Got Exit Strategy Blog

BE INFORMED AND PREPARED!
BUSINESSES SUCCESS AND EXIT STRATEGY GO HAND IN HAND.

PART I

Janet Ackerson, EA, CBI
Doug Robbins, FCBI, M&AMI, MCBC, CM&A

A 62 year old business owner contacted us regarding his interest in a small insurance business. 

 During the current year, he had vacationed for eleven weeks and was planning to take fifteen weeks of vacation the following year.  Hence his conscience was bothering him because he was not sure he was being fair to his partners. 

In the course of conversation, he said he really enjoyed the business and did not want to totally retire.  We then discussed what he liked and disliked about the business that he was in, and discussed his relationship with his partners.  He then asked what we thought he should do, based on our experiences as a Business Intermediaries.

The discussion then turned to the issues surrounding his partnership arrangement. We were surprised to learn that there was no written partnership agreement.  The partners each had their own book of business, as well a book of business that they all shared.  They each paid their proportionate share of partnership expenses.  Each partner made a different amount of money.  Each partner had a different sense of the value model that they would use in calculating their book of business; and that this lack of value consensus could, at some point in the future, prove explosive.

These partners had not made provisions for the untimely demise of any of the partners.  Remember, these partners sold life insurance and financial planning to their clients. This is a real example of the Shoemaker not making shoes for his own family!

There are 15 steps to successfully planning for life after business.  Most people do not realize that the average entrepreneur spends about 68 hours per week involved in business activities.  In this case the business owner had made for plenty of leisure time; before planning his exit strategy.  Which, lack of planning could result in the leaving of a lot of money on the table when the business owner, finally, was no longer able to participate in the business.

What are our recommendations?  What should be done in a situation like this?

Catch us in the next issue of Insight to find out.  In the meantime; do you have an Exit Strategy for your business?  Here are just a few questions to ask yourself:

1)      What is that status of your corporate/business paperwork and minutes?

2)      Do you have Buy/Sell agreements in place?

3)      Will the business go to family?  Are they capable? Do they want it?

4)      What is your plan as you approach your retirement years?

5)      Have considered retirement and investment accounts? 

6)      What is your business worth?  How is the value calculated?

7)      Is there something you can do now to increase the value prior to selling?

Who are the professionals you should be working with?

Make it your goal to develop an Exit Strategy. See you next time for some answers.

Copyright Robbinex, Salt Lake.  All rights reserved.

Janet Ackerson, The Dimensions Group

bruce :: Jun.29.2008 :: Business Owners - General :: No Comments »

Is it “The End” or “The Beginning”?

Your Choice dictates your Success!

The final tax deadline of the season is upon us. October 15th and the tax year is behind us, or is it? Did you use this opportunity or just see it as another year of taxes associated with a governmental burden?

Taxes and their associated deadlines can be a blessing or a curse depending on how you use them and what you choose to draw from them. Stay with me here, you are about to discover the opportunity that this government imposed system brings to the business owner as well as the individual.

Experiencing the Mediocre:
We grudgingly gather up all of our information to take to our CPA. It’s that time again. He/She helps us fill in as many of those expense lines as possible, juggle things around and pay as little tax as legally possible. Everything goes into the box and we keep our fingers crossed in hopes that we don’t have to face one of those dreaded audits.

Whew! The taxes are done!

But Wait!!
Is there something to be gleaned from this governmental requirement???

Efficient, Effective and Informative:
What did you do this past year? How did it compare to the prior year? What about the year before that? Where did your business line up in relation to the Industry Standards, your goals and plans? Are the minutes for your Corporation complete? What about the Minutes for your LLC? (Did you know that you should keep minutes on all of your entities to enforce your entity status?)

What about rolling monthly planning? Did you update your 10/5/3 Program ™? What is your plan for the coming year? Are you on track based on your business planning?

The Beginning:
Obviously, you say there is always a beginning to get to the end. But are you conscious of your beginning and your ultimate end or exit? Are you living by default or by conscious, strategic planning?

