Tag: Growing your business

The Plans Never Had A Chance!

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, BUSINESS PLANNING, Company Wealth, Estate Costs, Estate Planning, Executive Benefits, Funding your Buy and Sell, Uncategorized

My Business Worth Experience

By Thomas J. Perrone, CLU,CIC

Most business owners don’t fail because they lack a plan. They fail because their plans were never designed to work together!

 I keep seeing the same problem for business owners, quietly setting the businesses and estate up for a future failure!

Most owners have an estate plan, a business plan, insurance policies, and key people they rely on. Each piece may be solid, but too often they were never designed to work together.

That disconnects matters. Only a small percentage of owners ever complete a successful, profitable exit. The rest continue until they cannot, sell under pressure, or liquidate.

Why does this happen?  Forces that work against them.

First, human nature. There is always a fire: a key manager quits, a major customer threatens to leave, or a competitor moves into the market. The crisis of the month always feels more urgent than succession planning, illness planning, or transition planning. “Call me in six months” becomes six years, until a doctor, family emergency, or market event forces the issue—usually too late to do it well.

Second, planning feels overwhelming. Owners fear it will spiral into something they cannot control, so they live with familiar risks rather than open a door that feels too big. And when the business has become both income and identity, stepping back can feel less like a reward and more like a loss of self.

Third, the advisory world is fragmented. Most owners have an accountant, attorney, financial advisor, banker, and insurance agent. Each may be competent, but few are looking at the whole picture or coordinating with one another.

The result is a collection of individually sound documents that, together, may fail to protect the owner, family, employees, or company.

What owners need is not another advisor with another toolbox. They need a financial architect—someone who sees the whole building, coordinates the contractors, and makes sure the succession plan, estate plan, insurance, and key-person strategy all point toward the same outcome.

The encouraging part is that this does not have to happen all at once. Broken into small steps, you can get real answers within months—not years—to the questions that matter most:

– What happens to my business, family, and employees if something happens to me?

– What happens if I lose a key person?

– What if I no longer want to run the business?

– What if cash flow stays fragile?

If you want to grow wealth, increase company value, and create a successful transition—through a sale, family transfer, key-employee succession, or income-producing step-back plan—the responsibility ultimately sits with you. Not because advisors do not matter, but because only you can decide to stop treating this as next year’s problem.

I welcome a brief, conversation about why you think a majority of business owners haven’t coordinated their planning?

What you believe is the main reasons why they aren’t coordinated.

Download your free report:  “Hidden Mistakes” this guide will keep you out of trouble and create a path to follow to avoid some of the most costly mistakes in business

Want to talk:  Call me:

My Calendar

#BusinessSuccession #EstatePlanning #BusinessOwners #ExitPlanning

My Business Worth Experience 💭- Slowly Sabotaging Their Business!

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Estate Planning

By Thomas J. Perrone, CLU,CIC

My Business Worth Experience 💭

It’s hard to say, but a large segment of business owners are slowly sabotaging their business value and future wealth — and they don’t even know it. Read on and find out why…

It has happened to me many times over my long career, with many business owner clients.

When I reviewed my clients’ situations, I would ask them about their future plans for business growth and transition — a very important conversation to have with clients.

Countless times they would tell me that “their plans are all in their heads.”

🚫 The problem is, no one else knows what’s in their head. It’s just a thought, not a real plan.

Most recently, I suggested to my business client that he create a blueprint (a designed plan) of his ideas and share it with his growing middle management team. I even offered to share it with his accountant, attorney, and other advisors, as I often do.

Despite my suggestions, I heard the same story that’s been repeated to me year after year:

“I haven’t gotten around to formulating my plans as of yet.”

These are the plans that nobody else knows about.

⏳ To me, it’s a matter of time — without communication and delegation, a company loses growth momentum and starts the decline.

I honestly don’t see how a business can grow without communicating to employees the future growth ideas and direction the owner wants to go, along with how they’ll get there. It’s like — if they’re not involved, the project won’t get done correctly.

🔁 So, year after year, we review the same story. It’s like Groundhog Day for me.

