Selling a Company

Are your Independent Contractors Really Employees?

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...

How to Avoid a Proprietary Deal

When a business owner receives unsolicited interest from a buyer, whether the big name in the industry or a unique financial buyer, his first instinct is often to pursue it right away; it seems natural to follow that path. The danger is that you give up negotiating control, the powerful benefit of competition, and at that point, deals tend to derail.

John Warrillow, author of Built to Sell, explains why this is and how to avoid it:

8 Warning Signs You're a Hub-and-Spoke Owner

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: 

Have You Fallen Into the Mile Wide Trap?

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.

One Great Question to Ask Yourself

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

Critical Value Factors When Selling a Business

Part 3 of 3 in the Big Sky Business Journal

In a past column, we reviewed some high level considerations for a business owner who is thinking about a future ownership transfer. The article followed a conversation with Jim, who is a business owner wanting to make sure he has a valuable and sellable business when he decides to retire. In this article, we will look at some of the top factors that make a business valuable and sellable.

Value drivers are the business attributes that give a business real and perceived value. A buyer's questions will be centered on the value drivers in the business.

Are You Asking the Right Questions About the Future of Your Business?

Part 2 of a 3 part series published in the Big Sky Business Journal. 

The other day a business owner asked me, "How can I be confident that I will have a valuable and sellable business when the time comes for me to leave my business?"

All business owners have reason to ask Jim's question, because a transfer of ownership is inevitable. The timing and the ideal buyer for each business will vary, but the certainty of a sale at some point is unavoidable.

For most entrepreneurs, their business is their most valuable asset, the place they spend most waking hours, and a primary part of their identity. One of Jim's fears in a potential ownership transfer is failing to capture the full value from his two decades of building a business. Jim is part of the majority of business owners that do not have an exit or succession plan – 85% according to M&A Today magazine. With careful planning in advance of a sale, Jim can gain confidence in the success of his future ownership transfer.