Exit Planning?

Excuses to avoid Exit Planning include the following:

1. The business isn't worth enough to meet my financial needs. When it is, I'll think about leaving

... Read More
Tuesday, February 28, 2017

This provocative article reminds owners that buyers pay for business value—not for the selling owner’s expertise—and that Exit Planning is the process owners use to make themselves “inconsequential.” In addition to building value, Step Three involves protecting value and minimizing taxes.

In all likelihood, you are absolutely critical to the success of your business. Without you, there is no business.

We want to fix that.

With a little luck and a lot of hard work, we can help you become an Inconsequential Owner.

At some level, all owners understand that they will someday leave the businesses they have created. Let’s assume for a moment that you leave your... Read More

Thursday, February 23, 2017

via Cedar Valley Business News, Waterloo-Cedar Falls Courier

No one is born a CEO.

Chief executive officers come to their positions in a variety of ways, but being the boss is something many mid-size business owners never envisioned. So, instead of a business college, they often went to the school of hard knocks and got their education on the fly.

Advance Iowa offers them an alternative — get their education from experts and learn along with peers facing similar struggles.

“(CEOs) become so focused on trying to take care of everyday issues that it’s hard for those owners to get a lot of other input. They may get input from employees or family members, but t... Read More

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