What My Father Taught Me About Margin in Life

And a Few Other Thoughts as Well

I’ve been thinking about the meaning of a simple word, margin, in our lives. Last week, I wrote the first in what will be a series of posts on this topic. It was titled Do You Have Margin in the Important Areas of Your Life? And so we continue a discussion of the concept of margin in life, this time, focusing on early lessons from my father.

Would You Rather Drive a Tesla or a Ford?

Which Stock Would You Rather Own?

In mid-2015, I commented on the apparent anomaly of a financing round for Uber that had an implied market value of equity (MVE) in excess of that of FedEx (FDX). At the time, Uber’s implied MVE was $51 billion, and that of FedEx was $48 billion. My post addressed some of the issues that I saw at the time. Similarly, last week, I read an article in the Wall Street Journal titled “Tesla, on a Hot Streak, Passes Ford in Investor Value”. That caught my attention, because Tesla is young and quite small and Ford is 100 years old and quite large. Why then does Tesla have such a high valuation?

Interim Time: The Time Between Now and a Future Sale of a Business

Use Interim Time Wisely to Prepare Businesses and Owners for Ultimate Sale

Is business ownership a binary thing? Do we either own our businesses or not? The binary notion leads business owners to think either in terms of the status quo or of an eventual sale of the business. The truth is that between the two bookends of status quo and an eventual third-party sale are many possibilities for creating shareholder liquidity and diversification and facilitating both ownership and management transition

Do You Have Margin in the Important Areas of Your Life?

If Not, It is Time to Think About Building Margins before you are Marginless

We live life now, at the margin between the past and the future. What we do at this margin impacts our futures. What we have done or have not done in the past influences, or creates, the options we have now in our lives, or at the margins. In other words, the margins that we create in various areas of our lives impact or influence what we can, will, or won’t do each day.

Thinking About Selling Your Business? Don’t Wait to Fix Your Buy-Sell Agreement

The story in this post represents a composite from recent discussions with clients revolving around the question – “If a sale in the foreseeable future is a possibility, should you bother to be sure that your buy-sell agreement is in good working order?”

Public Companies Highlight Management Succession Issues

Private Companies Have Growing Issues

Planning for management succession has been a recurring topic on this blog. This week, the succession news at Disney is that Robert Iger, chairman and CEO, will stay on for at least an additional year while the Company seeks a replacement. This posts uses the example of Disney to highlight the critical management succession issue for all companies, both public and private.

Buy-Sell Agreement Pricing Should be Responsive to Changing Conditions

A recent post by Matt Crow, president of Mercer Capital, on our RIA blog, RIA Valuation Insights, gives me a reason to jump back in to posting here. In his recent post, “An All-Terrain Clause for your RIA’s Buy-Sell Agreement,” he addresses buy-sell agreement pricing provisions for a rapid, substantial change in company performance.

Capitalizing EBITDA

I have used this blog (and my former blogs) as a place to develop new materials. In late 2014, I began a series of posts to develop a means of building multiples of EBITDA using what I call the Adjusted Capital Asset Pricing Model. After peer review, I was encouraged to submit an article to the Business Valuation Review, which readers of this blog can obtain convenient access to.

Introduction to Trigger Events for Buy-Sell Agreements

Buy-sell agreements are designed to accomplish one or more business objectives from one or more of several viewpoints: the corporation, the employee-shareholder, the shareholder who is not an employee, and any remaining shareholders. The buy-sell agreement provides for what happens to the shares of owners who leave, for whatever reason, whether favorable or unfavorable. In this post, we walk through several trigger events, accounting for the favorable and unfavorable circumstances, and considerations that impact the company, the shareholders, and the buy-sell agreement.

A Brief Overview of the Three Categories of Buy-Sell Agreements

In the last post, we defined buy-sell agreements, at least in terms of a layman, noted key business issues that must be addressed, confirmed that buy-sell agreements are common to all corporate forms and industries, and profiled the types of companies we are addressing. Now it is time for a quick look at the three main categories of buy-sell agreements.