So, here’s my question:

❓ Does your business have a written growth plan, or is it all in your head?
❓ If it’s in your head, why keep it there?
❓ If you have a written growth plan, what motivated you to create it?
❓ Have you been through this with your company — what was the biggest problem it created?

💬 I’d love to hear feedback from business owners.

Why?

Because for over 50+ years as a consultant, I’ve been told that business owners feel their business is their most valuable asset.

If so… why don’t they communicate their plans to the people helping them grow it — so they have the greatest chance of building a successful future transition? 🚀usiness Worth Experience 💭

It’s hard to say, but a large segment of business owners are slowly sabotaging their business value and future My Business Worth Experience 💭

It’s hard to say, but a large segment of business owners are slowly sabotaging their business value and future wealth — and they don’t even know it. Read on and find out why…

It has happened to me many times over my long career, with many business owner clients.

When I reviewed my clients’ situations, I would ask them about their future plans for business growth and transition — a very important conversation to have with clients.

Countless times they would tell me that “their plans are all in their heads.”

🚫 The problem is, no one else knows what’s in their head. It’s just a thought, not a real plan.

Most recently, I suggested to my business client that he create a blueprint (a designed plan) of his ideas and share it with his growing middle management team. I even offered to share it with his accountant, attorney, and other advisors, as I often do.

Despite my suggestions, I heard the same story that’s been repeated to me year after year:

“I haven’t gotten around to formulating my plans as of yet.”

These are the plans that nobody else knows about.

⏳ To me, it’s a matter of time — without communication and delegation, a company loses growth momentum and starts the decline.

I honestly don’t see how a business can grow without communicating to employees the future growth ideas and direction the owner wants to go, along with how they’ll get there. It’s like — if they’re not involved, the project won’t get done correctly.

🔁 So, year after year, we review the same story. It’s like Groundhog Day for me.

So, here’s my question:

❓ Does your business have a written growth plan, or is it all in your head?
❓ If it’s in your head, why keep it there?
❓ If you have a written growth plan, what motivated you to create it?
❓ Have you been through this with your company — what was the biggest problem it created?

💬 I’d love to hear feedback from business owners.

Why?

Because for over 50+ years as a consultant, I’ve been told that business owners feel their business is their most valuable asset.

If so… why don’t they communicate their plans to the people helping them grow it — so they have the greatest chance of building a successful future transition? 🚀

wealth — and they don’t even know it. Read on and find out why…

It has happened to me many times over my long career, with many business owner clients.

When I reviewed my clients’ situations, I would ask them about their future plans for business growth and transition — a very important conversation to have with clients.

Countless times they would tell me that “their plans are all in their heads.”

🚫 The problem is, no one else knows what’s in their head. It’s just a thought, not a real plan.

Most recently, I suggested to my business client that he create a blueprint (a designed plan) of his ideas and share it with his growing middle management team. I even offered to share it with his accountant, attorney, and other advisors, as I often do.

Despite my suggestions, I heard the same story that’s been repeated to me year after year:

“I haven’t gotten around to formulating my plans as of yet.”

These are the plans that nobody else knows about.

⏳ To me, it’s a matter of time — without communication and delegation, a company loses growth momentum and starts the decline.

I honestly don’t see how a business can grow without communicating to employees the future growth ideas and direction the owner wants to go, along with how they’ll get there. It’s like — if they’re not involved, the project won’t get done correctly.

🔁 So, year after year, we review the same story. It’s like Groundhog Day for me.

So, here’s my question:

❓ Does your business have a written growth plan, or is it all in your head?
❓ If it’s in your head, why keep it there?
❓ If you have a written growth plan, what motivated you to create it?
❓ Have you been through this with your company — what was the biggest problem it created?

💬 I’d love to hear feedback from business owners.

Why?

Because for over 50+ years as a consultant, I’ve been told that business owners feel their business is their most valuable asset.

