26Jul, 2023
    It’s Baffling How Little Thought Owners Put Into Maximizing Business Value When Preparing for a Sale

    When the time comes to sell a business, owners naturally want to obtain the highest possible return on their investment, right? Unfortunately, many owners overlook the significance of how to prepare for a sale, leading to missed opportunities and undervalued businesses. Maximizing business value not only ensures a more substantial financial gain but also signifies the culmination of years of hard work and dedication.

    maximizing business value prepare for a sale

    I am always shocked speaking to business owners when they have finally made the decision to sell; invariably, the price is too high and they leave money on the table at the same time. Kelly, how can the price be too high and be leaving money on the table? That is a great question. They make a classic mistake….going for a valuation too soon and not covering all of their basis.

    As business owners, the thought of selling your company might not be at the forefront of you mind, much less considering maximizing business value because selling is often an emotional decision rather than a strategic one. It’s not your fault. You have been told to “get a valuation up front, so then you know what you’re dealing with.” Unfortunately, that’s all wrong. However, it is crucial for entrepreneurs to recognize that maximizing the value of their business should be a continuous and strategic process. This article delves into the importance of preparing a business for sale, outlines steps to maximize its value, and emphasizes the human aspects and buyer demands that can significantly impact the overall worth of your company.

    Understanding the Sale Process

    Before delving into how to maximize business value, it’s crucial to understand the sale process itself. Preparing for a sale involves meticulous planning, financial evaluation, and strategic decision-making. Some common mistakes include undervaluing the company, neglecting necessary improvements, and insufficiently considering legal and compliance matters. To really understand the complexity in today’s market of selling your business, check out Chapter 8 “Due Diligence and Closing the Sale” from Maximizing Your Exit Strategy: A Guide To Selling Your Business in Today’s Market. Click Here. In this chapter you will learn the thoroughness of the due diligence process and the steps it takes to close the sale. It takes more than wishful thinking; it takes dedication, persistence and patience.

    Steps to Maximize Business Value

    Conduct a Business BreakThrough Session

    In nearly every business book I’ve read, they recommend getting an appraisal or business valuation as the starting point. So, everyone runs to get the business valuation first. However, that’s approaching the process of selling your business backwards. The first step in preparing for a sale is to conduct a comprehensive business e-valuation called a BreakThrough Session (BTS). A BTS systematically evaluates your business from a 5-point inspection perspective, i.e. finances, marketing/sales, operations including technology, production/equipment, and human resources.

    Learn more about getting your personalize BreakThrough Session.

    Schedule your 30-Minute Strategy Session

    Professional appraisals are important, but it is too soon in the sales process and certainly not the place to start. We want to dig deep into your company provide you with an accurate understanding of your company’s opportunities to maximize business value. This third-party unbiased assessment serves as the foundation for subsequent improvement strategies, and eventually a business appraisal that has real concrete value.

    Improve Financials and Profitability

    Buyers are naturally attracted to businesses with healthy financials and a track record of profitability. Prior to a sale, owners should focus on improving financial metrics, reducing unnecessary expenses, gathering the supporting documentation and maximizing revenue streams.

    Strengthen Customer Relationships

    Strong customer relationships not only contribute to current profits but also enhance the company’s long-term value. Engaged and loyal customers are more likely to attract potential buyers and ensure a stable customer base post-sale. Plus the cost of good-will is priceless.

    Enhance Operational Efficiency

    Efficient operations result in increased productivity and reduced costs. Streamlining internal processes and optimizing resource allocation can substantially boost a company’s value. Managing inventory and cleaning out the closets are a good first step to supporting the financial picture.

    Invest in Marketing and Branding

    A well-established brand and effective marketing strategies can significantly differentiate a business from its competitors. Increased brand recognition can attract more potential buyers and elevate the company’s perceived value. All too often, companies overlook the importance of branding your brand in marketing materials and telling one consistent story across the board.

    Develop a Skilled Workforce

    Beyond financials and strategies, the human aspects of a business play a pivotal role in determining its worth. A strong company culture, dedicated employees, and a positive public image can sway potential buyers in favor of the business.

