Wednesday, April 15, 2009
Thursday, April 9, 2009
Wednesday, April 8, 2009
Are Family-Owned Businesses Planning for the Future?
The 2007/2008 Family Business Study conducted by PricewaterhouseCoopers found that nearly half of family-owned businesses have no succession plan in place, despite 25% of them expecting to change hands within the next five years.
The majority of family businesses do not make it to the next generation and either are sold or cease operations upon the founder’s death. According to the Cox Family Enterprise Center at Kennesaw State University in Georgia, only one-third of family businesses, worldwide, are passed along to the next generation.
PricewaterhouseCoopers argues that family-owned businesses do not make it from one generation to the next because of a lack of planning.
Businesses are encouraged to create an exit strategy. For succession, outline the details for family members to join management and also encourage the successors to be involved in the business now.
An exit strategy to sell the business also requires careful planning. Business owners should seek guidance from their attorney, accountant and business broker.
~Sunbelt Business Connections Newsletter
The majority of family businesses do not make it to the next generation and either are sold or cease operations upon the founder’s death. According to the Cox Family Enterprise Center at Kennesaw State University in Georgia, only one-third of family businesses, worldwide, are passed along to the next generation.
PricewaterhouseCoopers argues that family-owned businesses do not make it from one generation to the next because of a lack of planning.
Businesses are encouraged to create an exit strategy. For succession, outline the details for family members to join management and also encourage the successors to be involved in the business now.
An exit strategy to sell the business also requires careful planning. Business owners should seek guidance from their attorney, accountant and business broker.
~Sunbelt Business Connections Newsletter
Tuesday, April 7, 2009
Before You Buy That Small Business
Before You Buy That Small Business
Buying an existing business is often safer than starting one on your own. But watch out for these red flags.
By Cliff Ennico June 18, 2008
There's no doubt that buying an existing small business is less risky than starting one from scratch. Why? Because, unlike a startup:
•the business has equipment and inventory;
•the business already has a location, and maybe there's a few more years left on the lease;
•the business has employees, some of whom you may actually want to keep;
•the business has customers, most of whom probably will stick with you (unless this is a professional service business or practice); and
•most importantly, the business has a track record--you can look at the business' books, records and tax returns and get some sense of how much money you will make.
But there's still risk. Whenever you buy an existing business and look at its records, you're looking at the past. There's no guarantee things won't change going forward. If you're negotiating to buy a business and you think the seller is giving you a great deal, be very suspicious--there's probably something heading down the road at 90 miles an hour that will blow this business apart when it hits.
To View the entire article click HERE
Larry Battershell
317-908-9550
inbizsales@aol.com
Buying an existing business is often safer than starting one on your own. But watch out for these red flags.
By Cliff Ennico June 18, 2008
There's no doubt that buying an existing small business is less risky than starting one from scratch. Why? Because, unlike a startup:
•the business has equipment and inventory;
•the business already has a location, and maybe there's a few more years left on the lease;
•the business has employees, some of whom you may actually want to keep;
•the business has customers, most of whom probably will stick with you (unless this is a professional service business or practice); and
•most importantly, the business has a track record--you can look at the business' books, records and tax returns and get some sense of how much money you will make.
But there's still risk. Whenever you buy an existing business and look at its records, you're looking at the past. There's no guarantee things won't change going forward. If you're negotiating to buy a business and you think the seller is giving you a great deal, be very suspicious--there's probably something heading down the road at 90 miles an hour that will blow this business apart when it hits.
To View the entire article click HERE
Larry Battershell
317-908-9550
inbizsales@aol.com
Wednesday, March 18, 2009
SBA News! Update!
U.S. Small Business Administration
-- News Release --
***********************************************
Release Date: March 16, 2009
Contact: Mike Stamler (202) 205-6919
Release Number: 09-17
Internet Address: http://www.sba.gov/news
Statement from SBA Acting Administrator on Recovery Efforts Announced by President Obama Today
WASHINGTON – The following statement was issued today by Acting Administrator Darryl K. Hairston of the U.S. Small Business Administration following the announcement by President Barack Obama of important steps being taken by the SBA and the U.S. Department of Treasury to address the economic challenges facing small businesses and entrepreneurs across the country.
“U.S. small businesses employ about half our nation’s workers and over the last decade have created about 70 percent of all new jobs. But their access to credit and lending markets has dried up, making it harder every day for small businesses to keep their doors open and their employees working. American small businesses are one of the strongest engines for economic prosperity in the world, and we can’t let this crisis continue to undermine their growth and potential. Today President Obama reiterated his belief that we owe it to America’s small businesses to be the partner they need in the midst of this crisis. At SBA, we couldn’t agree more.
“SBA this week is implementing two key provisions laid out in the Recovery Act – we are temporarily eliminating certain loan fees and raising guarantees on some 7(a) loans up to 90 percent. With these critical steps by SBA, and the Treasury Department’s commitment of up to $15 billion aimed at getting lending markets flowing again, we are standing up with small business owners across this country and telling them how we are going to put much-needed capital in their hands.
“We hope small businesses will take the opportunity to ask their banks about the SBA loans that might be available to them. And, we encourage community banks and other lenders to work with us to reach as many qualified borrowers as we can during these difficult times.”
Beginning today, the SBA will:
• Temporarily raise guarantees to up to 90 percent on SBA’s 7(a) loan program, through calendar year 2009, or until the funds are exhausted. This increase in guarantee levels will help provide banks with the greater confidence they need to extend credit during the current recession, will mean more capital available to small business owners around the country.
