Structuring Small Business Sale Transactions

Selling a privately held business is often romanticized as face-to-face negotiations over business valuations and purchase price. Whether small or large, business transactions can be extremely complex and require a great deal of work behind the scenes. As the size and/or complexity of a transaction increases, the need for innovative structuring options also increases. Deal structure, financing, and tax management must be a proactive process that is addressed at an early stage. In many cases the Seller and Buyer often place all of the focus on the transaction price at the expense of the ‘net results’ of a business transaction. By carefully negotiating the terms and structure of the transaction, a business seller could walk away with a deal that provides a significantly larger economic benefit than a transaction that provides 100% of the proceeds at closing. For asset sale transactions, the ‘allocation of purchase price’ can become another area of negotiation after the price, terms and conditions of the sale have been agreed to by the buyer and seller. Each type of structure carries with it different tax consequences for the buyer and seller, having a material impact on the overall value of the transaction. The type of business entity owned by the seller (C-corporation, S-Corporation, LLC, Partnership, or Sole Proprietorship) in addition to whether the transaction becomes an asset sale or stock sale will have a major bearing on the decisions made in structuring the transaction to afford maximum economic benefits. The purpose of this communication is to advance a few of the techniques available in structuring small business sale transactions and to emphasize the value an experienced team brings in structuring the transaction. Asset sales of pass-through entities (LLC, S-Corp, & Partnerships) are handled very differently than stock-sales of C-Corps and it would be impossible to cover all of the structuring alternatives within this short document. Proper legal and tax counsel should be retained and the cost of these professionals is usually offset by the benefits they bring through their involvement in the transaction.

Exit or Succession Planning For Small Businesses

At some point in time in time every business owner will “exit” their business. In most cases, a small business represents a significant component of family wealth and the owner will be keenly interested in maximizing this value when the business is either sold to an outside 3rd party or key employee, or transferred through an orderly succession to a family member.

Unfortunately, most entrepreneurs are so immersed in the daily demands imposed in operating their company that they have neglected to properly plan for the inevitable transition of their business. The goal of this article is to briefly review the exit/succession planning process and highlight the importance that these plans have for every business owner. Whether the goal is to exit the business in six months or ten years, it is critical that a business owner recognize that succession planning is the single most important way to take control of the terms and conditions of exiting their business. Proper exit planning will reduce the variability of the business control transfer, and can secure a sound financial future for their family.

WHAT IS EXIT PLANNING?

Exit Planning, also commonly referred to as “business succession planning,” is a methodology that addresses three critical questions a business owner will face at some point in time:

1. What is the timetable the owner seeks to exit the business?
2. Who will succeed the owner when the business is transitioned or sold?
3. How much income is needed from the business transition/sale for retirement?

The Exit Plan becomes a written roadmap that is developed in conjunction with legal, accounting, and financial professionals and is designed to maximize the value an owner receives when exiting the business. Exit planning can be a fairly complex long-term process and take many years to properly implement. The process can be broken down into succinct action items and deliverables and should illustrate how value can be received at a very early stage. A professional team will bring efficiency to the process by implementing a basic structure of steps to be followed, and can insure that the experience will be a personally gratifying and financially rewarding endeavor for the owner.

The key steps involved in developing an Exit Plan include:

1. Establishing Exit Objectives

• Determining the retirement timetable, long term income needs, and financial requirements necessary to reach them.

2. Identify the key drivers of business value

• What is the fair market value of the business if it were sold today?

3. Plan to build & preserve business value and reduce risks

• Activities that can be implemented to leverage best practices and maximize the business value.

4. Transfer of ownership, management, & control

Starting a Business For the Wrong Reasons

Statistics has it that 95% of businesses fail within it’s first 5 years, and 80% of businesses that survive pass the 5 years period will eventually fail.

Why do businesses fail (and this include online businesses such as a website/blog like this one)? One reason is because most entrepreneurs start their business for all the wrong reasons. It is nice to think that once you open the doors to your business, that you’re soon going to get rich. But it’d never work that way for anyone. Are these the reasons why you want to start a business:

To make a lot of money and never have to work again.
So you can have more time with your family and friends.
You are your own boss and no one can tell you what to do.
If these are the reasons why you want to start a business, you are not wrong, but this is what everyone else wants out of their business and most of them have failed again and again. So, try to consider the follow reasons why you should start business, and I hope this can solve some entrepreneurs’ headache:

1. You Believe in Your Business – This phrases is talked about many times, but most people only start a business because they saw someone else start the same business and gain success. They don’t believe in what they’re doing. All they want is to get rich as quickly as possible, so they can sell their business and be done with it. I know, because I was like that before, and still somewhat like that now. It is a poison that will kill any business. It is alright if the business your passionate about is already done by so many people; for example, I like network marketing, so even after I’ve been told many times not to start a “network marketing” website because there are already so many “network marketing” websites out there, I still do. Just make sure that you love what you’re doing and based on educated investigation, have strong believe that your business will fulfill a “real need” in the marketplace.

