In 2013, The Internal Revenue Service went after FedEx in a big way. The IRS claimed that the individuals who apparently owned and operated a FedEx Ground route were actually employees of FedEx and not independent contractors as FedEx claimed. If the IRS had won this battle, it would have cost FedEx many millions of dollars, not only in back taxes, but also...
PwC (PricewaterhouseCoopers) has conducted the US Family Business Survey since 2002. Since their first report, the economy has changed drastically. In the 2014-2015 survey PwC recently issued, they provide interesting insights on family owned businesses throughout America. To get diverse data on the state of US family firms, they interviewed 154 businesses across sectors and lifecycles.
Overall, owners tend to be more optimistic than in 2012. But the optimism is not without challenges in the background. Many are trying to adopt new technology to compete in the post-recession economy, deal with changing market conditions, and still face the ever-present reality of succession planning.
If you were to draw a picture that visually represents your role in your business, what would it look like? Are you at the top of a traditional Christmas-tree-like organizational chart, or are you stuck in the middle of your business, like a hub in a bicycle wheel?
Here’s a list of eight warning signs you’re a hub-and-spoke owner and some suggestions for pulling yourself out of the middle of your business:
As we work with business owners seeking to sell their company, we find that many companies are not prepared to achieve peak value.
In order to prepare a business for an optimal sale, some activities are challenging and some are far easier. This article is about one of the easiest ways to enhance your company’s value and salability.
You’ve heard it said: “Price isn’t everything.” It’s true, it isn’t—but, in our experience, it’s important to every business owner. In fact, it’s often at the top of the list. There are, of course, other factors, such as acquirer type, deal terms, post-sale changes, and timing. But when you watch a business owner read an offer, the price is the first place they go. Because of that, business owners are always interested in achieving peak value.
As we’ve written before, having a management team is important to achieving peak value. But what seems to often happen is that a management team is built, but no one could step up and run the company if the owner stepped down—there’s no second-in-command (2iC).
If your company’s revenue has stalled after a period of rapid growth, you may have fallen into The Mile Wide Trap.
Consider the case of Kim (not her real name) who runs a public relations firm. Kim studied marketing at school and went on to work for a big advertising agency where she spent ten years learning a variety of marketing disciplines, from public relations to advertising to direct marketing and social media.
That’s wisdom. So simple yet powerful.
Sometimes we overlook the simple, yet hard, truths. This truth has many implications for business owners. Just think: what are you currently doing that you shouldn’t be doing or what are you doing that you want to change?
For example, if you want maximum value in a sale, it’s likely that you need a solid management team. If you don’t like your company being dependent on you—don’t plant the ‘you’ tree.
If you don’t like low-performing employees—don’t hire them.
Have you ever noticed that fire trucks always back into the fire hall?
Ever thought about why they don’t they just pull into their parking spot snout-forward like the rest of us?
Backing in at the end of a shift saves them time when they have to get to a fire. They back in to be ready; whether the call comes in 5 minutes or 5 days, they are prepared to pull out as quickly as possible.
Likewise, you, as a business owner, need to be ready when you get the call from someone who wants to buy your business. And these days, owners are getting that call more often.
The ultimate test of your business can be found in a simple question: would someone want to buy your company?
Whether you want to sell next year or a decade from now, you must be building an asset someone would buy – otherwise, you have a job, not a business.
Here are eight ways to ensure you are building a company, not just doing a job:
It’s a common finance principle that all your eggs should not be in one basket. But, so many business owners completely disregard this principle, even though it’s a universal and proven way to reduce risk.
Allow me to paint a picture. Let’s imagine you were climbing a rocky, slippery, and formidable mountain. Sure, that’s a difficult endeavor by itself, but what if you had to climb it with a basket of six eggs? And that’s not all. Those eggs were your source of food, and therefore, strength for your climb. Would you carry them all in one basket, or would you carry them separately?
Business is like that formidable mountain