If so… why don’t they communicate their plans to the people helping them grow it — so they have the greatest chance of building a successful future transition? 🚀

FREE DOWNLOAD ; GROWING YOUR BUSINESS ON PURPOSE

tperrone@necgginc.com

INTERNAL VS. EXTERNAL SALES

by YOUR BUSINESS WORTH, posted in Uncategorized

BY; Thomas J. Perrone, CLU,CIC 

Choosing the Right Path to Exit Your Business

A Business Owner’s Guide from the GWT Planning SystemÂŽ

Every business owner will exit their company one way or another — the only real questions are when, on what terms, and to whom. Of all the decisions in a transition plan, few shape the outcome more than the choice between an internal sale and an external sale. Each path carries distinct implications for valuation, timeline, taxes, financing, and the legacy you leave behind. This report walks through both paths so you can weigh them clearly, in the context of your own Growth, Wealth, and Transition goals.

What Is an Internal Sale?

An internal sale transfers ownership to people already inside the business — a family member, one or more key managers, a broader group of employees through an Employee Stock Ownership Plan (ESOP), or some combination of these. The buyer already knows the company’s operations, culture, and customers.

Common Internal Sale Structures

  • Family succession — passing the business to a child or other relative, often paired with an estate plan and a multi-year transition of leadership.
  • Management buyout (MBO) — one or more key employees purchase the company, frequently financed in part by the seller.
  • Employee Stock Ownership Plan (ESOP) — a qualified retirement plan purchases company stock on behalf of employees, offering the seller potential tax advantages and a built-in buyer.
  • Partner or co-owner buyout — an existing partner buys out a retiring or exiting owner’s interest, often under a pre-existing buy-sell agreement.

What Is an External Sale?

An external sale transfers the business to a buyer outside the company — a strategic buyer (often a competitor or company in an adjacent market seeking synergies), a financial buyer such as a private equity firm, or an individual entrepreneur buying their way into ownership.

Common External Sale Structures

  • Strategic acquisition — a buyer in your industry purchases the business for its customers, talent, technology, or market position, often paying a premium for synergy.
  • Financial buyer / private equity — an investment group acquires the business primarily for its cash flow and growth potential, typically with a plan to scale or resell it later.
  • Individual or search-fund buyer — an entrepreneur purchases the business to run it directly, often using SBA or other acquisition financing.

Key Differences at a Glance

Factor Internal Sale External Sale
Typical buyer Family member, key manager(s), or employees (via ESOP) Strategic buyer, competitor, or private equity/financial buyer
Valuation & price Often below full fair market value; frequently seller-financed Usually the highest achievable price, especially with strategic/synergy buyers
Timeline to close Can be structured over years (gradual transition) Often 6–12 months once a deal is in motion
Confidentiality High — deal stays inside the company Lower — due diligence exposes financials to outside parties
Financing Seller financing, SBA loans, or ESOP debt are common Buyer typically arranges its own financing or uses cash/PE capital
Cash at closing Partial upfront, balance paid over time Larger lump sum at closing is more common
Legacy & culture Preserves culture, brand, and relationships with staff/clients May result in integration, rebranding, or workforce changes
Owner’s post-sale role Often a gradual, mentoring exit Usually a clean, faster exit (sometimes with an earn-out)
Risk to seller Buyer’s ability to repay over time is a real risk Deal risk is concentrated in due diligence and negotiation, then resolved at close
Tax treatment Can sometimes be structured favorably (e.g., installment sale, ESOP rollover) Structure depends on asset vs. stock sale; often subject to negotiation

Weighing the Trade-Offs

Why Owners Choose an Internal Sale

  • Preserve the company culture, brand, and relationships built over decades
  • Reward and retain loyal employees or family members who helped build the business
  • Maintain a gradual, mentoring transition rather than a sudden exit
  • Keep the sale confidential, without exposing financials to outside parties

Why Owners Choose an External Sale

  • Maximize sale price, particularly when a strategic buyer will pay for synergy
  • Receive more cash at closing rather than relying on a buyer’s future payments
  • Achieve a cleaner, faster exit with less ongoing financial or operational risk
  • Access buyers who bring capital, infrastructure, or expertise to grow the business further
A Note on Value

An internal sale and an external sale rarely produce the same number on the closing statement. Internal buyers are usually financing the purchase from the business’s own future cash flow, which caps what they can pay; external buyers — especially strategic buyers — can sometimes pay for value the internal team cannot. Knowing your business’s true worth, and the gap between internal and external value, is the starting point for choosing a path with confidence.

