Sellers generally prefer all-cash transactions; however, partial seller financing is often necessary in typical middle market company transactions. Additionally, sellers who demand all-cash deals typically receive a lower purchase price than they do when providing some financing. Although buyers may be able to pay all-cash at closing, they often want to structure a deal where the seller has left some portion of the price on the table, either in the form of a note or an earnout. Buyers view deferring some of the purchase price as providing leverage in the event that the owner has misrepresented the business. An earnout is a mechanism to provide payment based on future performance. Acquirers think there should be no problem with this type of payout if the business is as it is represented but the seller, who knows the business is sound under his or her management, will be concerned with the risk that the buyer will not be as successful in operating the business. Moreover, the … [Read more...]
6 Tips and 90 Days to Protect Your Business
The April 2020 COVID-19 centered article, by Inc. contributor Brian Hamilton, “6 Actions to Take in the Next 90 Days to Save Your Business,” isn’t pulling any punches. Hamilton believes that the next 90-days could be make or break days for business owners looking to navigate the choppy waters of the COVID-19 pandemic. His article provides readers with 6 actions they should take now to survive the economic fallout of the pandemic. Tip #1 Vigorously Control What You Can Hamilton’s first tip is to “Vigorously control what you can. Vigorously ignore what you can’t control.” As Hamilton points out, you can’t control the economy; instead, you need to focus on what you can control. His view is that there has never been a more important time to focus, “More than ever, you’ll need to go to war with things within your control.” Now is the time to exercise control. Tip #2 Guard Morale During tough economic times, employee morale can be a real issue. This brings us to … [Read more...]
Tips for Telework
Rajshree Agarwal, Professor of Strategy and Entrepreneurship at the University of Maryland, explores how to get the most out of telework in her April 20th, 2020 Forbes article “Three Keys to Engaged, Productive Telework Teams”. This timely article covers some very important territory for many companies dealing with the COVID-19 pandemic. We explore Agarwal’s key points so that you can help your team get the most out of telework. Agarwal notes that people may shy away from sharing personal information and feelings while in the office. But via video conferencing, the story can be different. This is one reasons it is necessary for employers to keep in mind that the dynamic between you and your employees is often different when using video conferencing. This will also be the case when your employees speak with one another. She prudently cautions business owners against taking a “business-as-usual” approach to the COVID-19 situation, as it can make them look both unnecessarily … [Read more...]
The Benefit of Failure – How to Learn from It Instead of Fearing It
Failure is rarely fun. But it is also a key ingredient in success. While failure can be painful, there is no doubt that the lessons that come from failure can be powerful teachers that provide life-long lessons and even life-trajectory altering results. Summed up another way, failure hurts. But on occasion, not failing could hurt more, especially in the long run. In her Inc. article, “Why Tons of Failure Is the Key to Success, According to Seth Godin,” author Sonia Thompson points out that most people “avoid failure like the plague.” Instead, they spend their time trying to achieve perfection. When adopting this approach, people miss all kinds of opportunities because they are afraid of damaging their egos. Embracing failure is a way to experience many “transformational benefits,” which would never be experienced without the lessons of failure. Thompson points to the work of 18-time best-selling author Seth Godin who has written about how entrepreneurs who fail more often … [Read more...]
How to Connect During a Crisis
Small business owners face new challenges during this crisis. Communicating with customers requires more focus and depth than ever before. In Mat Zuker’s latest article for Forbes Magazine, he cites Jay Mandel who runs The Collective NYC, a marketing consulting team focusing on a customer’s experience, who underlines the importance of businesses to understand their mission statement and values in order to re-enforce marketing strategies. Information is Crucial. Each customer visiting your website needs to understand your hours of operation, any limitations to service and what is being done to ensure cleanliness. Providing this information establishes to your customer your seriousness of precautions which will be appreciated during this time. Connect with your community. Focus on your employees, donate to charities and offer discounted or free products, as far as your financial situation allows. Provide Utility for your Customers. Now, more than ever, it is important to … [Read more...]
Do You Know What Kind of Business Owner You Really Are?
Does your business have real, long-lasting longevity or is your business a temporary entity that will vanish the second you stop working on it? In his insightful article in The Business Journals entitled, “Are You Living for Today as a Business Owner or Building Value?” author Kent Bernhard asks a very important question of readers, “Are you a lifestyle business owner or a value accelerator?” Many business owners have never stopped to ask this very important, yet basic, question regarding their businesses. So, let’s turn our attention to this key question that all business owners must stop and ask at some point. As Bernhard points out the core issue here is how a given business owner defines the idea of success for him or herself. As Chuck Richards, the CEO of CoreValue Software notes, “At the end of the day, a lifestyle business is just a job.” Richards goes on to note that this is fine for many people. But if this is the case, it is a choice that one is making. Therefore, … [Read more...]