• Should I Consider an ESOP?

    Posted by: Tawnya

    There are various strategies business owners can employ to exit from their businesses or to simply provide liquidity for the owners when they want to remain in control of their companies. If you are a business owner, an employee stock ownership plan (ESOP) may be a useful tool to achieve your objectives.

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  • Strategies to Improve Your Future by Increasing Your Business Value

    Posted by: Tawnya

    It is a well established principle that as your company increases in value, it opens up more opportunities and more favorable exit paths for you. Increasing the value of your business is within your control and unlocking that potential can dramatically improve your post-business future.

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  • How to Avoid Typical Deal Breakers in Third Party Sales

    Posted by: Tawnya

    There are many obstacles a business owner encounters when selling their business to a third party. As a general rule, most businesses are not ready for immediate marketing and sale when the business owner decides s/he is ready to sell. Many obstacles and deal breakers can be eliminated by engaging in exit planning or the pre-sale planning process before putting the business on the market.

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  • Seller's Discretionary Earnings – What is it and How is it Calculated?

    Posted by: Tawnya

    One of the basic financial figures used in valuing businesses is this thing called EBITDA which stands for Earnings Before Interest, Taxes, Depreciation and Amortization. When it comes to valuing small businesses, however, you will often find that the value has really been based on something called SDE which is Seller’s Discretionary Earnings. So what’s the different between the two?

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  • Large Contracts - Friend or Foe?

    Posted by: Tawnya

    What happens when the business owner is trying to sell the business and the large contract has run its course? It can be difficult to determine the value of a business when 60% of the revenue was derived from a single client contract and that contract is out for rebid.

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  • How and When to Tell Your Employees about the Business Sale

    Posted by: Tawnya

    Communication at the right time and in the proper manner is a critical component of a successful transaction. There are some business owners that decide to tell their employees when they originally put the business on the market for sale. This can be beneficial or detrimental.

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  • How to Prove Your Undeclared Income when Selling Your Business

    Posted by: Tawnya

    One of the greatest challenges faced by entrepreneurs that have skimmed cash from their businesses, is to establish this income as ‘earned but unreported’. Without the ability to prove the existence of this income, the buyer will exclude it from the business value and decrease his/her purchase offer accordingly.

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  • How Do You Handle Unearned Income when Buying or Selling a Business?

    Posted by: Tawnya

    One of the common issues that arises when buying or selling a small business is how to tackle customer deposits and unearned income. This is an area that is often overlooked during the negotiations and can present unwelcome surprises for the Seller, the Buyer, or both, depending on how it is addressed, or if it is addressed, in the Asset Purchase Agreement.

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  • Yes, You CAN Sell a C-Corp

    Posted by: Tawnya

    I was speaking with a business owner recently about selling his business. During the conversation, he told me his accountant told him he could not sell his business because it was a C-Corp. I have a feeling he misunderstood his accountant's statement. Nevertheless, it opened up an interesting dialogue regarding some of the difficulties in selling corporations in general and more specifically C-Corps.

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  • How to Get the Higher Multiple when You Sell Your Business

    Posted by: Tawnya

    If a business in a specific industry is going to sell for 3 to 4 times earnings, what determines whether the buyer will be willing to pay the lower or higher multiple? In other words, if adjusted earnings are $800,000 and the industry multiple is 3 to 4 times earnings, what determines whether the buyer will be willing to pay $2,400,000 versus $3,200,000 for the business?

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