When forming a business, one of the first things every entrepreneur should think about is their ultimate exit. For most, this is the farthest thing from their mind. As any corporate attorney will tell you, in the same way in which you would plan to protect your children with the creation of a will, your […]
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Entries by acscreative
Question: What’s the going rate to hire a business owner these days? Or put another way… how much should an owner-operator pay themselves? In some privately held companies that may be a question that is answered by the Board of Directors. But in most privately held companies it’s a question answered by a single person: […]
Here’s a quick one: A common objection we see from owners exploring an exit is “well if my company is only worth X annual earnings, I could just keep running it.” And you know what? Yes, you could. In fact, you could keep running it until X approaches infinity.
We often throw around the terms “middle market,” “lower middle market,” and “Main Street.” These are pretty common terms in the finance, banking, and M&A world, but probably less so to most business owners and entrepreneurs. For the sake of clarity we thought we’d dive in. Defining Main Street vs. Middle Market It seems […]
When a buyer values a target company, the buyer’s valuation is based on the target company’s financial condition on a specific date. In most instances, several months pass between that initial valuation date and the closing date, which is when the buyer acquires the target company. Purchase price adjustments need to be negotiated to reflect […]
So you’ve heard someone throwing around the term “Seller’s Discretionary Earnings” and you find yourself thinking “my earnings aren’t discretionary at all.” Let’s jump in and understand this oft-misunderstood term (which also, confusingly, goes by “Seller’s Discretionary Income,” SDE, and SDI…).
Your small business is ready to grow and you need a loan to make it happen. Just like with a personal loan or a mortgage, you will want to shop around and find the best rate and terms to meet your needs. Being prepared will be key to expediting the process. Follow these four basic […]
One of the challenges that we often face is correlating value to “sellability.” In many cases a business may have value to the owner, but there may be a very limited market for the company. (In fact, this notion is the basis of the concept of a Discount for Marketability.) For example, a small 3-person […]
Retirement planning is a long uphill battle. As financial planning professionals will tell you, the sooner you start putting in place a comprehensive plan, the better off you’ll be. Oftentimes, small business owners invest everything into their companies and bank on utilizing the proceeds from the future sale of the business to fund their retirement. […]
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