BSBR Educational Resources
Part 1: Deal Team
Why would a small or medium size business want to go it alone, considering publicly traded companies that are part of a Mergers & Acquisition process always have professional representation? Is it the thought of paying for representation? Do owners question the return on investment (ROI)? Do they consider the amount of time and resources it takes to successfully navigate a business transaction? Do they have a reasonable expectation of value?
According to Bo Burlingham Auth…
According to many business surveys, approximately 85% of business owners do not know the value of their largest asset, their business. This was also the case for the owner of a manufacturer who was counting on the proceeds from the sale of the business to fund his retirement.
Over the years, he had a gut feeling that the business was worth $8M but had no documentation backing up that figure. The owner was beginning to feel burnt out but continued on as usual because $8M did not fund his retire…
Seller’s Discretionary Earnings...AKA SDE
A seller’s discretionary earnings are the pretax and pre-interest profits before non-cash expenses, one owner’s benefits, one-time investments, and any non-related income or costs.
All of the cash at the “bottom line” of your financial statement is available to the business owner.
Why it Matters to You
This tool is used to help you, the business owner, make accurate comparisons between companies. SDE can so…
Losing a family member is never easy. There are so many things that need to be dealt with, funeral planning, handling financial affairs, grieving. In the midst of all of this, would you want to force your family to also deal with trying to take over or sell your business?
I have worked and spoken with many business owners who express deep pride in all of the effort and sweat equity that has gone into building their companies. Their families have been by their side over the years, supporting …
Earnings Before Interest, Taxes, Depreciation, Amortization...AKA EBITDA
EBITDA is a proxy for free cash flow. It adds back the non-cash expenses (depreciation and amortization) as well as the interest and taxes that are a consequence of management decisions. Not every management team would deploy the same capital structures, so these expenses are added back in the calculation.
A tool to evaluate a company’s performance without factoring in finance, acc…
It is not uncommon that in conversations with a business owner, they express frustration at knowing there is a major growth opportunity in front of them they are simply not equipped to capture. There are different obstacles these owners identify, but most of them boil down to a lack of capital, a lack of expertise, or the wrong internal management system. This situation is a perfect opportunity for a growth recapitalization. The concept is that the owner sells off a portion of their equity to cr…
Letter of Intent...AKA an LOI
This is the initial offer a buyer submits to a seller. It lays out:
- general terms of the purchase,
- business value/purchase price,
- real estate plan (if selling RE) purchase/value, structure,
- source and use of funds,
- working capital PEG,
- seller considerations,
- transition timing,
- employment agreement,
- indemnity cap and basket and
- due diligence expectations.
These are initial offers to buy your bu…
Well, we haven’t seen many decades open up like the roaring 2020’s! With a global pandemic, an economic downturn, a breakdown of supply infrastructure, food scarcity like we have not seen in generations, and a presidential election; it is little wonder that most of the world is closing out the year in a state of fear and emotional fatigue. The business community has either seen growth through capitalization of a new consumer reality or, is on the brink of closure eagerly awaiting word on what th…
Dr. Gruder is Blue Sky’s business psychologist. Dr. Gruder discusses overcoming toxic workplaces, creating accountability, and practical ways to implement accountability and reverse a toxic workplace.
Dr. Gruder defines accountability as:
“taking responsibility for the impacts that the choices I make about how I spend my life energy have on those to whom I’ve made commitments.”
To help illustrate this, he defines mis-using accountability as coercion or punishment that destroys good will. …
Thinking today about how I can bring hope and inspire anyone reading this… I’m torn because I don’t want to sugarcoat the reality, but I also feel like this reset is probably the greatest thing for business in our lifetime!
You might ask, “What are you talking about?”
Well, through my eyes, at least for the short term of things…what I am seeing is that this could be the best opportunity for a business because our competitors have went in to hiding and we can use this time to capitalize on thei…