SELLING PRIVATELY HELD BUSINESSES


–SINCE 1982–

Articles & News

Positioning Your Business For Sale

In order to maximize the value of your business, it is important to start planning for the sale three to five years in advance, but it is never too early to start the process. Below are several items that will make your business more attractive to the market. Financial Information – Timely accurate financial information going back a minimum of three years is important not only to buyers, but also to lenders. Although nobody likes paying taxes, there needs to be a “paper trail” demonstrating that the business can support the debt service, withstand a reasonable downturn in the economy,

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State of the Business Transfer Market

The other day, I was on a conference call with a potential seller and his accountant. Near the front end of the call, the potential seller indicated that he was nearing retirement, getting tired, and wanted to sell his business, but only if market conditions are right. A variation of this conversation is part of virtually every discussion that we have with our prospective clients. In order to answer it properly, we believe that it is appropriate to dig down and consider several factors in defining the market. Below are some of the factors that we consider. Global and monetary:

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Proactive Tax and Transition Planning

Ideally your advisor can work with you to implement strategies to mitigate taxes without negatively impacting the value of your business. The use of retirement accounts is an example of that type of planning, as part of the valuation process involves recasting financial statements and tax returns. By developing a paper trail of legitimate deductions, your M&A advisor can “recast” your income statement by adding back contributions to the owner’s retirement accounts. In addition to positive actions to apply, you also need to avoid negative actions that will diminish value. For example, deferring income and accelerating expenses. Buyers expect to

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The Timing of Selling A Business

With the advent of Labor Day and the end of the summer vacation season, we typically see an increase in buyer activity as people and businesses focus on completing transactions before the end of the year. Many business owner’s underestimate the time that it may take to sell a business. This month’s featured article addresses the process and the amount of time that it may take to complete a transaction. Having properly prepared financial statements at all times can considerably shorten the process and enable the owner to take advantage of unsolicited offers. The team at The FBB Group, Ltd.

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Buying A Small Business Using Retirement Funds

Acquiring A Small Business Using ROBS Can Meet The IRS Prohibited Transaction Exception Written by: David Nilssen An increasing number of entrepreneurs are capitalizing their small business or franchise with their own IRA or 401(k) funds without taking a taxable distribution or getting a loan. Although growing in popularity, this option is still relatively unknown by many dreaming of owning a small business or franchise. In other words, thousands of would-be entrepreneurs are unaware they could be accessing start-up capital that is sitting in their own retirement accounts. Known as a “Rollovers as Business Start-ups ” or ROBS, this arrangement

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Effective Use of Earnouts in M&A Transactions

By Kelly Reiman Earnouts have been used over the years to bridge the gap between the seller’s perceived value of its business and the buyer’s willingness to pay for anticipated future results. Counsel to the parties and their business brokers can be instrumental in setting realistic expectations for them and crafting the provisions to ensure success. The Business; The Parties While an earnout can conceivably be drafted for every business, certain businesses lend themselves better to the achievement of the objective. Those businesses with a recurring stream of revenue are better suited than businesses that have a singular milestone that

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Illusion vs. Reality: What Really Creates Value for Your Business?

By Janna Hoiberg Being an entrepreneur is a challenging occupation. It is filled with opportunities beyond your wildest dreams. Those dreams can also become the nightmare you never wanted. Working with business owners, I find most of the challenge is in the day-to-day operations of the business. That day in/day out, cash flow, hiring, firing, marketing, selling, and servicing customers can be a 24 x 7 job. The challenge is to start running your company and stop having your company run you. If your company runs you, then after a period of time, you burn out. What happens next is

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Asset Allocation for Business Purchases – A Quick Primer for Buyers and Sellers

By Graeme Cloutte, CPA The tax implications of buying and selling a business need to be addressed before coming to the closing table to finalize the carefully structured deal that the FBB Group has put together. One of these key implications is how the transaction is structured for purposes of “asset allocation“. In what follows, I am assuming that the deal is a sale of assets, rather than of company stock or LLC membership interests. Asset Sales Compared to Company Stock/Share Sales The vast majority of deals are asset sales rather that sales of shares of a corporation. There are

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Seven Reasons to Sell Your Business Now

Written by Stephen J. Furrer, CPA, CEPA, ABV It seems like we’re at a fork in the road: there are some positive signs that the economy is entering the earliest stages of a long term expansion, but at the same time, if we dare read the headlines, it seems we’re destined to repeat 2008. It’s precisely because we’re at this inflection point that we see a lot of business owners thumbing the eject button. If you’ve been thinking of selling your business, here are seven reasons to get out now: 1. You’ve lost the stomach for it A lot of business owners

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Services FBB Provides

I was recently talking to a consultant that we have worked with for many years.  During the course of our conversation, I mentioned that we were working on completing a valuation assignment for a business where the son was considering buying the business from his parents.  Depending on the valuation results and other family dynamics, we were either going to assist in structuring a transaction to transfer the business to the son, or take the business to market to sell to a third party.  For internal transfers such as this, we would not only value the business, but would also

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