Questions to Guide Your Decision

  • How important is it that the business stay in the family or under existing leadership?
  • Do you need maximum cash at closing, or can you accept a phased payout over time?
  • Is there a capable internal buyer — and can they realistically finance the purchase?
  • How much risk are you willing to carry if you finance part of the sale yourself?
  • What matters more to you: the highest possible price, or the legacy of who runs the business next?
  • How much time do you have before you need or want to exit?

Bringing It Together with the GWT Planning SystemÂŽ

Deciding between an internal and external sale isn’t a decision to make in isolation — it’s one piece of a broader Growth, Wealth, and Transition plan. The right path depends on where your business stands today, what your personal and financial goals require, and how much runway you have to prepare. A well-built transition plan builds real, transferable value into the business long before a specific buyer — internal or external — is identified, so that whichever path you choose, you are negotiating from strength rather than necessity.

If you’re weighing your own exit options, the most valuable next step is an honest assessment of where your business stands today against both paths — so the choice is one you make deliberately, not one that gets made for you.

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3 Let have a conversation

4 ARTICLE THE ONEWAY BUY AND SELL AGREEMENT

The Interplay Between the Funding Mechanism And the Valuation? 

Featured by YOUR BUSINESS WORTH, posted in Buy and Sell Agreements, Company Wealth, Funding your Buy and Sell, Selling Your Business, Uncategorized, Valuation

What happens when life insurance proceeds are part of the funding vehicle of a buy and sell agreement (BSA).    

 Example 

 When a stockholder owner dies and life insurance payments are made, is the valuation of the stock being redeemed as part of the value of the company?   

The way life insurance benefits are treated in the buy and sell agreement (BSA), could lead to different estate treatment and income tax.    In both areas, the results can be dramatic.     

 Does the agreement tell the appraisers how to treat the life insurance benefits in their valuation?  Does the agreement provide for the company to issue a promissory note to a deceased shareholder, and what are the terms? 

 Keep in mind, the agreement is no better than the ability of the parties and/or the company to fund any required purchases at the agreed upon price.    An agreement that is silent on this issue is like not having an agreement.  

 Life insurance  

 Generally, life insurance premiums are not deductible, and the pass through of non-deductibility can create pass-through income for the shareholders of S corporations, and the owners of partnerships and limited liability companies.  Knowing how to treat the life insurance premium for tax purposes would be important information for you.  We suggest you discuss this with your CPA.  

 Although the life insurance premium is not deductible, the death benefits generally are tax- free, notwithstanding the alternate minimum tax treatment for C corps.  

Keep in mind the funding mechanism is not actually necessary to define the engagement for valuation purposes and has nothing to do with appraisal standards or qualifications. It provides the funding for the company to afford the value, and to make sure the selling stockholder receives the value.  In essence, it’s the mechanism to fund the liability of the contract, or at least part of it.   

Wants and Needs of the Buyer and the Seller- The normal push and pull!  

The seller wants the highest price and the buyer wants the lowest price.   Without a doubt the best time to set the price would be prior to a triggering event, when both parties are in parity and neither is the subject of the trigger.  It is the best time when both parties will be the most reasonable in setting the rules of the agreements as they are both fair minded in the negotiations.   

