Effective strategic planning for the closely held business owner should begin with a formal valuation. The information gathered and considered in a business appraisal provides insights into the business overlooked in day-to-day operations. Valuation studies provide an insight into the potential value of the business and roadmap to to becoming…
Intangible assets are typically the most valuable possession of a closely held business, but often are poorly protected. Risk mitigation through a business bulletproofing process can protect those assets from being misappropriated. Intangible assets include customer relationships and intellectual property. I sometimes ask closely held business owners if they lock…
The Need to Exit Our Closely Held Business is Non-negotiable. We all leave, eventually. Exit and succession planning protects our business, our employees, and our families. The effects of most business disasters are avoidable. “Hope is not a strategy.” Vince Lombardi If you own a business, you know that ‘winging…
The vast majority of the personal wealth of most business owners is the value of their business. Getting access to that trapped wealth in the owner’s business is a principal goal of a successful access plan. Business owners without an exit plan may never realize the potential value of their…
Business owners that fail to plan for their lives after exiting their business often report ‘seller’s remorse’ and dissatisfaction with their lives. Understanding and planning for the personal after exiting a business focuses on two-part personal question: who we are outside of our business and what are our personal goals.…
Using keyman insurance to fund equity redemptions is likely to increase estate tax liability. US Supreme Court holds that keyman insurance proceeds of company-owned policies are an asset of the company, regardless of a contractual obligation to fund an equity redemption. Cross-purchase agreements funded by insurance should avoid these estate…
Valuing a business on an ongoing basis is intended to avoid valuation disputes in litigation and provide fairness and predictability. Courts enforce contractual language that establish the the value of a closely held business based on valuation reports conducted by the owners for non-litigation purposes. Courts are likely to view…
The benefits of exit planning and succession planning are more than improving the prospects for a future sale at a good price. Closely held business owners that implement the Value Acceleration Methodology can expect to improve profits now and to free up more of their own time. Succession and exit…
When one partner fails to respond to a notice of breach from the other partner, the relationship may be so damaged that dissolution is required. Courts may apply the ‘not reasonably practicable’ standard in determining whether a business can continue in its present form. The ‘not reasonably practicable standard’ is…
Exit planning describes the process of preparing a closely held business for the exit of its owners at its maximum value. It is the preparation and implementation of a plan that maximizes the current and future value of the business. Exit planners help owners understand the true value of their…