    So, regardless of whether you have a formal human resources department, a competent and motivated workforce is a valuable asset. Business owners should invest in employee development, talent retention, and succession planning to demonstrate a sustainable and well-organized business structure.

    Diversify Revenue Streams

    Relying heavily on a single product or service can be risky for potential buyers. Unless they are looking to expand or supplement their own products and services, you might find an uphill battle to sell your company at the highest valuation. Diversifying revenue streams reduces this risk and positions the business as adaptable and capable of withstanding market fluctuations.

    Protect Intellectual Property

    Intellectual property, such as patents, trademarks, and copyrights, can significantly impact a company’s value. Ensuring proper protection of these assets is crucial during the sale process.

    Streamline Legal and Compliance Matters

    Untangled legal and compliance matters instill confidence in buyers. Addressing any outstanding legal issues and ensuring compliance with relevant regulations is essential. This also means, buyers will look for potential risks during the due diligence. By identifying and mitigating these risks in advance, sellers can maximize business value and make it more attractive to buyers.

    Considering Perplexity and Burstiness in Maximizing Business Value

    Apart from the traditional aspects of business value, it’s essential to consider perplexity and burstiness. Perplexity refers to the complexity and uniqueness of a business that makes it difficult to replicate, adding to its value. Burstiness refers to the potential for rapid growth and expansion, demonstrating the untapped opportunities that can attract buyers.

    Engaging the Buyer: The Human Side of Business Value

    Once you have your house in order and operating at peak performance, you want to engage with the buyer and make an irresistible offer they can’t refuse. To attract multiple buyers, create a compelling and professional presentation (commonly called a “pitch deck” or “information memorandum”) that showcases your company’s value proposition, financials, operations, management team, and future opportunities. It should tell the story of where you started and where the company is headed. Demonstrate potential for future growth that might involve developing new products, expanding into new markets, or increasing marketing efforts.

    By following these strategic steps and considering both financial and human factors, you can significantly enhance the worth of your business. This preparation will not only lead to a more profitable sale but also serve as a testament to their hard work and dedication.

    Want to learn more about maximizing your business value?

    BLS Funds
    27Jun, 2023
    Bridge loan terms tailored to meet your needs…

    Bridge loan terms tailored to meet your needs..

    Commercial real estate investors today are often asset rich but temporarily liquidity poor and need to access capital quickly in order to take advantage of a time-sensitive situation. Bridge loan terms tailored to meet your needs is your solution.

    WE CAN CLOSE In as little as 5 days! We put our borrower’s needs first. We care about what you care about. We’ll create loan terms tailored to meet your individual needs.

    Bridge loan terms to meet your investing needs.
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    About Business Loan Solutions

    It is a long established fact that the business of lending money is ever changing. As a business owner or investor, you need to consult with an expert, someone on your side to navigate the lending options from the BEST lenders in the market.

    18Jun, 2023
    Unlocking Hard Money Loans for Rental Properties

    Unlocking Hard Money Loans for Rental Properties

    Are you an aspiring real estate investor looking to enter the rental property market but facing challenges in securing financing? Look no further—hard money loans may just be the solution you need. In this comprehensive guide, we will delve into the intricacies of hard money loans for rental properties, providing you with valuable insights on how to successfully secure funding and surpass the competition.

    Understanding Hard Money Loans

    In the realm of real estate investment, hard money loans have emerged as a popular choice for financing rental property acquisitions. Unlike traditional loans offered by banks or credit unions, hard money loans are typically provided by private investors or companies. These loans are asset-based, with the property itself serving as collateral, making them an attractive option for investors who may not meet the stringent criteria set by conventional lenders.

