“Is Your Business Ready for Sale?” is one of the most pressing question facing business owners today. And the question is important for advisers to businesses, since we are instrumental in asking hard questions and, indeed, have the responsibility for asking hard questions of our private company clients. At the outset of a new series of posts, let me say categorically, I am not, not, not suggesting that your business should be up for sale. Bear with me while we focus on the actual question of “Is Your Business Ready for Sale?”
Shares of La Quinta Holdings (LQ) dropped sharply upon the surprise announcement on Thursday, September 17th, after the close of trading, of the the resignation of its CEO, Wayne Goldberg. The stated reason for the resignation was “mutual agreement.” Mr. Goldberg had been CEO at La Quinta for about 15 years.
In a second announcement the same afternoon, La Quinta provided modestly lower guidance (than previous) for RevPAR (revenue per available room) and for full year adjusted EBITDA. RevPAR guidance was lowered about 1.0% from an expected increase of 4.5% to 5.5% to the range of 3.5% to 4.5%.
The reaction in the share pricing of La Quinta on Thursday was immediate and severe. After closing at $18.97 per share Wednesday afternoon, the opening price Thursday morning was $15.93 per share, or some 16% lower than the day before. Based on about 131 million shares outstanding, the drop amounted to about $400 million in lost market capitalization.
So many questions that a business owner must ask. And answer, if he or she hopes to have successful management and ownership transitions and a successful business end game that prepares him or her for the rest of life. Many of the questions are interrelated and the answers to some will influence the answers to others. I pose the following questions as a starting point for discussion between owners, their families, their key employees, and their advisers. At the conclusion of the questions, I suggest that you can begin to work on answers by examining your buy-sell agreement. That process will get you in the mode of asking and answering critical questions during the interim time between now and your business end game that will insure that you transition ownership and management smoothly and prepare for the rest of your life.
When I read about Uber’s most recent financing, which valued its equity at $51 billion, I thought about FedEx Corporation, a Memphis-based company. I then wrote a blog post titled Uber Market Cap of Equity Exceeds that of FedEx. This past week, my thoughts about FedEx turned towards AutoZone, another Memphis-based company, as well as […]
This post introduces the concept of “interim time,” which is the easily lost time between two critical goal posts in the life of a business owner, his or her current status quo and their business end game. It is, after all, what we do during this interim time that prepares us not only for our inevitable business end games, but also for the rest of our lives.
A decade ago, Richard Jackim and Peter Christman wrote a book entitled The $10 Trillion Opportunity. The second edition had the subtitle of “Designing Exit Strategies for Middle Market Business Owners.” While the book did provide a guide for financial advisers working with middle market business owners, I don’t recall that it provided a basis for […]
In this post, I explain why I believe that fixed price buy-sell agreements are not workable for most closely held and family businesses. This is as true for large companies as well as much smaller companies. However, if you or your client insists on using a fixed pricing mechanism in a buy-sell agreement, take the steps recommended in this post to maximize the probability of success and minimize the potential for future disputes. My text for this sermon lies in Chapters 9, 13, 14, 16 and 17 of Buy-Sell Agreements for Closely Held and Family Business Owners.
Announcing the Ownership Transition Bundle
Announcing a new Ownership Transition Bundle for business owners and advisers.
My book, Buy-Sell Agreements for Closely Held and Family Business Owners, has been available since 2010 and has sold thousands of copies. The book sells for $25 (plus shipping).
My latest book, Unlocking Private Company Wealth, was released in late 2014, and is selling at much higher rate than the buy-sell agreement book. This new book deals with managing private company wealth in ways you likely have not thought about. This book sells for $25 (plus shipping). That makes $50 for the two books.
We are now offering an Ownership Transition Bundle, consisting of both books for only $35 (plus shipping). As they say on selling TV networks, “But wait, there’s more!”
In addition to both books, you will receive immediate downloads of our very popular checklists, the Buy-Sell Agreement Review Checklist, and the Promissory Note Checklist. The review checklist is by far my most downloaded resource, so this is quite a package!
If you are interested in ownership transition for closely held and private companies, the Ownership Transition Bundle will tell you a great deal about managing private company wealth in the process of thinking about ownership and management transitions.
The buy-sell book will tell you about the unexpected consequences for ownership transition, often quite adverse, when poorly written buy-sell agreements are triggered. The free resources are available to help discuss and plan for important aspects of transitions.
Buy it now: The Ownership Transition Bundle.