Economist Milton Friedman provides a compelling rationale for the benefits of free enterprise directing resources versus political control over the means of production in this fun exchange with a very youthful Phil Donahue.
If you returned from a one-month vacation would you come back to a business that would be operating as well as before you left? Businesses that are the most valuable and the most marketable are those that don’t require daily management from an owner. If through systemization, automation, documented processes, procedures, cross-training, and delegation the business can maintain good performance for a month in your absence, it will be a more compelling acquisition target. If you are confident your business will perform well in your absence and you are getting ready to sell the business in the near future, you may want to consider taking a 3-4 week documented vacation. If your company is able to demonstrate good performance during your time away, it will give an acquirer greater confidence of continued solid performance post acquisition, and that, in turn, may lead to a higher price and better terms. So, go ahead: you have permission to take a long vacation.
"Exit Planning - Maximizing Wealth & Avoiding Common Pitfalls" - Panel Discussion in Portland, Oregon on Tuesday, May 19, 2015 at 7:30 am
Are you a business owner or a professional who serves business owners? If so, please join us for a presentation and panel discussion about exit planning including common pitfalls and ways to maximize wealth. The event will be held in Portland, Oregon on Tuesday May 19, 2015 starting with a continental breakfast from 7:30 - 8:00 am, followed by the presentation from 8:00 - 9:00 am, with a Q&A panel discussion from 9:00 - 9:30 am.
The panel of experts includes: Frank Dane and Dan Jackson of B2B CFO; Nick Mesirow of the law firm Moomaw Mesirow & Godfrey; Brad Buchholz of Banner Bank; Mark Baker & Lisa Brumm of AXA Advisors; and Eric Williams of Codiligent.
Advance tickets are required ($10). All attendees will receive the book "The Exit Strategy Handbook" a $17.99 value. For location details and to reserve a space use the following link: Buy a Ticket
One of the biggest risk factors for a business buyer is turnover of key employees in the company after the business is acquired. One of the biggest risk factors for a business seller is that around the time he wants to sell a key employee will leave the company, which may not only cause a decline in performance of the company but may also increase buyers' perceptions of risk. The greater the risk that a business buyer perceives when contemplating an acquisition, the less likely they are to complete the deal and pay a premium price.
Is there really much that can be done about this? After all, you can't force key employees to continue working for the company. You can, however, create attractive incentives for key employees to stay. If you structure it the right way it may help you sell your business, and possibly get a higher price.
How to do so? Create a bonus for key employees who remain employed after the business is sold. Codiligent business brokers are not experts at compensation or bonus programs. However, we would encourage you to discuss the following ideas with professionals who have deep knowledge of employee compensation plans:
What's an appropriate amount for a retention bonus? Here are some of the factors to consider:
Buy and Sell Well
Codiligent Business Brokers' blog on entrepreneurship, capitalism, and successfully buying and selling businesses.
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