    The Advantages of Hard Money Loans

    1. Efficient Approval Process: Compared to traditional loans, hard money loans offer a significantly faster approval process. Private lenders prioritize the property’s value and potential profitability over the borrower’s credit history. As a result, the loan application and approval process can be expedited, allowing investors to capitalize on time-sensitive investment opportunities swiftly.
    2. Flexible Terms: Private lenders have greater flexibility in structuring loan terms. This can be advantageous for real estate investors who require tailored repayment schedules or terms that align with their specific investment strategies.
    3. Accessibility: Hard money loans are accessible to investors with lower credit scores or those who may have difficulty qualifying for traditional financing options. Since the loan is primarily based on the property’s value, borrowers with less-than-ideal credit can still secure funding.
    4. Collateral-Based Security: With hard money loans, the property being purchased serves as collateral, minimizing the lender’s risk. In the event of default, the lender can recover their investment by selling the property. This collateral-focused approach allows borrowers with unconventional financial situations to secure funding.

    Tips for Successfully Securing Hard Money Loans for Rental Properties

    1. Research and Identify Reputable Lenders

    Conduct thorough research to identify reputable hard money lenders specializing in financing rental properties. Look for lenders with extensive experience in the real estate market and a proven track record of successfully funding similar projects. Reading reviews, seeking recommendations from fellow investors, and actively participating in industry events can help you find reliable lenders.

    2. Develop a Solid Business Plan

    To enhance your chances of securing a hard money loan, develop a comprehensive business plan that effectively showcases the investment potential of the rental property. Include key information such as the property’s location, market demand, projected rental income, and your detailed strategy for managing and maintaining the property.

    3. Gather Required Documentation

    Prepare all the necessary documentation to support your loan application. This typically includes detailed property information, financial statements, credit reports, proof of insurance, and any additional documents requested by the lender. By providing a complete and well-organized package, you demonstrate professionalism and dedication to the investment opportunity.

    4. Highlight Real Estate Experience

    If you possess prior experience in real estate investing, make sure to highlight it during the loan application process. Demonstrating a successful track record can instill confidence in lenders and significantly increase your chances of loan approval.

    5. Negotiate Favorable Loan Terms

    While hard money loans often come with higher interest rates and fees compared to traditional loans, there is room for negotiation. Carefully review the proposed loan terms and engage in open discussions with the lender to identify areas where more favorable conditions can be achieved. Building a strong rapport and working closely with the lender can lead to a mutually beneficial agreement.

    In Conclusion

    Hard money loans offer a valuable financing option for real estate investors venturing into the rental property market. With their quick approval process, flexible terms, accessibility, and collateral-based security, these loans provide the necessary financial support to kickstart your investment journey. By conducting thorough research, developing a solid business plan, gathering the required documentation, highlighting your real estate experience, and negotiating favorable loan terms, you can position yourself ahead of the competition and secure the hard money loan you need.

    11Apr, 2023
    Worries about a recession?

    Worries about a recession? At BLS we are committed to help you both personally and professionally weather the economic storms. Here are some thoughtful tips to hedge against the economic headwinds. There are several financial strategies that individuals and businesses can consider preceding an economic recession:

    worries about a recession. emergency fund

    Personally….

    1. Build up an emergency fund: Having an emergency fund can help you weather financial storms during tough times. Aim to have three to six months’ worth of living expenses saved up in a high-yield savings account.
    2. Pay off high-interest debt: If you have high-interest debt, such as credit card balances or personal loans, prioritize paying them off before the recession hits. This will reduce your financial obligations and free up more money to cover other expenses.

    3. Diversify your investments: Don’t put all of your money in one basket. Consider diversifying your investments by spreading your money across a range of assets, including stocks, bonds, real estate, and commodities.

    4. Re-evaluate your budget: Take a close look at your budget and identify areas where you can cut back on expenses. This will help you free up more money to save or invest.

    Business….

