Maximizing and Protecting Business Value
One of the most devastating attacks on the value of a business is litigation, including divorce. The average business owner will be sued seven times in the life of their business. This hurts a business and its value even if the litigation has no merit. Many business owners rely on their insurance or corporate structure to shield them in case of litigation only to find out they did not have the protection they thought they had, and now it is too late. The closer it comes to the time to sell the business, the more damaging the litigation can be. Regardless of the future outcome, few buyers want to purchase anything that might entangle them in the courts. So a business that has tremendous value without the litigation may become virtually worthless and not sellable during litigation. For the owner that is within five years of retiring and is counting on the sale of his company to fund that retirement, it could easily back him into a no-win corner.
Through years of buying, selling, and valuing companies, Advanced Business Group has seen how some of the most successful business people have developed strategies that not only protect the business assets from litigation, but also personal assets of owners and even prevent litigation from arising to begin with. The more you appear to own, the more likely you will be a target for litigation. If these are concerns for you or you are looking at retiring in the next five to ten years, it may make sense for us to be proactive in protecting your future.
Most companies have quality CPAs or Attorneys to help them with taxation. However, your professional advisor may not concentrate on the buying, selling, or valuing of companies. Because of this, you may be missing the tools you need to minimize the taxes you pay. Most people have no desire to sell a business (or gift one to heirs) if they have to pay all the proceeds in taxes.
Advanced Business Group was founded by a CPA and concentrates on buying, selling, and maximizing business value every day. Because of the large volume of transactions we have seen regularly over the decades, we can often help you and your professional advisors plan for and minimize the tax implications of buying or selling a company. Additionally, many day-to-day decisions made by business owners can have tremendous tax implications currently and when they go to sell. A lot of future business value can be lost with one decision today without the owner even realizing it. This happens a lot with businesses that grown from one level of business to a larger playing field. Minimizing or eliminating tax at the time of a transaction has allowed our clients to not only build business value, but keep more of that value after selling. If you have any concerns in this area, the sooner we can help you address them the better you will be-no matter when you actually sell.
Growing your business
One of the most consist issues we see with companies is the struggle to grow. Especially in a difficult economy, so many companies (that are experts in their fields) just can’t see the growth they desire. The issues here will usually fall into two categories: business development and business acquisition.
Low closing rates, low margins, flat sales, and an inability to reach the target market are just a few of the regular problems you may be facing. Each of these issues can diminish and destroy business value. If you are frustrated with telling everyone “how long you have been in business”, “how great you are”, and “how you are the best at customer service” without seeing the growth you desire, it may make sense for us to make some changes. These type of “benefits and features” are the same things all your competitors are telling the public too. Even the bad companies out there will not tell you that they are new, mediocre, and have terrible customer service!
In addition to business development, there is a tremendous way to grow a business that is seldom taken advantage of by most business owners because they concentrate solely on internal growth. Business acquisition can double, triple, or quadruple the size of your company almost overnight. We have helped many businesses that took five or ten years to grow internally to double their size in a month. Even better, if done properly, the risk of business acquisition is much less than opening a new location and competing against someone that has been there for 20 years. If done properly, even small companies can grow much faster and less expensively through acquisition than through the traditional growth methods. The big difference between business development and business acquisition (other than speed) is cash flow. Business development usually means spending money now in hopes of increasing cash flows later. Business acquisition should mean spending money now to increase cash flows now!
Growth through acquisition can be a tool in your toolbox that is ready to use whenever you need it. When the right opportunity arises and the tool is not there, you will usually miss the opportunity. Business owners fail to look at acquisitions because they think it takes a lot of money, they are afraid of buying a “hot potato”, or they are just unsure about the best process to follow. Advanced Business Group will help you combine acquisitions with the business development plans and processes that maximize your existing operations and grow your business value so you will be in the driver’s seat no matter when you decide to sell or gift your business to your heirs!
There are many more issues that impact your business value than just the few above. Sadly, most business owners do not start thinking about business value until the heart attack strikes or they decide to retire. Many times, this has already limited the value you will receive for the years of hard work. Items as simple as choosing a company name and business entity can create a massive loss on value. Unlike real estate, which tends to grow value over the passage of time, a single wrong decision can destroy your business value. If you are a business owner or are planning to be a business owner, the time to start maximizing your value is now. We have assisted many great and successful business owners worth millions and then we have sold their business to people that are successful enough to buy them. This gives you direct access to much of what made those people successful, just by giving us a call.