News

What Are You Selling & Why It Matters: Shedding light on the important considerations of an assets vs. stock sale

As a firm that often works closely with entrepreneurs in the transition of their business, be it through a long range exit planning exercise or within the context of a sell-side M&A transaction, we are acutely aware of how complex and nuanced the sale process has become. Owner-operators, management teams, Boards, and more generally, the principal stakeholders need to wrestle with a host of issues. The laundry list includes establishing valuation expectations, defining strategic and cultural fit, securing livelihoods for their valued employees, determining what kind of process they want (auction or otherwise), formulating a buyer universe, pre-transaction due diligence, post LOI due diligence, reps and warranties within the P&S, and so on and so forth.

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Why You Must Audit Your Life Insurance Policies

Your grandparents may have purchased a permanent life policy, put it in a drawer and forgotten about it—and that might have been okay—but today’s life insurance policies are complex financial instruments and need to be monitored like any other asset in your portfolio. A permanent life insurance policy can be one of your most important financial assets and you want it to be there for your beneficiaries when it’s needed the most, or perhaps for your own retirement, if you purchased a cash accumulation contract. The best surprise is no surprise and a life insurance policy surprise is almost never good. A policy audit can tell you if your policy is in trouble or headed for it, and what corrective action may be possible.

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Shifting Sands in Valuation: Change May Be Coming for Valuing Family-Owned Businesses

I will freely admit writing a light, easy read on potential changes to Treasury Regulations as it pertains to valuing ownership interests in family-owned businesses may not really be a thing, but, in our minds, it is front and center. If you are not in the field of financial and estate planning, this issue may not be on your radar, but for folks out there who own or are actively involved in a family enterprise, it should be. read more…

A Tax Tale

We thought we’d have some fun with our Blog this month, so gather ‘round the campfire friends for a Tax Tale that may become the stuff of legend to be repeated around campfires for years to come. (Okay, maybe not.) Your narrator is Chuck Baldwin. “This is a true story of tax savings thanks to creative planning with some little known techniques. Some of names have been changed for all the usual reasons. So break out the marshmallows and lend an ear.“There once was a business owner who was very happy because his business was making lots of money. Let’s call him Max Tax. read more…

Make Your Company More Valuable: 7 Helpful Strategies

A business and its owner(s) maintain an interesting relationship. The interplay between the individual and the organization often represents a tremendous source of pride and accomplishment as well as a wellspring of stress and worry. Setting aside these feelings for the moment, a business more tangibly provides the means by which owners create value for themselves (let’s not forget other shareholders and employees). Generally speaking, value creation comes in the form of providing an earnings stream over the course of a business’s life that allows the bread to be put on the proverbial table. read more…

A Top Ten List: Pitfalls to Avoid When Selling Your Business

Let’s get right to the point. Top 10 lists are fun, especially when you have the wit and studio audience that Dave Letterman had. Well I do not have either, but I will try to run with this well established concept for my blog, this time within the framework of a business sale. I appreciate that it might be rather cavalier for me to volunteer a few succinct bullet points about the prudent steps to take in a sale process, and expect to have encapsulated every aspect that is imperative for a business owner to consider. read more…

Exit Planning – Why it Matters

“I’m ready to sell my business.” Many business owner conversations with Baldwin & Clarke Corporate Finance (BCCF) (our investment banking arm) begin just that way. Unfortunately, their businesses may not be as ready as they are: at least not for what they think it’s worth or need. What it’s worth to him or her may not be what it’s worth from a buyer’s perspective. One expert estimates that only 3% of businesses are capable of being transferred in a way that achieves the owner’s goals and objectives. read more…

Buy-Sell Agreements – Preventative Medicine for Business Continuity

Ok, I admit it. I was recently drawn into watching one of the ubiquitous legal shows on TV the other night. (Hey, at least it was not CSI Topeka.) This particular episode revolved around a successful business with two partners. As the story unfolded, one of the partners experiences an untimely demise and the surviving partner is now a partner with the deceased partner’s wife. The balance of the show is filled with the requisite banter, scheming, and underhanded tricks, but ultimately the newly forged (however forced) partnership works out their differences and make for a good team. The misadventure ultimately ends well. read more…

Pre-transaction planning: Take Time to Sharpen Your Axe

Pre-transaction planning. It is a rather uninspiring phrase that does not necessarily evoke a real visceral reaction to hit up the white board for some strategic planning. Who gets very excited about advanced planning when you have a business to run, goals to meet, and profit to earn? Well, I must admit, we do and we hope you will too as you read on. 

Let’s start with a little foundation building. Pre-transaction planning is the process of preparing your company, both operationally and financially, for the rigors of an eventual sale. In the M&A world, you can breakdown the sale process into the three broad categories of Planning, Execution, and Closing. It is our experience that most business owners and management teams focus intently on the latter two stages and do not always prioritize the investment of time and resources to plan for a successful transition well before the desired time to hit the market. It is this observed dynamic that has made Mr. Lincoln’s line “If I had eight hours to chop down a tree, I’d spend six sharpening my axe” apropos.  read more…

Market Insights – “It’s A Long Season”

If you’re like us and follow the markets like your local sports team, cheering and booing along the way, you may have heard an uptick in boo birds lately. Our humorous (we hope!) sports fan analogy is certainly not meant to trivialize concerns you may have about the stock market’s direction in the first week of the new year, especially in light of last quarter’s market results. Continuing the sports analogy, as the cliché goes, “It’s a long season, not a sprint”. Remember too, that a diversified portfolio is never fully exposed to what happens in the stock markets.  read more…

Life Insurance – Just A Policy to File Away or Powerful Planning Tool?

We recognize talk of life insurance does not typically gather a crowd around the water cooler at work, but as wealth advisors and planners, the proper use of this tool can be very impactful (in ways that are not always immediately appreciated too). In speaking with a long standing client the other day, we were reminded what a powerful tool life insurance can be.  read more…

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