 Funding Methods 

  1. Life Insurance:  In most cases life insurance will be the most inexpensive method for funding the death benefit part of the agreement, when comparing, self funding, and loans (including corporate promissory notes) to fund the liability, notwithstanding the ability to get a funding loan from a loaning institution.    In most of the comparisons I have done over the years, life insurance is the least expensive, most guaranteed, and the easiest method of funding for death benefit purposes. 
  1. Corporate Assets: They would have to be accumulated for this purpose, and would likely be included in the valuation, and also would be subjected to taxes during the accumulation stage.  What if the death of the stockholder occurred early after the agreement?  Would there be funds available to fund the liability of the agreement, as there would be a lack of time to accumulate the necessary net profits for the funding?   
  1. External borrowing: Depending on the company’s financial position, it may be possible to fund the purchase price by borrowing.  However, this should be negotiated in advance and before its needed.  Remember, the time to requests funds from an institution is when you don’t need them.  Also, on the other side of this funding element, is the possibility the loan covenant requesting the outstanding note balanced to be called in when there is a dramatic change in ownership and management.    The lending institution may be questioning the ability of the company’s future financial position and the ability to stay profitable.   
  1. Promissory Notes:  If this is going to be used, the terms of the notes should be in the agreement.  Although cash payments are preferable to the seller.   
  1. Combination of cash and promissory notes: Important to note:  Anytime capital is being used by the corporation, it is important not to unreasonably impair the capital of the business. Many state laws prohibit transactions that could impair capital and raise the question of insolvency.  

Without the mention of what funding mechanism is being used in the agreement to repurchase shares, lessens the value of the agreement.  Also, with stated funding, the economic or present value of the redemption price set by the agreement can significantly be reduced, because of inadequate interest or excessive risk leveled on the selling shareholder.   

  

Weak terms in the agreement of the funding mechanism diminishes the value of the agreement from the sellers prospective. However, terms that are too strong can taint the future transactions. What is clear is that it is essential for the parties to discuss the funding mechanism for the triggers of a BSA, keeping in mind both the sellers value position and the purchaser’s ability to fund the costs. 

THE SECRETS OF BUILDING A GREAT ORGANIZATION

by YOUR BUSINESS WORTH, posted in Company Wealth, Inside Sale, Key People_Or Group, Passive Ownership, Selling Your Business, Strategies of growing business, Uncategorized, Value drivers, Working On Your Business

I recently read a book called,” The Secrets Of Building A Great Organization”, by Bruce Clinton owner of BusinessWise, L.L.C., a business consulting and coaching firm based in Connecticut.

I found the book to be very interesting because, not only does it provide a road map of management for newer managers, but it re-educates older experienced managers in the most up to date strategies.

Bruce is the first person to mention that there are no magic formulas in being a good manager, however, with the basic strategies that he covers, a good manager, through their own talents, can become a great manager using the strategies Bruce discusses.

Many of the strategies are ones that Bruce uses in his practice as a business coach, and strategies developed while he ran different businesses.

For anyone who is a business owner or running a business, I would suggest this read.  In the book it is mentioned that most business owners don’t consider themselves good managers or they feel they don’t know enough about managing.

Any business owner who does $1-$150 million in annual sales, has 8-200 employees, is family owned and may be facing growth or succession issues, should read this book.

What I really enjoyed about the book is the small details that Bruce covers which are needed to build a successful business.  These are details which are not normally discussed in detail.  The book covers the importance of them.  These are the small details that make all the difference in the world of a business’ success, and Bruce covers them extremely well.  For example:

  • Overcoming communication breakdowns
  • Dealing with levels of incompetence
  • Fitting family members into the business
  • Retaining good employees
  • Building a workable succession plan

Continue reading “THE SECRETS OF BUILDING A GREAT ORGANIZATION” →

Why Use Non-Compete Agreements!

by YOUR BUSINESS WORTH, posted in Buy and Sell Agreements, Funding your Buy and Sell, Income from your business, Inside Sale, Key People_Or Group, Selling Your Business, Uncategorized, Valuation, Value drivers, Working On Your Business

Non-compete agreements (NCA) represent a separate agreement. They could be in an employment contract, or as a separate article in a buy and sell agreement. Sometimes they are referred to as “Covenants not to complete. “

This is based on the possibility that an employee can do harm to a company upon termination.  They could know sensitive information about the company’s operation, owners and employee’s personal information, special operations, and proprietary information to a competing advantage, along with so much more.

