If you’re like most business owners, your company is the largest single asset in your portfolio. Doesn’t it make sense to put some extra effort into the largest single financial transaction of your life?
It’s a proven fact that businesses perform better with a plan. The same is true for the sale, succession or transfer of a business. Developing a step-by-step approach to your exit generates higher prices, easier financing, and greater control throughout the process.
The Exit Map® is the process I recommend for planning your transition from the business. It is a comprehensive approach that includes assessment and planning for Maximizing business value, Tax Planning and Reduction, Developing and retaining key employees, Risk Management, Identifying your transition strategy, Documentation, Preparing the business for the target successor, and Estate coordination. Learn more
Another Lost Generation?
I had the opportunity to present "Beating the Boomer Bust" twice this week, one of which was recorded for a Texas Public Radio show this weekend. For those who aren't familiar with the piece, it discusses the massive changes that are unfolding as Boomers retire from their businesses. As usual, members of the audience said afterwards "I knew all those things, but I never thought through the implications before." A quick recap before I get into today's topic. "Beating the Boomer Bust" is a look...more
Do Goals Make a Difference?
To start the New Year right, let me tell you a true story about a goal. It was a little goal; or at least it started out that way. It certainly wasn't a goal that was intended to be life changing, although it looks like that will be the result. For the next few weeks my morning workout at the gym will be tougher, as I'll have to get to machines around all those folks who will dissapear by mid-February. It's a new year, and millions of people will make tens of millions of "resolutions" that have...more
When is the Right Time to Sell?
In the last few weeks I've had several conversations with owners about selling their companies. In one case a professional firm with whom I've worked for the last 4 years completed a merger with a large national company. That was a "Boomer Bust" transaction, driven by an ageing partner group and a lack of willing successors in the next generation. In another, a relatively young client received an unsolicited offer for the company. He wasn't planning to sell for at least another ten years or so...more
Three Circles of Family Business
What is a "Family Business?" A large percentage of small companies have some family involved. For most, it is simple a case of providing employment to family members. If the founder of the company is also the principle revenue generator, it may be a spouse (most often the wife) who keeps the books and runs the office. Employment of children who can't (or won't) find another job is common, and more so in the current economy. In most instances it is just a matter of income transfer with some value...more
Fighting on Level Ground
Poland has been conquered numerous times in history. Since the 11th century, it has been partially occupied, partitioned, or fully subjugated by the Germans, Russians, Austrians, Mongols, Tartar Muslims, French (under Napoleon), Prussians and Hungarians. The Poles aren't a timid people, and they have given good account of themselves in numerous battles. Their role as repeated door mat is largely due to a single factor. Bad luck. First, Poland straddles a historical divide between western Europe...more
"When everything is flat, you can see a long way."
That statement was made by Van Palmer of Palmer Technology Systems after a lengthy discussion about economic trends. It perfectly describes why we should be positioning our businesses differently from how we did it at the end of previous recessions. Since World War II, the United States has enjoyed a growing number of working adults as a percentage of the population. This was an effect of both the baby boom, which added 58% to the US population in only 20 years, and the baby bust, the trough in...more
It's Time for the Boomers to Step Up
Why I Need to Say This Three years ago I wrote an open letter titled "Last Chance to Save America" and sent it to my entire email list. It went viral, and I received almost a thousand emails in reply. I also promised not to send another letter to my entire contact list, ever. So today I am using my blog, with the hope that you will forward a link to others if you agree with me. Like before, discussing a complex and important issue can't be done in a few hundred words, so please bear with me....more
Recessions, Recoveries Bring Out the Sharks
This article appeared in the San Antonio Business Journal on Friday, March 4thA number of our business owner clients have been calling lately to ask about an offer that seems too good to be true.The owner gets a call saying that a top business consultant will be in the area a few weeks from now. Although this consultant typically charges several thousand dollars a day, he has noticed an opening in his schedule. Rather than be idle, he is willing to take the time to do a complete assessment of your...more
Lifestyle or Legacy - Part 4
Last week a client told me "You are wrong. I have a lifestyle business that is ALSO a legacy business." Sorry, but that doesn't fly.He has built a good company, and continues to improve it. Be he is not driving to make it into something that carries on beyond him. His objective is to (eventually) make it large enough to be acquired, and for enough money to live in luxury for the rest of his life.That is a lifestyle business. It's only purpose is to fund the financial aspirations of the owner...more
Lifestyle or Legacy - Part 3
Let's turn to the Legacy Builders.They are the business owners who have achieved Lifestyle status (as defined in the last posting) but continue to work hard to build their businesses. Their objective is a company that does far more than merely provide a comfortable lifestyle and assure retirement.A little bit of elimination to start, as we did with the Lifestyle owners. Just as we said a Lifestyle Business was neither a pumped-up hobby nor merely an adjunct to an alternative lifestyle, the...more
Lifestyle vs. Legacy - Part 2
Let's define a lifestyle business. For our purposes, I'll start with what it isn't.It's not the small retail store being run by someone who doesn't need the money. A few years ago I was on a judging panel for a business award. One of the finalists told her story of how she struggled and labored to build her company. I was getting pretty impressed, until she mentioned that she hadn't turned a profit until her 13th year in business. Fortunately, she said, her husband was a prominent surgeon and...more
Lifestyle vs. Legacy - Part 1
There are three types of business owners. The first, which encompasses the vast majority of small businesses, is the one who simply wants to make a living from running his or her business. They dream of the day that they can take vacations without worrying about the impact on their companies. Sometimes the biggest goal is to go home at five, or just to sleep through the night without worrying about the next day (thus the name of this blog).But if you are tenacious, if you execute on your plans and...more
In the long run
I met with a business owner the other day who has experienced a particularly difficult year. A confluence of economics, technology and criminal activity in his industry has kept him working long hours, with relatively little to show for it. He is fried. Burned-out. Constantly wearied by the "fight or flight" adrenalin reaction of tensing up every time the phone rings (because it is so often more bad news.) The company isn't failing financially, but it is failing culturally. People are abandoning...more
Small Business can Sell in a Recession
This was an article I had published in the San Antonio Express News yesterday.Guest Voices: Small businesses can sell in recessionMany business owners think that the current recession has ruined their exit strategy. While the climate may be more daunting for budding entrepreneurs, there are still plenty of buyers around for small businesses.For Main Street businesses (those selling for less than $3 million), buyers chiefly are driven by personal economics. They are seeking a business as a way to...more