As an IRS Enrolled Agent, licensed by the IRS, with thirty years of tax preparation and planning background, it is natural for me to think in terms of taxes and tax deadlines. However, during all of those years as a tax accountant, it never occurred to me the benefit of this annual ritual and what it could mean to me as well as my clients. It wasn’t until I became an Exit Strategist for Businesses that I saw what an opportunity the annual tax preparation requirements could be.

Currently, I am preparing a training program for my clients that I call “The Beginning of a Successful End” As an Exit Strategist and a Certified Business Intermediary, I am constantly in touch with Business Owners who don’t want to think about leaving their business. When it is brought up they often say, “Well, I was thinking somewhere in 3-5 years”. The translation “I don’t want to think about it”. Three to five years is far enough away that it is not threatening but close enough that it feels possible.

Just as Trusts and Estate Planning are one of those things we get to “someday”, Exit Planning is something we just put off if we do it at all. What I have found is that those who do not do their Exit Planning also do not prepare Business Plans or Strategic Life Plans. They simply live by default. Are you living a life of mediocrity? Could you utilize the requirements that we all face as a jumping off point to a life of satisfaction and fulfillment?

We are all creatures of habit. Deciding to utilize the tax deadlines as a business and year end review as well as a time for planning while everything is at your fingertips is an excellent utilization of an imposed requirement. Why not plan to take advantage of this time to really get and stay on track, utilizing it as a tracking and updating point for your overall business and life plan. I can hear the groans now, “It’s too much work! My CPA barely has time to do my taxes, let alone anything else!” There are a myriad of excuses and complaints.

It’s your life and your choice! You can continue down the road of excuses and mediocrity or begin the path to planned, monitored, and informed success!

Your Choice dictates your Success!

I am putting the program “The Beginning of a Successful End” on our www.gotexitstrategy.com web site. It will be offered in the Subscribers Section. I will discuss each section (See Outline below) and what you need to be aware of to put your Exit Strategy in place. Everything begins with a thought and the purpose of this is to stimulate the questions that will lead to that beginning.

For those that are looking for the Full Meal Deal, meaning I want it and I want it now. I am offering an in depth Webinar that will cover the topics outlined. It will be in four sections and will be covered over six weeks beginning with the Introduction, Sections 1 – 4 and a final wrap-up in the sixth week.

Finally, I will be offering a coaching series for each section of the Webinar. This is for those who are really ready to prepare and implement their plan. This will follow the Webinar and take each section to the next level.

Click HERE for the article including the course outline

Bruce Ackerson :: Oct.08.2007 :: Business Owners - General :: No Comments »

I’m very pleased to announce that our new web site has been launched as of 9:30PM Thrusday, September 20, 2007.

We are going to bring a LOT of information to the table for business owners, sellers and buyers. If you’re looking for information regarding preparing your exit strategy (and this is something that should be done from day 1 in your business plan) this is the place for you.

Don’t miss the exciting additional information availabe to our members.

Got Exit Strategy Subscribers

For abundant information.

Regards,
Bruce

bruce :: Sep.21.2007 :: Business Owners - General :: No Comments »

I’m excited to see this educational site launch. We have a lot of great information and are planning some terrific business personalities and educational teleseminars.

I’m anticipating about a week until we launch.

Hang in there.
Bruce

bruce :: Sep.13.2007 :: Business Owners - General :: No Comments »

Welcome everyone to the Got Exit Strategy Blog.  (edited 6/4/08)

Our goal is to provide education, help and information to business owners, sellers and buyers.
Here you can post public questions, answers, info and announcements. All information will be monitored and inappropriate info will be immediatly deleted.

There will be free information provided to everyone once we launch.
Please enjoy and if you need assistance, or help with your business, you can ask here or leverage the robust subscription service.

The subscription area is now open to all for free.  You need only request access using this link:
Request Access and fill out the contact form, requesting access.

Go to GotExitStrategy.Com and click on any of the “learn more” links.

Regards,
Bruce Ackerson

bruce :: Sep.05.2007 :: Business Owners - General :: No Comments »