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The 9 ways to leave your business

Article by Eric Purvis, Director of TAA Planning.



You might remember Paul Simon saying there were 50 ways to leave a lover. But if you’re a business owner thinking about how to leave your business you really only have nine options to consider:

Sell or give your company to a family member
Sell your business to one or more key employees
Sell to your employees
Sell your business to other shareholders
Sell to an outside third party
Bring in an outside investor and keep a minority interest
Go public
Hire a management team to take over and become a passive owner
Liquidate your business

Determining exactly which option is right for you is a challenge many business owners put off until it is too late. Opportunities disappear as time passes. If you wish to leave your business on your terms and in your own timeframe, you need to be proactive about understanding your exit options.

I recommend a four-step process to determine which exit option is best for you. This process will ensure that your exit options are consistent with your personal goals and take into account the realities of your company and the marketplace.
Choosing a Path
1. Set Personal Goals.
You need to identify your most important objectives; both in terms of financial goals and non-financial goals. Ask yourself, amongst other things:

How much money do I need from the exit to ensure my family’s financial security?
Do I want the company to stay in my family?
Do I want to my key employees to be rewarded during the exit?
Establishing well defined and written objectives is […]

October 15th, 2015|Business Learning|

Where’s the value in your business?

Article by Eric Purvis, Director of TAA Planning.



Where’s the value in your business?

In order to gain some freedom from the demands of your business, or if you’re planning to exit, it’s critical to accelerate the value of the business. So let’s get some things straight about business value.

Let’s start with two facts about value:

Most businesses are not saleable and don’t make it through the second generation.
Income doesn’t automatically translate to value.

These two facts tell you something important – value isn’t something your business just has. The value in your business, while you are giving 100% to your business, tends to reside in you. Therefore, value is something you need to separate out from you, create and enhance in your business so it can operate with less involvement from you.

There are a set of major steps that can be applied too almost any business to determine value and plan its acceleration. These steps are:

Create a recast income statement and balance sheet;
Do a complete financial analysis;
Pull benchmarking data about industry performance and recent trade multiples;
Complete an Enterprise Value Assessment (EVA) which scores the business attractiveness and the owner’s personal, financial and business readiness; and
Correlate these scores with the business valuation and financial analysis.

Obviously these are complex processes that will probably require assistance from a professional. But the outcome is vital information. The process I’ve just described delivers this information:

A specific and qualified list of personal, financial and business strengths and weaknesses, correlated and used to justify present value and potential value;
A dollar […]

October 6th, 2015|Business Learning|

What’s your business worth?

Article by Eric Purvis, Director of TAA Planning.



Methods of valuation compared
Empirical research conducted by the Pepperdine Private Capital Markets Project indicates that approximately 40% of all companies that are brought to market do not result in a transaction, with the largest reason for failure being a value gap in the expectations between buyer and seller. (Kenneth J. Sanginario, The Value Examiner, Nov/Dec 2013)

You’ll be reading this article because you are interested in understanding the value of your business. You may want to exit, free up some time, sell, or enter into some kind of agreement with another business – or you might be looking at bank finance. Whatever the case, you want to know your business’ true value, right?

Obviously the first step in understanding how to liquidate, leverage, or build value is establishing a baseline. This means you’re going to need a detailed business valuation. Owners often think they know their company’s value, but in reality they’re shockingly off the mark.

A business appraisal firm surveyed 2,000 business owners and found that most misjudged the value of their businesses by 50% or more — and sometimes by millions of dollars. Worryingly, over half of business owners overestimated the value of their companies. The major problem this can cause is that people embarking on any kind of venture, growth strategy, or exit, are banking on a certain amount of financial capacity. But in fact, they are sometimes significantly overestimating this capacity.

The methods most commonly used to establish a business’ value are:
Current marketplace […]

September 21st, 2015|Business Learning|

Your crack team – 5 experts you need

Article by Eric Purvis, Director of TAA Planning.



Your crack team
… 5 experts you need for your business strategy
Whether you’re growing your business’ value and profitability because you want to sell it, make acquisitions, or expand your empire, the stakes are high when you begin to ponder how and when you’re going to kick off your strategy. You’ve essentially got two goals in mind:

Maximising your company’s value, and
Ensuring you accomplish your business and personal objectives.