    1. Build up cash reserves: Just like individuals, businesses should have an emergency fund in place to help them survive during tough times. Aim to have enough cash reserves to cover at least three to six months’ worth of operating expenses.
    2. Diversify your customer base: Don’t rely too heavily on one or two major customers. Instead, diversify your customer base by targeting new markets and customers. This can help you weather downturns in specific industries or regions.
    3. Reduce debt: If your business has a lot of debt, consider refinancing or consolidating your loans to reduce your monthly payments. This can free up cash flow to help you weather a recession. Consider selling under performing or non-performing assets early while there is a market for the asset. As values decrease, you may find yourself in a pinch to wholesale to the lowest bidder.
    4. Control expenses: Take a close look at your expenses and identify areas where you can cut back. Consider renegotiating contracts with suppliers, reducing staff or hours, or implementing cost-saving measures such as energy-efficient lighting or telecommuting.
    5. Maintain a strong relationship with lenders: If you need to borrow money during a recession, it will be easier if you have a strong relationship with lenders already in place. Maintain open lines of communication with your lenders and keep them updated on your business’s financial health. The rule of thumb is, lenders only lend to those who do not need it. So, apply for a loan early in a recession. It is better to have it and not use it, then to be denied on your loan request when you need it the most.
    6. Focus on customer retention: During a recession, it can be harder to attract new customers, so it’s important to focus on retaining the ones you already have. Consider offering loyalty programs, discounts, or other incentives to keep your customers coming back.

    Above all maintain a long-term perspective: Remember that recessions are temporary and that the economy will eventually recover. Avoid making rash decisions based on short-term market fluctuations and instead focus on your long-term business goals.

    By implementing these financial strategies, businesses can position themselves to weather an economic recession and emerge stronger on the other side.

    It’s also worth noting that it’s never too late to start implementing these strategies, even if you suspect a recession is already underway. By taking steps to shore up your finances, you’ll be better equipped to weather whatever economic challenges come your way.

    Let us know which steps (if any) you are taking to not only survive, but thrive in 2023!!

    3Feb, 2023
    Worries of Stagflation??

    Worries of Stagflation? We already know there is inflation. But are we seeing signs of the dreaded stagflation in the economy? Who knows, only a picture in the rear view mirror can tell us. But regardless of the terms we use, businesses are experiencing some turbulent and uncertain times. We are handing you the keys that might help your navigate these challenging times.

    We anticipate that for an extended period, revenue may flatline while costs keep increasing. If you have exhausted the cushion you had set aside, it is time to take some other strategic measures to preserve the cashflow.

    worries of stagflation work smarter no harder

    KEY #1 – Keep the cost of debt to a minimum. And if interest rates are rising, consider replacing any variable interest rates loans with fixed rate interest payments. The fixed rates may feel high now, but if the Feds launch into drastic action, you will be prepared. Conversely, when the interest rates fall again, you can refinance at the lower rates.

    KEY #2 – Become a landlord. During stagflation, rents may increase and your business’s revenue might not. If you have extra cash available, consider buying the building in which your business operates, then rent the other half of the building to other tenants. Of course, purchase wisely. There are very friendly loans available to support purchasing commercial real estate for occupancy and rentals. So explore all of your options.

    KEY #3 – Be opportunistic about acquisitions. Companies that are going out of business or need to raise cash may sell property or equipment at below market prices. Consider acquiring commercial property, equipment, assets, brand lines or staff with needed skills to augment the business you are operating.

    Likewise, consider merging/acquiring a competitor, buying a channel, or manufacturing your product in-house if doing so allows both companies to reduce overhead, expand into new markets or offer an expanded array of products or services.

    KEY #4 – Augment staff with technology. Embrace automation in your business can supplement the staff and allow people to do more with less. If you have been resistant to incorporating technology into your daily business routine, you may be missing one of the biggest opportunities for growth in your company and for your staff. Technology can enhance your product output as well as offer a better customer experience. Should you higher staff person, or should you invest in technology that helps everyone grow. Business loans are available to expand your business technology needs and help your business be more cashflow positive.

    This is the time to think strategically and put the sound principles into action. This year will be another year of change to stay alive, or you can make it a year of change and leverage the opportunities coming available. Ultimately, its these times that help us grow and expand into places we did not even know existed. Protect the cashflow, manage the cash, and leverage debt where possible.

    We are here to find the strategies and the loans that help propel your business forward.

    3Jan, 2023
    Who should be on my team in 2023?
    who should be on my team

    Who should be on my team in 2023?

    There’s no time like the beginning of the year to complete a thorough assessment of your business activities.  Where have we been? Where are we now? and Where are we going? Most good business owners take the time to at least think about what the year will bring. And in the wake of uncertainty of the upcoming year given inflation, increasing interest rates, the war overseas, and political turmoil, one of those line item tasks should include asking:

    Who do I put on my team professionally?

