When valuing a closely held business, I frequently pose the following question to the business owner: what do you think the business is worth without you? A similar question can be asked in regard to key employees: what is the business worth without your key employees? If they are critical to the success of the business their possible departure represents… Read More
“All happy families are alike; each unhappy family is unhappy in its own way.” Leo Tolstoy Businesses controlled by a single family account for 50% of the U.S. Gross Domestic Product, include 35% of the Fortune 500 – both private and public companies – and are responsible for 60% of employment and up to 80% of the job creation in… Read More
Why exit planning is becoming more critical than ever Currently there are about 28 million small businesses in the U.S.—those employing 500 or fewer employees. Of these, about 19 million have zero or one additional employee. Of the remaining 9 million, 3.5 million are owned by persons younger than 50 or older than 70. Therefore, 5.5 million businesses are owned… Read More
Business ownership transitions are difficult. Many business owners will procrastinate and not take timely action. Here are some of the avoidable consequences. 1) Failure to have a solid buy-sell agreement for multi-owner businesses. Businesses without such an agreement are playing Russian roulette. If an owner dies, her estate might not have any leverage in obtaining a satisfactory price for the… Read More
Managing a professional services firm Chuck Hufnagel is a professional engineer and in 1988 started his own firm. He specialized in land development and his clients included developers and a number of municipalities in the Philadelphia suburbs for whom he acted as a consulting engineer. Chuck had an excellent reputation and developers, architects and municipal officials loved to work with… Read More
Note: The following is based on actual case histories. The names have been changed to protect the guilty. Antonio Tubal graduated from college as an electrical engineer and went to work for a large manufacturer of commercial refrigeration systems. Tubal spent several years working in the company’s division that designed and manufactured air conditioning systems for large industrial/commercial facilities. Tubal… Read More
Does the prospect of putting your business on the market give you the willies? Having prospective buyers wade through the intimate details of your business operations not for you? Then you have probably given some thought to selling your business to insiders. This is a popular exit route with a 2011 survey by the Business Enterprise Institute finding that 41%… Read More
As published in Lancaster edition of Business2Business, August 2014 issue. In working with business owners, we find that there is confusion about the meaning of terms which leads to a confusion about how to act. Here is our guide to clarify meaning so as to promote a more thoughtful path of action. All businesses above a certain size threshold should… Read More
