Make Sure Your Buy Sell Agreement Addresses Partner Disputes
Lets spend another minute on the buy-sell agreement. As discussed, death is insurable. More complex is how feuding partners can separate. Deal with this when you are starting your partnership. If you cannot work out a fallback agreement then, think what it will be like if the business is not doing well and one of you wants to leave. Don’t always assume your partner will be the one to leave. Few former owners we talked to thought they would voluntarily leave their business when they started it.
Thursday, January 27, 2005
Tuesday, January 25, 2005
Prepare a Strategic Succession and Exit Plan
Ideally you should begin planning your exit five years before you leave your business. This gives you plenty of time to determine what you want to accomplish, make adjustments and implement the plan.
Of course if you are like most people knowing when you are five years from leaving your business may be problematic in itself. For that reason we believe every business owner should carry on some level of exit planning.
If you are too young to work on an exit plan your may want to call it a succession plan. We would combine that with a buy sell agreement if you have partners. Insure your death to provide for you spouse, perhaps with an insurance trust. If you desire or need to, insure your death to pay your bills and you have an effective plan succession plan for many small businesses. More difficult is disability. This can be insured but the price can be significant. We would recommend you seriously consider disability insurance if your health allows it.
If you have, partners make sure you have a buy-sell agreement. Again, death is easy for most people because of the reasonable cost of term life insurance. More complex is how feuding partners can separate. Deal with this when you are starting. If you cannot work out a fall-back agreement then, think what it will be like if the business is not doing well and one of you wants to leave. Don’t always assume it will be your partner wanting to leave either. Few owners we talked to thought they would voluntarily leave their business when they started it.
Address these matters at all times in your business life. We will continue with this topic in a future post. Thanks now.
www.successfulexits.com
Ideally you should begin planning your exit five years before you leave your business. This gives you plenty of time to determine what you want to accomplish, make adjustments and implement the plan.
Of course if you are like most people knowing when you are five years from leaving your business may be problematic in itself. For that reason we believe every business owner should carry on some level of exit planning.
If you are too young to work on an exit plan your may want to call it a succession plan. We would combine that with a buy sell agreement if you have partners. Insure your death to provide for you spouse, perhaps with an insurance trust. If you desire or need to, insure your death to pay your bills and you have an effective plan succession plan for many small businesses. More difficult is disability. This can be insured but the price can be significant. We would recommend you seriously consider disability insurance if your health allows it.
If you have, partners make sure you have a buy-sell agreement. Again, death is easy for most people because of the reasonable cost of term life insurance. More complex is how feuding partners can separate. Deal with this when you are starting. If you cannot work out a fall-back agreement then, think what it will be like if the business is not doing well and one of you wants to leave. Don’t always assume it will be your partner wanting to leave either. Few owners we talked to thought they would voluntarily leave their business when they started it.
Address these matters at all times in your business life. We will continue with this topic in a future post. Thanks now.
www.successfulexits.com
Monday, January 17, 2005
Take a Vacation and Improve Your Business
Taking a vacation will force you to improve your business. Yes, basking in the warm sun, while sipping an ice cold margarita, will do more good for your business than frantically racing through another day.
By taking a vacation you will improve your business three ways:
1. You will find ways to delegate routine tasks. You will eliminate some very mundane tasks. When you return continue on with this new found delegation. It will provide you with more time to do important work. Remember the receptionist and mail clerk have many urgent tasks and no control of your time. As a business owner you must find time for important tasks like planning that will grow the business.
2. You will clear your mind. With a clear mind you will be able to make normal decisions much more rapidly. You will also find yourself making better decisions. Surely you have experienced being so busy that you can hardly make simple decisions like ordering off a menu.
3. By not thinking often major life decisions or major business answers will just come to you. Deciding to add a new product line, or hire a key executive or other major decision may do more for your overall efficiency than days of routine decisions.
Remember, take a vacation and improve your business by improving your delegation skills, relaxing so you make better decisions, and having the answers to major decisions just appear.
For more go to www.successfulexits.com
Taking a vacation will force you to improve your business. Yes, basking in the warm sun, while sipping an ice cold margarita, will do more good for your business than frantically racing through another day.
By taking a vacation you will improve your business three ways:
1. You will find ways to delegate routine tasks. You will eliminate some very mundane tasks. When you return continue on with this new found delegation. It will provide you with more time to do important work. Remember the receptionist and mail clerk have many urgent tasks and no control of your time. As a business owner you must find time for important tasks like planning that will grow the business.