    Take an assessment of the professionals around you. Your attorney, your cpa, your banker, your technology person. Yes, you’ve worked with them for years, but are they serving the purpose you need them to right now? Certainly, you do not want to be in a quandary and then have limited options to choose from. The best time to explore your options is when you are not under a stressful situation.

    Who should be on my team in 2023?

    The obvious as stated above, but is that all the key management players I need to achieve my big impossible goals this year? Who else should I consider to help my teams perform? More importantly, who are bringing good ideas to the table that lets me choose the next steps for our business? Or takes my business into a new direction?

    Think you have it under control? Think again! The world of finance is changing rapidly.  You do not have the time nor probably the desire to keep up with the latest and greatest growing financing trends, but there is nothing wrong with exploring some tried-and-true methods and incorporate some well-worn paths to grow your business.

    As I have said many times before, cashflow is king. Protecting your business cashflow is the secret to your business success. I can guarantee, that none of those professionals can advise you on protecting your cashflow. They can only speak to managing your money, not generating it. Which is actually different than managing your cashflow.  Not having cash-on-hand to make payroll or pay your bills is one of those things that will keep you up at night. Not being prepared for a surprise negative cashflow situation, will take you out of business in an instant.

    Of course, turning to the banks, when you need the money; they cannot lend it to you when you are in an adverse financial position. We are already witnessing the banks tightening lending criteria and standards. And if you remember in 2008 crisis, the banks were not your friend. They were often the source of the problem. I am not saying this is 2008 all over again. The current situation is very different and there are some strong fundamentals at play. However, there are some similarities that are worth paying attention to. How does the saying go? The banks only lend money when you don’t need it. There is some truth to that.

    And if you find yourself in a quandary, predatory lenders are waiting behind the scenes to scoop up on the opportunity. This is a position you want to avoid. So, if you are planning for a business-as-usual kind of year during your assessment, you may miss the mark. Lets be honest, this is a “Take Action” kind of year, not a wait and see how it goes kind of year. The smart people will make decisive plans and act early in the cycle. They will expand their tolerance limits and plan for the low cashflow possibilities. And they will surround themselves with talented people who can bring creative ideas to the table when navigating a difficult year. You will be brilliant!

    At Business Loan Solutions, we are dedicated to your business success. We understand the importance of cashflow in your business and we strive to find the right solutions to keep operations running smoothly, even in this uncertain time. If the saying goes, the banks only lend money when you don’t need it is true, then the opposite is true too.  While your business is going well, look for solutions that work for you. Consider a working capital loan or a line of credit as a back up plan. Consider consolidating your loans, especially if you have a long-term loan coming due this year. Take advantage of equipment leasing or invoice factoring to diversify your cashflow possibilities. Or even investigate an SBA loan to expand your business. We have many levers to pull in your favor and we can help you plan this year’s cashflow strategy.  

    So as we head into an uncertain economic year, who do you want on your team?

    22Jul, 2019
    Asset Protection Trusts

    In the realm of wealth building and protection, one strategy that individuals often employ to protect their assets is the establishment of an asset protection trust. This powerful legal tool aims to shield funds from the impact of taxation, divorce, and bankruptcy, offering a layer of security and peace of mind. In this article, we will delve into the world of asset protection trusts, exploring their purpose, structure, and benefits.

    An asset-protection trust functions by separating the beneficial ownership and legal ownership of trust assets. While the beneficiaries of the trust hold equitable interests in the assets, they do not possess legal title to them. This arrangement fulfills the objective of asset protection planning, which is to shield assets from creditor claims without resorting to concealment or tax evasion. It is important to note that a creditor’s ability to satisfy a judgment against a beneficiary’s interest in a trust is restricted to the beneficiary’s stake in that particular trust. Consequently, asset protection trusts strive to limit the interests of beneficiaries in a manner that prevents creditors from seizing trust assets.

    An asset protection trust is a type of trust that aims to safeguard funds by holding them on a discretionary basis. The primary purpose of such trusts is to minimize or reduce the impact of taxation, divorce, and bankruptcy on the beneficiary. However, governments and courts often impose restrictions or limitations on these trusts to regulate their effects.

