RealBusiness Workshop and Proper Business Succession Planning Presentation

The presentations on the 18th of September in Santa Fe, NM with NPRRA went well. Below is the presentation materials we used in the Succession Planning session. Of course, the meat of the content is what we talked about and is not included in the presentation itself. Feel free to give my office a call to learn more.

In other news, but on a related topic, several advisors and I are hosting a workshop on Wednesday, Sept. 30, at 7:30 am […]

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Information and Term Sheet

One of the first things a seller can to do to move toward a transaction is to put together, with your trusted advisors, an informational and/or term sheet that identifies the most important aspects of the business, and the starting point for negotiations with a prospective buyer. This sheet essentially identifies the seller’s fundamental statistics regarding which a buyer will be interested, and in addition, the ideal structure and terms to sell the business.

These documents serve the dual purpose […]

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Finding a Buyer or Seller for a Business

Finding a buyer or seller is often a matter of preparing to find one before you actually need to do so. If you operate with the expectation and intention of selling or buying, you can make yourself attractive and finding a complimentary partner will be easier.

One of the best things to do is to keep a file of persons who are involved in transactions regarding business well before you are ready to engage in a transaction. If you know […]

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Considerations for Buyers in Purchase of a Business

In contrast to sellers, buyers of a business have different concerns which are often in conflict with the concerns of the sellers. Buyers and sellers can set the tone of the interaction by either approaching the situation as an opportunity to help each other, or as an adversarial situation in which the parties are trying to get an advantage over each other.

Buyers have different motivations for purchasing a business unique to their stage of life. They may be looking […]

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Considerations for Sellers in Sale of a Business

Understanding the considerations of the buyer or seller of a business is key to determining whether the sale should take place, or whether it will be successful.

Sellers are primarily concerned with maximizing the sales price, making sure they will get paid, and limiting the taxes they will have to pay on the proceeds they receive. Other considerations often include concern about the employees, the legacy of the business, the survival of the business after they leave, and even the […]

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The First Natural Presumption about Exiting the Business: Sale

It seems that whenever a business owner is presented with the questions of what they will do to exit, the first thought is: Sell the business. However, even though the successful end of a business for a particular owner almost always involves some sort of sale, there are a lot of options and variations.

Often, owners think selling the business means selling to a third party who will take the whole thing off their hands for a nice sum of […]

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Starting with the End in Mind; Business Exits

One of the first things a business should do when it starts out is to think about what the end looks like. It is not necessary to know exactly how the business will end, but more often than not, the business owners do have expectations and a general vision for how things will work when they exit the business, and whether that exit is the end of the business, or just the end of their role in the business. Furthermore, […]

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Use of Nonqualified Deferred Compensation for Exit or Succession Planning-Part 2

As an owner recognizes these issues, a nonqualified deferred compensation plan provides the owner with a tool he or she can use to advance the goals.

First, the owner can work to put in place a plan which provides certain key employees with significant benefits for growing the business to the size it needs to be to meet the needs. The owner can promise the key employees a portion of the growth of the company over and beyond its existing levels […]

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Use of Nonqualified Deferred Compensation for Exit or Succession Planning-Part 1

One possible use of nonqualified deferred compensation plans comes up in the context of exit or succession planning. As a business owner begins to contemplate his or her retirement from a business, several issues become apparent. One is that they need to make sure the business has sufficient value that it can be transferred for the value the owner needs upon retirement. Another is that the business’s value to a successor is dependent on its ability to operate without the […]

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Advantages and Disadvantages of Nonqualified Deferred Compensation

Deferring compensation to an employee allows the compensation to be taxed at the time it is paid. Funded qualified plans allow the employer to deduct the payments made to the plan, but the employee does not have to pay taxes on it until it is actually received. For the employee, the funded qualified plan is advantageous because it means the plan is both funded and the tax is deferred. In addition, the deferred compensation is not subject to employment taxes […]

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