To make sure that you build, grow or exit your business on your terms, and capture all of the value you’ve created in your business, you need to be proactive – not reactive. Think ahead and gather your team. I’m talking two to three years ahead, if possible, especially if you’re planning to exit.

Choose a team of advisors who can and will help you make this change in your life as smooth and as rewarding as possible. You should also understand that growing your business is a multi-disciplinary endeavour. Only a team of professional advisors will have ALL of the expertise needed to design a comprehensive, integrated Growth Plan with all its associated goals and strategies.
Your crack team

As a headstart, I’m going to tell you exactly who you need on your team and the one-word reason why you need that individual.

A business coach – Accountability
A solicitor or legal advisor – Compliance
A financial advisor or wealth management professional – Maximise
A tax specialist – Minimise
An insurance professional – Protect

What about the cost?
Nobody likes to pay unnecessary fees, but the cost […]

September 10th, 2015|Business Learning|

The broken business model

Article by Eric Purvis, Director of TAA Planning.



The broken business model
… and why business owners are trapped in it
I’ve met many a business owner with this one big problem, no matter what industry they’re in. The problem is low revenue, low profit and too much time spent working in your business. At least, that’s what a business owner will say the problem is.

But the real problem is that the business model is broken.

What they want is increased revenue, increased profit and reduced time commitment. But what they actually need is a business model that works. Usually, the thing that is holding them back is a lack of knowledge.

They already have a strategy – but it’s a strategy that’s not serving the owner or the business well and its cost is time, frustration, stress and worry. The broken business model is characterized by:

No streamlined business systems
Less than optimal performance in one or multiple areas of operation
Stagnant profitability
No enjoyment from business ownership
Excessive, health-damaging hours directed at the business and yet it remains in stasis
Not enough time to work ON the business

What’s the solution? First, get informed. Get knowledgeable.

Seek information from the best independent and objective sources possible. You’ll need a team of trusted advisors like your solicitor, accountant, financial advisor, an insurance professional and maybe a business coach.

The next step is to take your business through three steps:

Focus on improving profitability
Work to build a strong management team
Systematize the business’ operations

As you work on these three areas methodically, and with the support of […]

August 24th, 2015|Business Learning|

The impending Baby Boomer business crisis

Article by Eric Purvis, Director of TAA Planning.





Two questions:

Do you own a business?
Are you planning to retire in the next five to seven years?

If you answered no, thanks for stopping by and have a great day. If you answered yes, then there’s a problem you need to know about.

Over the next couple of decades, the Australian economy is set to experience an unprecedented number of businesses for sale. This is because baby boomer entrepreneurs are beginning to retire. The result will be a glut of businesses available for purchase, and the secondary result will be downward price pressure, making most privately owned companies lose value when sold.

The baby boomer generation has been one of the most entrepreneurial generations in history. There are now over a million business founders and independent contractors over 55 years of age. Here are some quick facts on the baby boomer age group in business.

The oldest of the baby boomers was born in 1945 and is now 70 years old.  The youngest of the baby boomers was born in 1961 and is now 54.
The trend of baby boomers selling their businesses will continue for the next 10-15 years.
Research shows us how baby boomer business owners plan to exit:
Approximately 30% of plan to sell their business to a third-party buyer.
Another 30% plans to sell to a family member
Another 18% plan to sell in some manner to current employees.
The remainder plan to close and liquidate the business.

Selling your business during the first half of the “baby boomer bubble” which […]

August 14th, 2015|Business Learning|

Video post

There are many benefits to hiring a business coach, advisor or consultant. Check out this short video to find out more.

June 21st, 2015|Video|

Transition Advisory Alliance new website launched by JR Web

The TAA Planning website has been designed and developed by Josh Reinhardt Web Development. We hope you like the new site. We welcome any suggestions here. You can visit Josh Reinhardt Web Development here.

Josh Reinhardt Web Development offers services such as:

Web Development
Web Design
Website Hosting (Australian)
Domain Registration
Website administration & management
Graphic Design
Logo creation
Online marketing
Online content creation
SEO Search Engine Optimisation
Illustration, character design, storyboarding
Other Online Projects

June 19th, 2015|News, Press Release|