Picture a very long-term employee working side by side with the owners, for many years, and then leaving to work for the owner’s competitor.  Certainly, there can be issues.

No compete agreements (NCA), can be used to retain employees also.   It would be very difficult to change jobs within an industry or profession when the leaving employee is limited to compete in a geographic and specific industry for a period of time.  However, non-compete agreements are hard to enforce, because in many instances the agreement has overreached and is very broad in the definition of industry and geographic coverage.

Continue reading “Why Use Non-Compete Agreements!” →

The Major Reason Why Business Owners Don’t Plan For Maximizing Their Business’ Financial Potential Is Now Eliminated!

by YOUR BUSINESS WORTH, posted in Company Wealth, Strategies of growing business, Uncategorized, Value drivers, Working On Your Business

Many business owners spend the majority of their time running their businesses and inadvertently end up neglecting some of the more important aspects of their business. This is the time where all the details of the success of your business are planned. We call this “working ON your business”.

Business owners can be vulnerable to financial mistakes because of many factors.

One of the key details of a business owner is what happens to their business in the following scenarios:

  1. What happens if I die?
  2. What happens if I become ill, or have a long-term disability?
  3. What happens if I lost my key person, or my key group of employees?
  4. What happens if I can’t control cash flow, or just don’t want to run the business any longer?

Unfortunately, many business owners don’t spend the time working on their business for many reasons.  Many owners think it’s expensive, complicated and very time consuming.

The truth is that by not working on their business, should any of the above scenarios occur, the consequences would be much more expensive, time consuming and potentially devastating.

In our planning practice, we estimate the average time to create a business and estate financial plans for a business owner, is five to ten hours, not including time with attorneys and accountants who are a part of the team.

How does our process work?

Our system is built around planning with the least amount of time needed for the business owner’s time.  To do this we use technology in communication such as phone conferences, video conferences, and audio and video productions to explain our client’s situation.  This allows the business owner to eliminate using work hours for this project.  We can do this technologically with clarity and brevity.  Our plan is focused on brevity for the business owner.

Our Process: 

  1. Viewpoint Meeting: Define what are some of the areas of concern using our Viewpoint System.  This is a 30 minutes conversation.  Our business owners need about ten minutes to prepare using this aid.
  2. “The Selection Meeting”. Once we define the areas of concern, we dig deeper with a 45-minute Selection Meeting. This is where we discuss all of the possible areas where the client may have problems and concerns.
  3. “The Planning Stage” is the longest meeting. This is about 1½ hours.  Prior to the meeting, we send our client material which they can review and prepare on their own time.  This takes them about 20-30 minutes to complete.
  4. The Discovery Meeting is about one hour where we bring together our findings based on their personal situation and discuss which issues and direction of implementation the client may wish to go. Again, our client receives the information to review prior to our Discovery Meeting[i].
  5. Implementation Session: This is where we start implementation needed to solve the issues.  This is the time when all of the client’s advisors work together to get the planning completed.  For example, our findings are discussed with the professional team and look for their advice and suggestions.    Also, this process brings everyone on the team up to date on the business owners’ situation.  This process breeds new ideas and strategies (earlier in the process, I would have been in touch with these advisors between the Discovery and Implementation Meeting). This may be the first time the client has had all of their advisors working together and sharing knowledge about the business owner! 
  6. Semi-Annual or Annual Review:  This is where we move on to the next area of concern; One concern at a time (in some cases, there may be overlapping of concerns and they can be bundled in the planning).  If there are no additional concerns, we review what has been implemented. This is an automatic process, so we are always adjusting as the business situation changes.

For business owners who realize that they need work  on their business, our process can maximize their business’ potential profit, organize them in a timely fashion, and fine-tune them in the future, so they can maximize their “business potential value” when they exit from their business.

[i] We plan for this time, but do not limit this session to a time schedule.

Critical Questions That You Need To Answer If You Own A Business!

by YOUR BUSINESS WORTH, posted in Buy and Sell Agreements, Funding your Buy and Sell, Inside Sale, Uncategorized, Valuation, Value drivers, Working On Your Business

Building a business is hard work. Protecting and preserving it is even harder and overlooked by business owners.