2. You will clear your mind. With a clear mind you will be able to make normal decisions much more rapidly. You will also find yourself making better decisions. Surely you have experienced being so busy that you can hardly make simple decisions like ordering off a menu.
3. By not thinking often major life decisions or major business answers will just come to you. Deciding to add a new product line, or hire a key executive or other major decision may do more for your overall efficiency than days of routine decisions.
Remember, take a vacation and improve your business by improving your delegation skills, relaxing so you make better decisions, and having the answers to major decisions just appear.
For more go to www.successfulexits.com
Sunday, October 31, 2004
Are You Ready to Sell Your Business?
Make Sure You Understand Your Motivation for Selling Your Business
Are you thinking about selling your business?
This simple one-question quiz will help you to better understand your motivations behind this thought. A better understanding of your underlying motivations will help you make the right decision.
Select the answer closest to your actual reason for thinking about selling your business.
A. "I'm selling my business because of the money I will make on the sale".
B. "I'm just tired and it's not fun anymore."
C. "I have too many irons in the fire and can't keep up".
D. "I'm ready to retire from owning my business".
Click Here to Find Out if You are Ready to Sell Your Business
Make Sure You Understand Your Motivation for Selling Your Business
Are you thinking about selling your business?
This simple one-question quiz will help you to better understand your motivations behind this thought. A better understanding of your underlying motivations will help you make the right decision.
Select the answer closest to your actual reason for thinking about selling your business.
A. "I'm selling my business because of the money I will make on the sale".
B. "I'm just tired and it's not fun anymore."
C. "I have too many irons in the fire and can't keep up".
D. "I'm ready to retire from owning my business".
Click Here to Find Out if You are Ready to Sell Your Business
Wednesday, October 27, 2004
Selling Your Service Business
How to Sell a Business which delivers an Intangible Product or Service such as Accounting Firms, Consultants, Engineering Firms and Training Firms
Many service businesses do not deliver a tangible product that sits on a shelf. They deliver hard to measure products like good advice, training, and planning.
Without forethought, it can be very difficult to show a buyer how they will successfully operate the business. Buyers are rightfully skeptical and want to see what they are buying. They want to know how the cash flow will continue after settlement.
Intangible services and products do deliver measurable return on investment to purchasers. The right advice has made many business owners millions. Intangible services and products have a high value when marketed and delivered properly.
It is just that it is very hard to see intangible goods and services.
Compare this to walking into a card store. The card store has fixtures to hold the cards. The store has inventory everywhere in the form of cards, gifts, balloons, etc. A prospective buyer can see what they are getting from the start. Very little is left to the buyer’s imagination. They can see what they are buying.
This is the riddle to solve to obtain full value from your service business. How do you demonstrate to a purchaser that your product really exists and will continue to sell?
To do this you must develop credibility with the buyer. These transactions take more trust between buyer and seller to overcome the lack of visible assets. You must clearly show the framework you have, namely, how the new owner will operate the business, keep the clients, and provide outstanding results like you have.
More About Selling Your Service Business
How to Sell a Business which delivers an Intangible Product or Service such as Accounting Firms, Consultants, Engineering Firms and Training Firms
Many service businesses do not deliver a tangible product that sits on a shelf. They deliver hard to measure products like good advice, training, and planning.
Without forethought, it can be very difficult to show a buyer how they will successfully operate the business. Buyers are rightfully skeptical and want to see what they are buying. They want to know how the cash flow will continue after settlement.
Intangible services and products do deliver measurable return on investment to purchasers. The right advice has made many business owners millions. Intangible services and products have a high value when marketed and delivered properly.
It is just that it is very hard to see intangible goods and services.
Compare this to walking into a card store. The card store has fixtures to hold the cards. The store has inventory everywhere in the form of cards, gifts, balloons, etc. A prospective buyer can see what they are getting from the start. Very little is left to the buyer’s imagination. They can see what they are buying.
This is the riddle to solve to obtain full value from your service business. How do you demonstrate to a purchaser that your product really exists and will continue to sell?
To do this you must develop credibility with the buyer. These transactions take more trust between buyer and seller to overcome the lack of visible assets. You must clearly show the framework you have, namely, how the new owner will operate the business, keep the clients, and provide outstanding results like you have.
More About Selling Your Service Business
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