What is the “Middle Market” of Companies and What Do They Have in Common?

Use of a term like “middle market” to categorize companies may be helpful to writers in national publications. They are looking at ways to describe the world, as are companies who do business with other companies. However, in reality, few business owners think of their companies as “middle market” businesses. What we know about middle market and larger companies is that each one is defined by its business and markets. We also know that one thing they have in common is that all of them need to work on things like I write about in Unlocking Private Company Wealth that have nothing to do with the particular business they are in, including complex ownership, a need for workable buy-sell agreements, management transition planning and execution, ownership transition planning and execution, and management of private company wealth.

Unlocking Private Company Wealth

The following appeared in a recent issue of the BV Wire from Business Valuation Resources. New resource for BV experts in an advisory role BV experts can act as advisors to help business owners understand value and help them see how they can tap into that value. A new book, Unlocking Private Company Wealth, by […]

What Happened to Google and What Does It Mean For Your Private Business?

On October 16, 2014, after the close of the market, Google announced that its earnings per share (EPS) were $6.35 per share versus “analysts’ expectations” of $6.53 per share. Revenue totaled $16.52 billion versus “expectations” of $16.57 billion. The shortfalls were 2.7% and 0.3%, respectively. More troubling, Google reported a slowdown in the total number […]

Capital Structure and Dividend Policy Matter for Private Companies

Corporate finance can be confusing if you are a private company. Much of what we think about comes, directly or indirectly, from corporate finance ideas and concepts developed around the public markets. This post looks at what is called the Modigliani-Miller theorem, makes a few observations, and then, attempts to relate them to closely held and family businesses, i.e., the private company world. We cannot blindly assume that all of the assumptions of the M-M theorem hold in the real world of private company finance. Capital structure influences the level of shareholder returns to equity over time. Dividend policy determines the current returns to owners over time. The combination of a reasonable capital structure, a reasonable dividend policy, and paying attention to the needs of various owners make real differences in the long-term success of many private companies.

Share Repurchases in the News

Share repurchases are a tool frequently used by public companies to buoy their share prices.  Buybacks are a form of returns to shareholders that do not carry the sting of taxes on dividends.  What may not be generally known is the pervasiveness of the use of share repurchases by public companies.  For example, in the […]

10 Tips on the Role of Valuation in Ownership and Management Transitions

On Friday, August 15, 2014 I spoke at a conference of the Society of Financial Service Professionals in Orlando. Florida.  It was the first time I have spoken before this group whose members include many financial planners–all of whom have at least one and many of whom have more than one professional designations.  I attended […]

The Tyranny of the Urgent: Do Important Things When and While You Can

Do important things when and while you can. In business and life, this idea can be critically important. Unfortunately, many of us get caught up in the seemingly urgent aspects of our business and personal lives that keep us from focusing on the few really important things that need to be done at the present time to help insure a better future.