Gordon Gekko Had It Wrong, Dull is Good

“These Harvard students think they understand entrepreneurship, let's see if they really do.” These were my final words to Sam (not his real name) as he and I walked into a recent class at Harvard Business School. I had taken Sam to Boston to participate in a Harvard Business School class discussion based on a case study I had written on his company. As we walked into the class Sam knew he was about to get a boatload Read More

Say What? No License Required?

“Please put that phone away, I don’t want you taking a picture of me doing this.” The locksmith didn’t seem in a good mood. He was using his considerable skills to pick the lock on my neighbor’s back door. My neighbor had left town earlier that morning. Just before he stepped onto a plane for a flight to the west coast, my neighbor realized he had inadvertently locked his back door and the housekeeper couldn’t get in Read More

Negotiated Sale or Auction?

“It is a match made in heaven. I’ve known for years they’d want to buy my company eventually. Should I negotiate just with them or take my company to market and try to bring in other bidders, you know, get an auction going?” Tom (not his real name) was ready to sell his company. Though having just celebrated his 73rd birthday, Tom was still going strong. The company he founded in 1982 was generating strong cash flow, Read More

The Strategic Buyer is the Seller’s Friend

“I just got a shocking offer for my company and I need to respond quickly. Can you come over today?”  I had met Lexi (not her real name) a few years earlier. Her father and I served together on a board at church, and I had admired from a distance the success of his business. Lexi had been in charge of the business since her father passed away after a sudden diagnosis of stomach cancer three years earlier. I spoke Read More

Three Benefits of Exit Planning

You know the ins and outs of your business like the back of your hand. In fact, you might be one of your business’ most essential assets. If that is the case, you may not maximize your value when you exit. That’s why we encourage owners to plan for their exit long before they are ready to exit, and here’s why…. 1.   You identify your goals Creating an exit plan allows you to think about what you want out of the Read More

Why Mediation Works!

Mediation is a process where parties in a dispute mutually agree to talk in hopes of finding a solution to their dispute. The process requires an impartial and respected third-party to facilitate the discussion. This person is called a “mediator.” Having no stake in the outcome, the mediator can help each party understand the point of view of the other, and move the parties in the direction of an agreement. More Read More

3 Reasons It’s Good to Have a Succession Plan, in Writing

As a business owner, you should start thinking about succession planning long before you actually need it. Said this way, when you need, it’s likely too late. What will be your business’s legacy? Who will take over for you? Will it still be the same company? Is selling an option for you? Writing down your answers will help you focus on the reality of the process. Going through this exercise before you are ready to Read More

3 Reasons It’s Important to Have a Succession Plan, in Writing

As a business owner, you should start thinking about succession planning long before you actually need it. Said this way, when you need, it’s likely too late. What will be your business’s legacy? Who will take over for you? Will it still be the same company? Is selling an option for you? Writing down your answers will help you focus on the reality of the process. Going through this exercise before you are ready to Read More

Cash is King, and Queen

I am always amazed when I meet with a business owner who does not maintain and regularly update a cash flow projection for their business. It’s like driving a car with no gas gauge. It will work for a while, but not for long. I’ll say it this way, I’ve never met with the owner of a good business who does not maintain and regularly update a cash flow projection. Here are a few tips to consider when starting Read More

Business Valuation = Tangible Assets + Goodwill

Valuation of a business (large or small) comes down to forecasting its future cash flow. When the business is sold, the seller and buyer have to agree to how to allocate the valuation between tangible asset value and goodwill (intangible asset value).   Since goodwill is subjective, there is a risk of overvaluing or even undervaluing a company’s goodwill. Therefore, it is a mistake to try to value goodwill. Read More