2. You Are a Leader – You have the skill and courage to take charge when an intelligent solution is needed. You are the tribal leader and everyone wants to follow your lead. You are most knowledgeable when the situation gets tough. You care about your fellow man and show this in your honesty and integrity. You get along with and can deal with difficult individuals.

3. You’re in Good Health – You exercise regularly and have the mental stamina to withstand challenges that might cause your business to fail. It is often overlooked, but health issues is the cause of many business failures. The reason is quite simple, if you’re running a small business and you’re in the hospital for sometime, who else will look over your business for you. Family members and friends? Can you really trust them with your business? Do they know how to operate the business in an effective way? Also, you can lose business deals if the companies you’re partnering with know that your incapable of watching over your business because of your poor health issue.

4. You Have a Strong Will – Failures can’t defeat you because you will just get up and start again. Many businessmen and businesswomen fail horribly, but they just get back on their feet and start again after learning from their mistakes. For example, Donald Trump was once in debt 900mil dollars and his businesses nearly went bankrupt, but he never backed down, and evidently he made it back to the top. He’d paid off all his debt and now he’s a multi-billionaire. So, even if you fail, learn from your mistakes and use those lessons the next time around. You have the drive, determination, patience and a positive attitude to succeed.

Facebook Etiquette for Business

Your personal Facebook and Facebook business pages should remain separate, with no crossover. There are different etiquette standards for each. Of course, there will be times when you have a Facebook friend who is also a Facebook fan.

Many business owners (the same business owners who initially only considered Facebook to be a social media site that they forbid their employees from using during work hours) have discovered its potential for extremely effective selling and business relationship building.

Your content in the two different types of Facebook accounts should be different and the communications that you have with that person should be different as your fan than as your friend.

Should you build your social media marketing campaign through your personal Facebook or your Facebook business page? When it comes to social media, there is a great deal of subjectivity; however, some of the options will be presented to you here so that you can make an intelligent and informed decision when it comes to social media and what is most appropriate for your particular business.

The benefits of a Facebook business page

If you publish content on your Facebook business page, you have a good chance that it will be included in search engine results, which may, in turn, strengthen your chances of good search engine optimization (SEO).

Facebook Insights (analytics) allows you to measure and monitor your effectiveness on Facebook. For example, if you notice that your postings are being hidden from the newsfeeds of one of your fans, your content is not effective.

If a person wants to become your fan on a Facebook business page, he or she does not have to display his or her personal profile to be able to connect with your business. This eliminates the privacy concerns that many people have.

There are many things that you should do when you have a Facebook business page to generate more business. There are also things that you should not do when you have a professional page because it isn’t polite and will not produce any positive results.

IPTV Technology Simplified

IPTV technology is the latest in innovations for getting the daily communications that people thrive on and enjoy. You may have heard of the ever-popular Voice over Internet Protocol (VoIP) phone service from companies like Vonage. Well, to make this easy to understand, IPTV is the same, only with television over internet protocol, instead of voice. Ultimately, TV can be watched anywhere through a broadband connection with IPTV, which makes it a very popular choice for those looking for the latest and greatest in new technology. Telecommunications companies are looking for new revenue, and they have found it with this process.

IPTV technology is based around a similar system to that of cable. There is the need for a computer or a set-top box of sorts so that the images can be transmitted, decoded, and then sent out to the television in a format that can show them properly on the screen. This type of broadcasting can be done by a simple broadcast or multicast if someone is trying to get a channel out to everyone. However, it can also be done on an ‘on demand’ basis, where people are able to stream material to just one or two subscribers who have requested the show or material in question.

Maintaining The Technology

There is a lot of work and technology that goes into maintaining IPTV technology. Streaming over broadband needs to be done efficiently and in a format that will allow for the seamless transition of the data that is being sent. The process for using IPTV involves lots of splitting, encoding and distributing efficiently. The provider end is very complicated, but for customers it is a simple tool to use. Channel selection for IPTV is executed via a membership format known as IPGMP, or IP Group Membership Protocol. Due to the data transmission, this makes sending multiple channel signals and changing channels much simpler than it might be otherwise.

