Thinking About the Transition of Your Company?

by The Transition Companies

 

This could be the perfect time to start the process of transition out of your company. Selling a company properly is a “process” and not an “event.”

 

Are you thinking about the possible “transition” out of your company? Now might be a good time to start as it often takes a year or more to find just the right buyer. Selling a business is thought by many to be an “event” that happens similar to the sale of a house and then we move on. However the best way to sell is to think of selling as process or a gradual transition from one step to another until the deal is done. Consider the following offered by the Executive Team at The Transition Companies of Dallas, Texas:

 

Capital Gains Taxes Rates

Among the many reasons why you would be wise to start the exit process sooner than later is the Capital Gains Tax story. Many think that capital gains taxes are likely to increase soon. Federal capital gains taxes were reduced from 28% then to 20% and at last to 15%. Given the current climate in the White House, it is quite possible, some say quite likely, that the capital gains tax will increase. That means you will need to sell for a lot more to net the same amount.

 

Interest Rates Will Rise

Buyers tend to pay more when the cost of money is low. Lower interest rates make growth by acquisition a more attractive option than organic growth. A higher sale price and modest capital gains taxes add up to more dollars in the sellers pocket.

 

Buyers Are Still Plentiful

We know at The Transition Companies that Private Equity groups are major players in the M&A market. They have lots of cash and are searching for businesses to buy. Many are paying top dollar and are leveraging their purchases to the hilt.

 

Consider the Baby Boomers

Baby boomer business owners are just now beginning to think about exiting. It has been said that possibly 80% of business owners are thinking about selling, about 70% in the next three years. Competition will be keen for attractive buyers. You will need to offer a more attractive opportunity in the future to even be on the radar screen of the most desirable buyers once Baby Boomers start the transition of their companies to new ownership.

 

Are you prepared?

Many business owners think they are well-prepared, but an outside independent third party or a buyer might disagree. Start working on your comprehensive exit plan. It could take as much as three to five years to get your personal and business house in order. To maximize the net after tax dollars you walk away with, prepare now so you can exit for top dollar while market conditions are optimum. If you do not prepare properly, you might find that you missed the opportunity of your lifetime.

 

A neat and orderly transition always includes three phases:

1. A certified and accredited valuation, an executive summary of the company and an offering memorandum to put in front of buyers. There needs to also be an analysis of the strengths, weaknesses, opportunities and threats that face the company. This is called a SWOT analysis by some.

2. An aggressive and pro active marketing campaign ending with multiple buyers bidding for the company. One buyer is no buyer. You should have your company in front of 100 to 300 potential buyers.

3. A carefully planned due diligence process. The buyer must do it, but you must be in control of the way it is conducted. The Letter of Intent that starts the due diligence process must be done just right.

If you start early, plan wisely and get professional help if at all possible, you will transition out of your company with more money in your pocket.

 

 

The Transition Companies

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Baby Boomer Effect on Selling Your Business for The Most Money.

 

You, or someone very close to you, are part of 78 million Americans that make up the largest population segment in the United States: Baby Boomers. This generation is classified as anyone born between 1946 and 1964. According to a recent study by BIG Research, 9% of boomers with household incomes exceeding $50,000 are small business owners. Using simple math that means 7 million companies in the United States are owned by individuals 44 – 62 years old.

If you or a family member fall into this category (baby boomer business owner), what is your exit strategy with your business? Currently, 33% of business owners in America will successfully transfer their family business to the next generation (Family Firm Institute). If you fall into the majority of US business owners (67%), then your children (X & Y generations) have most likely opted to not follow in your footsteps of taking over the family business, leaving you with significant, life shaping decisions.  It is safe to say that 5 million baby boom business owners do not have a son or daughter aligned to take over their privately-held business (due to choice or circumstance). This massive group of societal leaders is now left with only a handful of options:

• Keep the business well into their retirement years, possibly leaving it to estate settlement proceedings
• Dissolve the business should competent leadership not be in place after retirement
• Sell the business to a qualified buyer and have financial stability for future retirement and heirs.

It is predicted that over the next 5-10 years, more privately-held US companies will be offered for sale than in any other time in history. This tidal wave of “for sale” companies flooding the market place is primarily due to baby boomers seeking retirement.

According to the recent Census it is estimated that there are approximately 60,000,000 people between the ages of 20 and 34. The direct effect of far fewer potential buyers in the next generation gives additional significance to the Law of Supply and Demand.  In addition, the mind set of this younger generation seems to make them less inclined to want to assume responsibility of business ownership and all that it entails. 

