Business owners, including business brokers, should take a moment to answer this important question: what happens to the interest in your company when you decide to sell your shares, you become incapacitated, or you are deceased? If your answer to the question is “I don’t know,” you aren’t alone. Many businesses fail to answer these important questions prior to entering into a new business venture with another individual. If a business has already been formed, it is likely too late for a business to incorporate these important what if’s into their by-laws. Furthermore, an amendment to the by-laws is not [...]
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We have all been there. Deals that challenge all parties and seem to have no chance of getting over the finish line. And sometimes, they don’t! By highlighting the experiences of M&A advisors, members will learn key factors to success (and failure) in the M&A world. Our first story is from Milt Anderson, CBI, owner of Sunbelt Quad Cities. Milt has led a team of licensed professional business brokers as the leader in the business brokerage/merger and acquisition field in the Quad City Iowa and Illinois region since 2003. Industry: Restaurant with real estate Price/Terms: $1,450,000 with SBA financing What Happened Sunbelt Quad Cities sold [...]
Integrative negotiations seek to create value and expand the pie Creating value is the name of the game in integrative negotiations and these principles also apply to the highly competitive realm of business negotiations. In the business world, why is competition so often the norm, while cooperation seems like an impossible goal? One of the most destructive assumptions we bring to negotiations is the assumption that the pie of resources is fixed. The mythical-fixed-pie mindset leads us to interpret the most competitive situations as purely win-lose. For those negotiators who recognize opportunities to grow the pie of value (see also, [...]
With travel restrictions, portfolio companies in crisis mode, and a very skittish global economy, now is certainly not the time for investors and acquirers to focus on M&A. …or is it? While the idea of doing deals right now might seem daunting, not to mention logistically challenging (how exactly do you conduct on-site diligence in a shutdown?), there’s an argument to be made for M&A to keep moving forward, despite the circumstances. Data from the global financial crisis (GFC) of 2007-2009 “shows that companies that made significant acquisitions during an economic downturn outperform those that did not,” argues a recent article [...]
Scott Bushkie & his daughter This month, we chatted with Scott Bushkie, CBI, M&AMI, M&A Source Conference Committee Chair, and Founder of Cornerstone Business Services in Green Bay, WI. With more than 20 years in the M&A industry, Scott is a recognized leader in the field, providing exit strategies, sell- and buy-side transitions, along with valuation services in the lower middle market. Over the years, Scott has successfully executed hundreds of transactions, domestically and internationally, working with private equity firms, family offices, and strategic buyers, both public and private. Scott has the trust and respect of CPA and [...]
Monty Walker Monty W. Walker, CPA, CGMA, CBI, of Walker Business Advisory Services, is a member of the M&A Source Leadership Committee and is the go-to guy for tax, exit, and transition strategies for our members. Monty is a member of the American Institute of Certified Public Accountants, the Texas Association of Certified Public Accountants, the International Business Brokers Association, and the Texas Association of Business Brokers. He has been recognized by his peer group in the business transfer industry as one of the foremost innovative advisors to small business owners in the areas of business transactions, business structuring & design, business tax planning, and business exit planning. He works with business [...]
There are three different types of procrastination that we see today. First is classic procrastination which is the act of consciously delaying what we know we should be doing: I come home from the office at night and I have a stack of bills on the kitchen counter that need to be paid. I’m tired and exhausted. Rather than paying the bills, I’m going to sit on the couch and zone out and watch Sports Center. That’s the classic form of procrastination we are familiar with. There is also another type of procrastination which I’ve coined a phrase for, instead of [...]
Resolving business failures cheaply and rapidly has never been more important, with Covid-19 and the recession about to push record numbers of companies under. But consider what a small-business owner faces: Your company is on the brink, you can’t pay your employees or suppliers, and now you’re expected to master the complex vocabulary of federal bankruptcy law. There’s Chapter 11, Chapter 7, Chapter 13, Subchapter V, Section 363, and on and on. The process looks expensive and time-consuming, and the chance of emerging with a going concern seems slim. The Uniform Commercial Code, which traces its origins to 1892, just might be the answer. It’s [...]
When preparing to sell a business, a mistake you will want to avoid is failing to pay enough attention to the variety of legal issues involved in a business sale transaction. The wrong legal mistake can stop a sale in its tracks. Worse, it could cost a small fortune to unravel. Thus, it is critically important to carefully analyze all relevant legal angles to the sale of your business. This post will look at some of the key legal points sellers should consider long before putting their business on the market. Mistake #1: Neglecting to Have a Non-Disclosure Agreement A critically important step [...]
A key point regarding a PPP Loan is that it is a loan. When the Borrower receives the loan, the proceeds should be recorded on the Balance Sheet as a Note Payable which is a liability. The loan proceeds should not be posted on the Income Statement as income. If the loan ends up being forgiven, it should be handled for income reporting as follows: Financial Statements (specifically the Income Statement) – The forgiven loan amount is an elimination of an obligation to pay a debt. An appropriate reporting of this elimination is for it to be presented as [...]