The New Kid On The Block

IPTV technology is still relatively new, but it is a popular item for those who are looking for the latest technology. Of course the quality of service is vitally important to the customers, and is something that must be maintained correctly in order to make the service a viable means of viewing television. As the popularity of IPTV increases and so does the number of users, the improvements and quality of the services provided will follow suit. In time, providers will have a lucrative new way to attract business when other products are growing stale.

A Better Understanding of Touch Screen Technology

Who would have ever thought in their wildest dreams that we would have advanced to have Touch Screen Technology. Some of you may be wondering what that exactly is? Touch Screen Technology can be defined in its simplest form as technology that can sense and feel touch within the display area. Examples of touch screen technology include; ATM’s, Kiosks, Medical Devices, Car DVD’s, and PDA’s. These are all common things that many of us use throughout our day to day lives. However, what if you’re not that familiar with it, and you or your business is in the market to take full advantage of this technology? You could and should be wondering where do you go from here in order to find the right kind of Touch Screen Technology that fits your wants and needs?

Many factors will come into play when searching for the right kind of Touch Screen Technology, such as; what do you need it for, what size screen do you need and who is going to be using it? That’s why it’s important to understand that with this Technology that you should list out the specifics of product usage to a tee. The reason being is that there are so many important and key details that can and will put you ahead of the game, when it comes to have a greater breadth and depth of product knowledge. Also, since this is generally a market where most people are unfamiliar with the technology, it’s good to stay one step ahead of the game, to avoid being scammed or being talked down to.

The main thing to remember is that Touch Screen Technology can be useful for both personal and professional use because it has a great many conveniences, features, and attributes that are extremely beneficial from an all around perspective. Although, it is important to remember to do your homework and that you can always learn something and learn more when it comes to this Technology. By understanding this technology you can truly optimize it for your businesses or for your personal usage, and that is truly worth the investment.

Technology to the Rescue

In today’s day and age, we have technology all around us. This is a very good thing and a very bad thing. It’s very good because some forms of technology can really help us out in our day-to-day tasks. For example, I’m typing of this article using voice recognition software. I find it increases my article writing speed at least threefold. Also as a secondary benefit I have less spelling errors as well as the voice-recognition software corrects my grammar in a lot of cases. So in this case technology is a really great thing.

But there’s a dark side to technology as well. I’ve worked as an information technology manager for many years and have witnessed this phenomenon firsthand. People will think that they can use technology to fix people problems. Unfortunately this is not the case. For example, I was working with a call center that was having problems with its staff that was answering the phones. The staff would spend excessive amounts of time surfing the Internet and not answering phones. I was approached and asked if I could find some way to monitor and restrict Internet access. It was a reasonable request but first I recommended that they talk to their people. I remind them of the fact that performing such an action could cause further resentment by the people in the call center as they would see it as a policing action.

So instead of addressing the issue at hand the solution will only aggravate the current situation. In the end, the manager of the call center did talk to the people and also reminded the people that they were being monitored and there was an expectation of performance within the roles of their position. This simple speech probably cleared up 95% of the problem. Unfortunately the last 5% required more drastic measures. This is just a quick example I’ve seen this same situation time and time again. People want to use technology to avoid people problems.

So you must always ask yourself, will technology help me here or will cause me more problems because I have a personal problem not a technology problem. On another point, it’s good to listen to people when they do bring new technology to you. You’ll be amazed what people can find the one hand it’s everybody’s work life tremendously. Some of the best recommendations that I’ve seen have come from people worked for me. So taking the time to listen to recommendations by the members of your staff can be extremely beneficial to your organization as a whole.

To conclude, remember that technology can come to the rescue and solve some pretty nasty problems within your organization. But never ever believe that I can fix problems that you have with your people. In this case technology can only escalate the problem at hand.

Technology is the Home Business Entrepreneur’s Best Friend

Do you ever find yourself just completely amazed at how we function today as a society? There has never been another time in history like right now when it comes to what we actually have access to… and the greatest part is it’s all right at our fingertips. In the ever changing and improving world of modern technology, there’s a lot to pay attention to. And at the rate we’re moving, I can’t wait to see what we’re doing in 15 or 20 years from now. Think about this… Richard Branson is adamant about offering space tours…pretty sweet idea if you asked me.