While many owners expect family members to take over the business (69%), very few have actually made plans to make sure their wishes are accomplished (26%), even though they realize the importance of estate and succession planning as is an integrated part of that planning.[i]

A succession plan is complex, time consuming and involves attention to details along with many hard questions which need to be answered for a comprehensive and effective succession plan.  It is also the key element in maximizing the return on the investment of your business. This is the big financial payout, the sale of your business.[ii]

SOME MAJOR QUESTIONS AND ISSUES TO ASK YOURSELF!

What if a shareholder wants to sell their interests?

  • Is there a right of refusal for the other owners?
  • What are the financing arrangements?
  • What are the recourses if you fund the buyout especially if the funding is over a long period of time?
  • What is the arrangement if the business fails, how will you get your money if you financed the sale?

 Who steps in your shoes if you want out? 

Not everyone has the luxury of leaving a business when and how they want to.  Things like death, disability, and situations are uncontrollable.

  • What are your contingency plans when a trigger occurs (death, health, non-voluntary situations)?
  • Do other members of the firm have access and authorization to use funds to keep the business going if there is such an event?
  • Does your family take on personal obligations for financial notes and loans you have signed personally to fund your business operation?
  • Do you have estate documents and health care directives, should you have a disability or become incapacitated?

Taxes- and the planning for them Continue reading “Critical Questions That You Need To Answer If You Own A Business!” →

Business Valuation After The 2017 Tax Cut And Jobs Act

by YOUR BUSINESS WORTH, posted in Company Wealth, Selling Your Business, Uncategorized, Valuation, Working On Your Business

Because of the Tax Cut and Job Acts of 2017, the marginal rates are lower.  The impact of the recent tax cut is very straight forward.   Lowering the rate, means a higher after-tax cash flow which translates into higher value for businesses.

Business owners know their business better than anyone.  That being said, you would also assume they would know the value of the businesses? Not so fast!

Knowing your business and knowing what you think it is worth in reality can be two separate issues.  If it were that simple, appraisers would not be needed, but they are, and they play very key role.  They arrive at a fair market value after taking many facts into consideration.

Valuations; “The Walk Way Number”

The “country club” concept of a business owner having a number in his/her head as to what they would take, if offered, offers some interesting conversations during happy hour!

Over the years I have spoken to business owners, and periodically I have been told that the owner has a figure in their head, and if they were offered that figure for their business, they would take it!  They seem to know their business better than anyone, so it is reasonable to believe they have a handle on the value of their company.   In more cases than not, that figure would allow the owner to go and do what they want in life as it would give them the capital needed, and the can walk away from the business.

However, there are some different sides to this concept!   A more logical way of knowing the business value!

Continue reading “Business Valuation After The 2017 Tax Cut And Jobs Act” →

Get Ready Now To Sell Your Business Tomorrow!

by YOUR BUSINESS WORTH, posted in Buy and Sell Agreements, Income from your business, Inside Sale, Strategies of growing business, Working On Your Business

To get ready to sell your business, you will need to start preparing years in advance.  It’s like wanting to sell you home, you don’t know when, but you know you wish to sell it.  It could happen years from now or it can happen tomorrow.  Key to Success of selling your business!   Be ready at all times !   

 Some things to decide  

This is not a complete list, but it is a list of things to start the process of selling your business and marketing decisions.  

 Establish preliminary exit objectives 

  • Prepare for life after retirement 
  • Get market information  
  • Start working on your team-intermediary, investment banker or broker 
  • Review value drivers and what to do to enhance them  
  • Get your employee prepared 
  • Start your tax planning (this takes time to position yourself and organization 
  • Implement the incentive plans and stay bonuses 
  • Market to potential buyers  
  • Establish  a departure date 
  • Define what you need for your financial security from your business 

 This  is only a brief list of what you need to start working on before you sell your business.  Keep in mind that the sooner you start the better the chances or selling with more potential profile.  There is a lot of work to do if you wish to extract from your business the highest possible potential profit from your business.   

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