The sheer volume of companies for sale will inherently reduce purchase prices due to simple supply-demand economics; tipping the balance of available businesses for sale compared to capable, motivated business buyers. Trying to stand out in a crowd of sellers will be difficult due to a saturated marketplace of other baby boom-owned businesses. Those business owners that truly plan ahead and start executing their exit strategy today, can avoid a major dilemma and be prepared for the future (a flooded marketplace of similar companies for sale). http://www.busjrnl.com/article/20071205/BUSINESSJOURNAL/70810037/1209

The Transition Companies Baby Boomer Effect

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How Recycling Offers Cash Back

By Tom Tessin

One of the best ways to help our economy, our environment, and get cash back is by recycling. Recycling is not only a nationwide thing in America but it is being done world-wide. You would be amazed at all the things that you can recycle and get cash back. One of the popular items is plastics many bottles and containers are used to make carpets and the recycling centers are more than glad to pay you so much per plastic container. Along with that program companies who use cans to bottle soft drinks, juices and other liquids pay the consumer cash back for the return of the containers.

Since many of us are a computer user that means we need to purchase ink cartridges and the ink cartridge companies are willing to pay you to bring back your empties. Companies that sell car batteries are willing to give the consumer a core cash back fee as the manufacturer can reuse in order to create new batteries. These items are all harmful to the eco system if left in landfills. It is wise to utilize the cash back system in order to put money in your pocket but better yet to help our eco system. We only have one place to live and that is earth so we need to take care of it by using recycling we can do just that.

There are other places that offer cash back like when you buy a lot of product and need to take a wood pallet you will receive cash back for the return of the pallet. Insurance companies are willing to give you a big discount on your premium if you pay your bill and shop on-line so that they do not have to use paper. We need to save our trees and by going paperless we are doing just that. It is important that you think of the many different ways that you can get cash back by recycling or cut down on the cost of your bills by going paperless and shopping on line. The Holidays is a great time to get cash back by shopping on-line and going paperless. Many merchants offer you great bargains and cash rebates if you shop on the internet with them. I like to think of it as “go green”, “think green”, and “get green.” When you “go green” you are shopping paperless, “thinking green” you are saving in as many places as possible and of course “get green” means you are getting paid for recycling.

The Transition Companies Cash Back

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Recycling Means Saving In More Ways Than One

By: Ben Franklin

This great big planet seems to be getting smaller and smaller. As more people call it home, the need to conserve, preserve and recycle is becoming more and more evident. While it’s not possible for one person to solve all the world’s problems when it comes to preservation and conservation, a single human can make a huge difference in a single community or an area.

Recycling is one of the best ways a person can make a difference in their community. The effort is relatively simple, generally supported by curbside pick up and can even be financially beneficial. Plus, it benefits the planet.

If you doubt the necessity to recycle, take a look at your weekly trash. Now consider what items could be pulled out and saved from a trip to a landfill. Cuts the number of bags down by a lot, doesn’t it?

If you’d like to get started recycling, but don’t know how, here are some ideas:

* Check with your local government authority to see if there are curbside recycling programs in place. If your government doesn’t have them, perhaps your trash handlers do. In many communities there are special, designated days for recycling of certain items. There’s not even a need to take the recyclables to a special collection site – it comes to you instead.

* If there is a recycling program in place, find out its rules and regulations. Depending on location, some items may be accepted and others may not. There may even be special bags or bins necessary to make sure the pick up program can easily identify what’s meant to be recycled and what’s meant for the landfill.

* If you don’t have a recycling program, check with a recycling company. These do exist and they handle everything from cardboard to aluminum and copper and more.

In general, the following items are accepted by recycling programs. Keep in mind though some of these items can net you cash if you turn them into a company rather than put them through a curbside service. In some cases, a lot of money.

* Glass. Many types of glass can be recycled. This will oftentimes have to be rinsed out. Check with your local program for information on types accepted and prep steps necessary.

* Aluminum. This is one that can net you money. Check for local regulations on its recycling, but keep in mind if you go through a lot of cans, you could be throwing money away if you don’t recycle, not to mention wasting landfill space.

* Copper wires. Electricians often come into contact with this. When stripped of its covering, this can net some serious cash at a recycling place.

* Newspapers. These are great for recycling. There’s no need to throw them away. Newspapers can be worth money for those who recycling them, too. In fact, many youth organizations do newspaper drives to make themselves some extra cash. Rather than selling a product, they collect your junk for their fundraising.

The Transition Companies Saving In More Ways Than One

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