Anyways, for some strange reason, we as human beings are wired to be fearful of the unknown, and one of the things that is most foreign to so many people on this planet is Technology. In reality, there isn’t much to be fearful of. If anything, we should be excited, especially when new stuff comes out and we get to play with all of the latest toys and gadgets. And we should be even more excited when it comes to integrating these toys and gadgets into our businesses.

HERE ARE A FEW THINGS TO PAY ATTENTION TO…

You’ll have to invest some time, energy and effort into understanding how this stuff works. I know, I know… you never even looked at the directions when you were setting up your VCR back in the 80’s but times have changed. Those old habits will not get you very far, so kick that mental programming out of your mind and start to submerge yourself into learning this stuff. Here’s a tip, treat it like a foreign language, and know it will take repetition, time, and focus. But it will pay off for you 10-fold if not 100-fold in the end. Check this out… I went from knowing how to check my email and being able to search for stuff on Google, to 60 days later, having a personal blog, a personal web page for my business to advertise on Google through Pay-Per-Click marketing, a YouTube channel with 30+ videos on it and building relationships on Facebook and Twitter. Not bad right? I did 95% of the work myself. All I did was plug into an Internet marketing training course to learn what to do and how to do it. Not too shabby. So trust me, if I can do it…you can do it. Alright back on track now…next point…
Embracing technology, especially Internet technology, has infinite potential for you in so many ways on both a personal level and a business level. Think about video for a second…you can take a recording of anything… your baby’s first steps or maybe a business meeting, it doesn’t much matter. You can upload that video to YouTube and have it available for anyone to view anywhere around the globe. It will literally take you 5 minutes to complete the process. This type of power and reach is just amazing to see and even more amazing to actively participate in.

Home Improvement Tips to Raise Your Home’s Value

When it comes to home improvements there are various things you can do that will actually increase the overall value of your home. Now, there are rather large projects that you can do like adding another room and major landscaping.

Those will give you a large increase in value, but who has that kind of money to put into a home improvement project just to increase value? Most people want those little tricks and tips that won’t break their bank but will still raise the value.

Some of the small, but unique, things you can do to raise the value of your home is cleaning. When you keep things clean, you are helping to keep them functional and repair free. If you take your bathroom, for example; by keeping the toilet, sinks, and bath or shower clean, you won’t have to worry about replacing them when they break or fall apart.

Instead of going out and purchasing harsh chemical cleaners, you can use white vinegar and citrus juice to get that professional quality shine and clean smell for your bathroom. This also controls germs and bacteria that grow.

Other small renovations can help increase the value of your home; things like new flooring will do a great job of raising the value. You can even throw on a coat of paint, both inside and outside as a value increasing home improvement. If you are going to do major renovations, make sure that you use the appropriate materials, especially if you are looking to try to make it look as the house did when it was first built. With older houses, those built pre 1950, this is a great way to make the value climb to record highs.

No matter what kind of home renovation you decide to do to make the value in your home go up, always make sure that you have all the right papers filed, if you are doing major construction type remodeling. You can also have a contractor come in and give you some ideas as to what it will take to make your remodeling a complete success, even if you are going to do it on your own instead of hiring someone.

Home Improvement Tools For Your Car

If you own a car, it is important that your home improvement tools include those that you can use to fix your tires in cases of minor problems such as a flat tire. This will allow you to save on professional help, since most of these problems can actually be fixed at home. In addition, such car repair tools can also be loaded up in your car when you are going to drive to remote places. Such areas do not have conveniences such as repair and vulcanizing shops, and having the right tools with you will enable you to get out of a tight situation. Such home tools should include a pair of pliers, an adjustable wrench, a jack, a portable tire pump, and a tire repair kit.

A pair of pliers in your home improvement tools can be used for pulling things out of your tire, such as nails. In case you want to lift your car higher off the ground, you can do it with the jack; while the adjustable wrench could be used if there is a need to remove a tire. Inserting tools can be used if you have to insert plug strips or repair strings, and a rasp tool can be used for scraping nail holes. For the adhesive for the plug strips and repair strings, you can use rubber cement. Tools such as inserting and rasp tools, plug strips, repair strings, and rubber cement are included in a repair kit. When you are shopping for a tire repair kit, you would do better by choosing the tubeless ones.

It is always advisable to have the necessary basic tools for tires if you have a car. Some problems are not noticed until you get home; and without such tools, you would have to remove a tire and take it to a repair or vulcanizing shop. But then, if you do not have the tools, it would not be possible for you even to remove a tire. Hence, you should always have basic home improvement tools for your car.