Exit Strategy News & Insights

Insights, knowledge base and announcements for business owners and professional advisors

Protect your Trade Name and Protect your Business Value

March 28, 2018 / in Business Valuation, Exit Planning, Sell a Business / by Adam Wiskind

From my experience as an M&A Broker, I can tell you that your company’s trade name will be a valuable asset to most prospective buyers of your business. Your trade name, which identifies your company’s brand and distinguishes its reputation with customers and suppliers, is worth strengthening and protecting if you plan to sell your company some day. It may surprise you that the name of your business, even if it’s not officially registered, receives some …

2018 Sonoma County Backroad Challenge Cycling Event/Fundraiser

March 7, 2018 / in News / by Al Statz

Like you, ESGI’s advisors are invested in the communities in which they live and work. Exit Strategies is proud to once again sponsor the annual Sonoma County Backroad Challenge, a one-day cycling event full of spectacular scenery, fun and excitement where riders of all levels from across the United States converge to raise funds for worthy humanitarian projects, both local and international. The annual Sonoma County Backroad Challenge is a fundraising project of the The …

What are the current expectations for interest rates?

February 21, 2018 / in Business Valuation, News / by Louis Cionci

One of the important factors that effect business value is macroeconomic conditions which include interest rates and the cost of capital. Business owners who want to know what is going to happen to interest rates should be aware of new leadership at the Federal Reserve. On February 5, 2018, Jerome “Jay” H. Powell took the oath of office as the new Chairman of the Board of Governors of the Federal Reserve System, succeeding Janet Yellen. …

Don’t Let Key Employees Hijack Your Exit Strategy

February 14, 2018 / in Exit Planning, Sell a Business / by Jim Leonhard

In building a successful company, owners usually invest in hiring and developing managers and key contributors that become vital to the company’s effective operations. These people are considered “key employees”. When the time comes for the owner to exit his or her business, these key employees are usually valuable “assets” in the eyes of potential buyers. Unfortunately, if a business owner has failed to take certain steps, key employees can derail a successful sale or …

Is Your Company an Employee Stock Ownership Plan (ESOP) Candidate?

February 10, 2018 / in Exit Planning, Sell a Business / by Al Statz

Employee Stock Ownership Plans (ESOPs) have compelling competitive, financial and legacy benefits. For business owners weighing their exit options, a leveraged ESOP may be feasible if the owner, company and employees possess certain attributes: Owner Attributes Owns 30% or more of corporate stock Has a low basis in the stock Looking to reduce involvement in the company long term (5+ years) or shorter term if successor(s) are in place to take over Concerned with employee welfare …

Four Questions Your Buy-Sell Agreement Should Answer

January 8, 2018 / in Buy-Sell Agreements / by Al Statz

A buy-sell agreement is a common contract between shareholders that both restricts ownership and facilitates the transfer of shares in a closely-held company. The other shareholders or the company become the buyers (marketplace) for what would otherwise be highly illiquid stock. Every buy-sell agreement should answer four fundamental questions: 1. Who is the purchaser? Generally, buy-sell agreements take one of three approaches to determining who the purchaser will be: Redemption, Cross-Purchase or Hybrid. In a …

Does My Buy-Sell Agreement Establish Value for Estate Purposes?

December 20, 2017 / in Business Valuation, Buy-Sell Agreements, Exit Planning / by Al Statz

Buy-sell agreements that contain a clause that values stock at less than fair market value can be disregarded for tax purposes. It is important to consider the requirements of Internal Revenue Code (IRC) Section 2703 when developing an estate plan involving business interests in which 50% or more of the stock is family owned. Section 2703(a) states that a shareholder agreement (entered into after October 8, 1990) that allows for the acquisition or transfer of …

Current Market Multiples for Main Street Business Sales

December 6, 2017 / in Acquire a Business, News, Sell a Business / by Louis Cionci

Each quarter, The International Business Brokers Association (IBBA) and M&A Source together with Pepperdine Private Capital Markets Project and the Graziadio School of Business and Management at Pepperdine University publish a quarterly national survey of business brokers and M&A advisors called the Market Pulse Survey. Price multiples and other key metrics in the Main Street Market section of the Q3 2017 survey are presented below. Main Street businesses are defined as those with enterprise values …

Help! I Need a Broker to Sell My Company

November 15, 2017 / in Sell a Business / by Exit Strategies

I was recently talking with a business owner who is considering selling his California company. He had found my contact information online, and while he was interested in getting started, he really didn’t know how to evaluate a business broker’s credentials for a sale engagement. Sellers are often unsure what questions to ask. For this reason, I like to spend 15 minutes to share my relevant M&A experience, my career history, our firm’s processes and …

How Would Your Company Survive Without You?

November 1, 2017 / in Business Valuation, Exit Planning / by Exit Strategies

If you are like many business owners, you tend to get caught up in the daily demands of your business: managing sales and production, costs, and the bottom line. What about preservation and protection? Perish the thought, but what would happen to your company if it was unable to carry on due to your death or disability? These concerns may seem like, and may in fact be, remote possibilities. However, by putting them off, you …