• Temporarily eliminate fees for borrowers on SBA 7(a) loans and for both borrowers and lenders on 504 Certified Development Company loans, through calendar year 2009, or until the funds are exhausted. This will mean more capital available to small businesses at a lower cost. The fee elimination is retroactive to February 17, the day the Recovery Act was signed. SBA is developing a mechanism for refunding fees paid on loans since then.
Additionally, the President announced today that the Treasury Department will commit up to $15 billion to help unlock the frozen credit markets by purchasing small business loan securities currently frozen on the secondary market. By purchasing these securities, it will unlock these secondary markets, and in turn, free up more capital to jumpstart lending for small business owners. The SBA has worked closely with the Treasury Department to address the need to unlock these secondary markets for SBA loans.
For more information on the SBA and Treasury initiatives announced today by the President, visit the SBA Web site at www.sba.gov.
###
-- News Release --
***********************************************
Release Date: March 16, 2009
Contact: Mike Stamler (202) 205-6919
Release Number: 09-17
Internet Address: http://www.sba.gov/news
Statement from SBA Acting Administrator on Recovery Efforts Announced by President Obama Today
WASHINGTON – The following statement was issued today by Acting Administrator Darryl K. Hairston of the U.S. Small Business Administration following the announcement by President Barack Obama of important steps being taken by the SBA and the U.S. Department of Treasury to address the economic challenges facing small businesses and entrepreneurs across the country.
“U.S. small businesses employ about half our nation’s workers and over the last decade have created about 70 percent of all new jobs. But their access to credit and lending markets has dried up, making it harder every day for small businesses to keep their doors open and their employees working. American small businesses are one of the strongest engines for economic prosperity in the world, and we can’t let this crisis continue to undermine their growth and potential. Today President Obama reiterated his belief that we owe it to America’s small businesses to be the partner they need in the midst of this crisis. At SBA, we couldn’t agree more.
“SBA this week is implementing two key provisions laid out in the Recovery Act – we are temporarily eliminating certain loan fees and raising guarantees on some 7(a) loans up to 90 percent. With these critical steps by SBA, and the Treasury Department’s commitment of up to $15 billion aimed at getting lending markets flowing again, we are standing up with small business owners across this country and telling them how we are going to put much-needed capital in their hands.
“We hope small businesses will take the opportunity to ask their banks about the SBA loans that might be available to them. And, we encourage community banks and other lenders to work with us to reach as many qualified borrowers as we can during these difficult times.”
Beginning today, the SBA will:
• Temporarily raise guarantees to up to 90 percent on SBA’s 7(a) loan program, through calendar year 2009, or until the funds are exhausted. This increase in guarantee levels will help provide banks with the greater confidence they need to extend credit during the current recession, will mean more capital available to small business owners around the country.
• Temporarily eliminate fees for borrowers on SBA 7(a) loans and for both borrowers and lenders on 504 Certified Development Company loans, through calendar year 2009, or until the funds are exhausted. This will mean more capital available to small businesses at a lower cost. The fee elimination is retroactive to February 17, the day the Recovery Act was signed. SBA is developing a mechanism for refunding fees paid on loans since then.
Additionally, the President announced today that the Treasury Department will commit up to $15 billion to help unlock the frozen credit markets by purchasing small business loan securities currently frozen on the secondary market. By purchasing these securities, it will unlock these secondary markets, and in turn, free up more capital to jumpstart lending for small business owners. The SBA has worked closely with the Treasury Department to address the need to unlock these secondary markets for SBA loans.
For more information on the SBA and Treasury initiatives announced today by the President, visit the SBA Web site at www.sba.gov.
###
Friday, March 13, 2009
What Type of Business Entity Should You Form?
You will need to decide how to structure your business entity. Here are six types of business entities and their differences:
Posted By:
Larry Battershell
Sunbelt Indiana Business Resource
317-908-9550
Thursday, March 5, 2009
Private Equity Groups Growth
One of the major market shifts for the acquisition of privately-held companies has been the growth in the number of Private Equity Groups (PEGs). PEGs have become key players in business acquisitions. They offer flexibility as a liquidity source, giving entrepreneurs the ability to take some cash off the table, recapitalize their company or simply sell and move on. What do PEGs look for in an acquisition?: ongoing, profitable businesses that demonstrate growth potential.
The private equity market had traditionally been restricted to acquiring larger companies. But increased competition for those larger operations, the greater growth potential of smaller firms, and an easier path to investment of smaller firms. The primary ingredients that PEGS look for in an acquisition are:
· Superior profit margins
· Sustainable and defensible market niches
· Unique business models
· Stable product life cycles
· Strong growth opportunities
· Strong track record
· Low customer concentrations
· Deep management team
PEGs have become a major force in the acquisition arena. They can also be thought of as strategic acquirers in certain instances, when they own portfolio companies in your industry or a related area that addresses the same customer base. These buyers may be in a position to pay more than an industry or strategic buyer that does not have this financial backing.
The private equity market had traditionally been restricted to acquiring larger companies. But increased competition for those larger operations, the greater growth potential of smaller firms, and an easier path to investment of smaller firms. The primary ingredients that PEGS look for in an acquisition are:
· Superior profit margins
· Sustainable and defensible market niches
· Unique business models
· Stable product life cycles
· Strong growth opportunities
· Strong track record
· Low customer concentrations
· Deep management team
PEGs have become a major force in the acquisition arena. They can also be thought of as strategic acquirers in certain instances, when they own portfolio companies in your industry or a related area that addresses the same customer base. These buyers may be in a position to pay more than an industry or strategic buyer that does not have this financial backing.
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