    What is an Asset Protection Trust? An asset protection trust is a form of trust that enables individuals to hold funds on a discretionary basis, with the primary goal of mitigating potential risks to their wealth. Unlike other trusts, an asset protection trust splits the beneficial enjoyment of trust assets from their legal ownership. The beneficiaries of the trust hold equitable interests in the assets but do not possess legal title to them. This separation ensures that the assets are safeguarded from potential creditor claims, providing asset protection without resorting to concealment or tax evasion.

    Benefits of Asset Protection Trusts: Asset protection trusts offer several key advantages for individuals seeking to preserve their wealth. Firstly, they provide a robust defense against potential claims arising from creditors, divorce settlements, or bankruptcy. By limiting a creditor’s ability to satisfy a judgment against a beneficiary’s interest in the trust, the trust assets remain out of reach. Additionally, asset protection trusts can enhance privacy and confidentiality, as they are not subject to public scrutiny like other forms of asset ownership. Furthermore, these trusts can offer significant tax advantages, helping to minimize tax liabilities and optimize the distribution of assets to future generations.

    Key Features of Asset Protection Trusts: To ensure the effectiveness of an asset protection trust, certain key features must be considered. Firstly, the trust must be irrevocable, meaning it cannot be altered or revoked once established. This characteristic is crucial as a revocable trust does not provide the desired level of asset protection since the settlor retains the power to revoke it. Most asset protection trusts also incorporate a spendthrift clause, which restricts a trust beneficiary from transferring their expected interest to a creditor. However, it is important to note that there are exceptions to this clause, such as self-settled trusts, debtor-as-sole-beneficiary trusts, and support payments for former spouses or minor children.

    Legal Considerations and Jurisdictions: Asset protection trusts are subject to various legal considerations and regulations, which may vary depending on the jurisdiction. While some jurisdictions have restrictions or limitations on asset protection trusts, others offer more favorable legal environments. For example, jurisdictions like Alaska, Bermuda, and the Cayman Islands permit self-settled trusts, providing additional protection through the spendthrift clause. It is crucial to consult with legal professionals experienced in asset protection planning to navigate the legal intricacies and determine the most suitable jurisdiction for establishing an asset protection trust.

    To achieve asset protection, these trusts must be irrevocable since a revocable trust does not provide the desired level of asset protection, as it can be revoked by the settlor. Most asset protection trusts include a spendthrift clause, which prevents a trust beneficiary from transferring their expected interest to a creditor. However, there are three general exceptions to the protection offered by the spendthrift clause. The first exception applies to self-settled trusts, where the settlor of the trust is also a beneficiary. The second exception occurs when a debtor is the sole beneficiary and sole trustee of a trust. The third exception is for support payments, where a court may order the trustee to fulfill a beneficiary’s support obligation to a former spouse or minor child. It is worth noting that the first exception, which accounts for the majority of asset protection trusts, no longer applies in several jurisdictions. However, certain jurisdictions like Alaska, Bermuda, and the Cayman Islands permit self-settled trusts to provide settlors with the protection of the spendthrift clause.

    By implementing an asset protection trust, individuals can shield their assets from potential creditor claims, provided the trust is irrevocable and adheres to the relevant legal requirements. This strategy is a popular choice for those seeking to safeguard their wealth and minimize exposure to financial risks. To learn more, give us call!

    22May, 2019
    What does it mean to be a GAME CHANGER?

    What actually does it mean when something or someone is a game changer? It can be an event, idea, or procedure that effects a significant shift in the current manner of doing or thinking about something.

    You are a Game Changer in that you provide a relationship that comes along and turns everything upside down in a positive way. It’s your relationship with those you have communications with that changes the familiar landscape of life, rearranging all aspects in a new and unexpected way.

    See yourself having an effect that is strong enough to change someone’s life if they are open to a change. Of course, their openness will have a huge decision on the change which can have a powerful effect on their life in the future.

    Our Wealth Management Structures is a GAME CHANGER. Leading the way in wealth creations, management, and protection.