We have been talking about managing private company wealth in numerous posts on this blog and in my forthcoming book, Unlocking Private Company Wealth: Proven Strategies for Managing the Wealth in Your Private Business. To facilitate this discussion, we need to have an understanding about how different valuation concepts enter into the process of ownership […]
A few months ago, I wrote a post on personal branding following a training session on the topic I gave at Mercer Capital. The post was interesting and I received a number of comments both on and off this blog. The post also triggered a request for me to provide a webinar for the Practice Builder Academy (PBA). The PBA is an academy formed by two friends of mine, Rod Burkert and Mel Abraham, to help professionals in the valuation and forensic accounting spaces develop business more effectively. I was flattered to be asked and so I prepared for and did a webinar with them. This post addresses some of the things I talked about in the PBA webinar on Personal Branding and Business Development.
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 […]
In August 2012, I wrote a post entitled “Zynga and the High Cost of Concentrations.” This post takes a look at Zynga today.
There is a fascination in the business world with something called EBITDA. Look on the audited financial statement of any company and you won’t find any such thing. But everyone, or almost everyone, is talking about EBITDA when they talk about business earnings. EBITDA is an acronym for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is important because, as we will see, EBITDA is the initial source of all reinvestment in a business and for all returns to shareholders. Investors and analysts focus on EBITDA because when buying a business or when valuing a business, it is necessary to make judgments about its ability to generate cash flow sufficient to meet all of the needs of the business and and to provide adequate returns to shareholders.
Occasionally, you may pick up a new business book and can’t wait to read it because you can tell from the beginning that it brings a fresh perspective to a known problem. Ian Campbell’s new book, 50 Hurdles: Business Transition Simplified, is one of those books. Let me introduce you to this wonderful book now.
If there is life insurance associated with your buy-sell agreement, it is critical to be sure that the language in the agreement and any related documents specifies its treatment precisely. Life insurance can be used as a funding vehicle to acquire the stock of a deceased owner. If so, the life insurance is not treated as part of the purchase price. Alternatively, life insurance can be a corporate asset (corporate-owned life insurance, or COLI), and proceeds are part of value. The two different treatments provide different, perhaps dramatically different results for selling owners and remaining owners when buy-sell agreements are triggered by the death of an owner.
If you are approached by a single prospective buyer who wants to deal exclusively with you (or your client), what do you do? Is a “proprietary deal” right for you?
Buy-sell agreements are ownership transition plans in disguise. Few business owners think about their buy-sell agreements in this light, but if your agreement is triggered, either through the death of a shareholder or otherwise, then ownership will change hands. Your buy-sell agreement is really ownership transition on autopilot. The real question is whether you, the other owners and the company will land safely when a trigger event occurs or if some or all of you will crash and burn. This short post addresses a simple question: Do you know what will happen if your buy-sell agreement is triggered?
The reasons given by most companies for accumulating excess assets are really excuses. This post provides five reasons why it is important not to accumulate non-operating assets. The way to avoid excess asset creep is with a well-thought out and executed dividend policy, which is also discussed.
