SELLING PRIVATELY HELD BUSINESSES


–SINCE 1982–

Articles & News

Training/Transition After the Sale

We are often asked by business owners considering the sale of their businesses, what is an appropriate length of time to remain involved with the business for a training/transition period.   Although there are many factors that come into play, as I will address below, the real answer is, “It depends.”   We often break the training/transition period into three categories: short, medium, and long. For short-term transitions, we usually see a fairly straight forward business, a buyer with industry experience, and/or a strong second-level management team in place.  In this type, often the transition consists of introductions to key customers,

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What is “Due Dilligence”?

Due Diligence – Making Sure Everything Is Above Board Due diligence is the process that a buyer and his advisors use to verify the accuracy of the representations of a seller and the suitability of the business for an acquisition.  Depending on the transaction, there can be numerous components of the transaction that undergo scrutiny, including financial, legal, intellectual property, technology, etc.  For our purposes, I will address the financial and legal aspects of due diligence, as they are common to virtually every transaction. Financial due diligence is usually conducted by an accounting firm retained by the buyer to verify

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Employee Issues Involved With a Business Transfer

For most businesses, employees are the key asset being acquired, and the majority of buyers retain all or the vast majority of the employees.  Of course, the employees will need to demonstrate their value to the buyer.  When we advise sellers and buyers, we suggest that the transition to new ownership be as minimally disruptive as possible to the employees.  By that, we mean not changing pay scales, benefit packages, or vacation policies.  In fact, one of the best ways for the buyer to ensure employee retention is to increase the benefits package.  For example, we sold a business with

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Insurance Issues Involved In Business Transfers

Property and Casualty (“P&C”) – In addition to the general need for insurance coverage for loss protection, most transactions involve financing, with the business’ assets being used as collateral.   Prior to closing, the lender will require proof, in the form of a certificate, that the lender is named as an additional insured on a policy with sufficient coverage amounts.  If a lease is involved in the transfer, the Landlord will also require appropriate insurance protection.  Often times, the Seller’s existing insurance agent is the most efficient source for coverage, as the agent is familiar with the business and the facility. Health

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Preventing Legal Deal Killers

By Julian Izbiky, Izbiky & Associates, Attorneys At Law A legal deal killer is a legal issue that causes a purchaser to walk away from a deal.  A business owner can take steps in advance of a transaction to prevent a legal deal killer from occurring. Employee Issues Having key employees is a critical value driver for a business.  But what happens when the key employee says that he won’t work for the prospective purchaser and that, if the business is sold to the prospective purchaser, he will quit and start a competing business?  I once saw this exact situation

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9 Things Every Business Owner Needs to Know Before Selling

By Mason Myers, Greybull Stewardship, Business Investment Fund When selling your business, it pays to learn lessons from others.  Most business owners will not get a second chance to do it well, and it is such an important process for your employees, your customers, and your own bank account that you want to maximize your chances of success. I have been involved in over 30 business purchases – most with between $1 million and $5 million in profit – and have earned scars from broken deals, learned many humbling lessons, and burned the midnight oil doing my best to craft

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Starting the Year Off Right

At the FBB Group, Ltd., we finished the year with a multi-company closing on December 31 and started 2015 the right way by closing a transaction in Denver on January 5.  The next several months are historically our strongest time for buyer activity and, with the strengthening economy, we expect that trend to continue. Speaking about the economy, last week, I attended the ACG lunch in Denver.  The featured speaker was Alan Beaulieu, who had previously presented at this venue with significant accuracy.  Alan was particularly bullish about the U.S. economy due to low energy prices, falling unemployment rates, and low

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“Business Ownership Blues? Four Questions to Your Freedom” by Jon Hokama, Principal and Founder of Jon Hokama and Associates, LLC

If I were to distill the top Frequently Asked Question (FAQ) I get from business owners, it’d be this: “How can I/my business do ‘better‘?” My response is, “Do you mean you personally or your business? And what do you mean by ‘better‘?” This is The Question of about what I call “alignment” between the owner and the business. We at Jon Hokama and Associates, LLC (JH&A) have found that all business owners want their businesses to serve their life, but often feel that they are in a wrestling match to gain the upper hand! Too often these owners find that

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Earning Calculation Methods: EBITDA vs SDE

Acquisition activity remains strong and we are getting more out of state, and even out of country, inquiries than in the most recent several years. I attribute this to the quality of our clients and the strength of the Colorado economy. As a result of this increased activity, we are looking to expand our administrative staff by adding either a full-time or part-time team member.  The candidate should have good communication skills, including social media.  If you know of someone that you think might be interested, please have them contact my Office Manager, Lynn Lage, at lynn@fbb.com.  Thank you. The Differences Between EBITDA

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Set Your Business Apart – A Holistic View of the Business Lifecycle

By Kathi Gurin, Sales Xceleration & Customer Experience Consultant, Sage Consulting, Inc. If you’re reading this, you’re likely receiving some great support as you move toward the purchase or the sale of a company. You have already read the excellent articles in previous FBB eNewsletters outlining the “dos”, the “don’ts”, and the “don’t forgets” surrounding the very important business decisions you’re about to make (or have just made). And, as either buyer or seller, you’ve reviewed the target company’s finances, legal and HR compliance, tax implications, and much more, all under the expert guidance of professionals. But what can you

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