A Private Equity Perspective on Budget Planning It’s time for the next stage of business ownership: Bringing on an investment partner. Finding the right fit is an inexact science – some combination of due diligence, reference checks, and “gut feel.” These ten questions can help sellers find the right match for their personality, business style, and future goals. Read the article: A Private Equity Perspective On Budget Planning_ INSIGHTS from Prospect Partners
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So far Laura Wright has created 43 blog entries.
When Was Your Last Independent Business Insurance Review? Bill Goddard, CPCU, Principal, Insurance Advisory Services Business owners, CEOs and CFOs have enough on their plates – being experts about their business insurance policy is rarely at the top of their list. Coverage often goes unchallenged and unexamined for years until something prompts a closer look. That could include being asked about the business’ coverage by a board of directors; undergoing a large business change that requires different coverage; or, unfortunately, disaster striking and learning there isn’t adequate coverage. A business should undergo an insurance review every three to five years to [...]
Virtual Data Room outsmarts Seller saving Buyer $1.3 million and the Deal By D.M. (Doug) Robbins FCBI, M&AMI, CM&AA, MCBC, CSBA, CMEA (GRIMSBY, ON. CANADA) Virtual Data Rooms, also known as deal vaults are being utilized by many M&A Advisors for convenience and efficiency. The encryption and secure communications for uploading and downloading electronic documents with sensitive information is a key consideration of all virtual data room users. Confidentiality is especially a concern of Sellers and Buyers during the exchange of information for due diligence and for the communication of purchase documents. Since 2003, US Healthcare professionals have been using [...]
Success to Significance: Starting a New Future after the Business Exit By Laura Malone, CAP®, CEPA, VP-Corporate/Complex Giving American Endowment Foundation The scenario may be familiar. A business owner arrives at their financial advisor’s office looking to exit their business, but unsure how to get the most financial benefit from that exit. A topic that both the business owner and financial advisor often miss out on is an understanding of how a charitable plan can help the owner build something of significance beyond their business while enjoying tax savings and preserving their wealth. What many financial advisors don’t realize about their [...]
For buyers seeking acquisition financing, an SBA 7(a) loan can be a fantastic tool. Relative to conventional loans that typically require down payments of 30% or more, buyers utilizing SBA loans can make a down payment of 10-25% (more on this later), and obtain a low fixed rate (a small amount above WSJ prime rate) with payments amortized over for 10 years with no pre-payment penalty. While the SBA lending process can be opaque at times and can subject the parties to uncertain timelines and potentially modified deal structures, the process worked very well for one of our recent clients, a [...]
Is your client’s company one of the many in the United States that is experiencing a rapid increase of exported goods? Exporting creates an opportunity to use a tax savings strategy by creating an Interest Charge – Domestic International Sales Corporation (IC-DISC). Not just for large C-Corporations, an IC-DISC applies to small/medium pass-through entities as well. If your client’s company’s export revenue averages $1 million per year and/or is projected to be growing in the future, they should explore how an IC-DISC can result in a significantly lower tax bill for your client’s organization. What is an IC-DISC? An IC-DISC is a [...]
Background Representations and Warranties insurance (“R&W insurance”) helps secure investments and enhance returns. Concerns about known and unknown risks can prevent a deal from closing or leave buyers with unwanted liabilities, placing both sellers and buyers at risk of not realizing their desired goals. The use of this insurance can protect buyers from losses resulting from a breach of the seller’s or target company’s representations in a purchase agreement, thereby eliminating the need for a robust indemnity. It also allows sellers to walk away cleanly from a deal. Representations and Warranties insurance is a proven tool that can allow deal professionals [...]
Secrets of Market Multiples in Valuation Ever wondered why two seemingly similar companies sell at significantly different multiples? What are buyers considering in ostensibly comparable companies that cause sale price differences? Let's discuss five key secrets of market multiples: 1. Revenue/Earnings Growth Potential Buyers are willing to pay more for companies with high growth potential than companies perceived as having low growth potential. The reasons are those high-growth-potential companies: • create exceptional customer value; • exploit high-growth market segments; • are innovative; • have a strong brand identity; • create service differentiation; and • invest in the development and delivery of [...]
Why “One (Buyer) Is the Loneliest Number” You own a successful business that you’ve grown through the years. You’ve just recently thought about selling. Lo and behold, another business in your industry approaches you to see if you’d like to sell. What great timing and what an opportunity, right? Wrong! If you are serious about selling your business, you need to go to market and not settle for one buyer. If you focus on just one buyer, you’ll be going down a path with no leverage. Here are 4 reasons why you do not want to talk to only one buyer [...]
Due Diligence: Preparation Saves Time and Money When talking about selling a business, we talk a lot about a buyer doing their due diligence. What does that mean for the seller? What will the buyer be looking for? The answer is actually contained in a long and thorough checklist. As a seller, it means you must be prepared to present paperwork or reports that answer due diligence inquiries, and that any area where you are not prepared can potentially delay the sale or worse, derail it altogether. This is one of the reasons due diligence is such an important thing to [...]