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Every day, we deal with a few acronyms to make communicating professional achievements easier: CPA, JD, MBA, MD, etc. Today I’m adding one more to that always-growing list: my recently acquired CEPA certification and what it means for me as well as you.
So, What Exactly Is CEPA and What Does It Qualify Me to Do? So, you think you’re ready to sell your business but there are a few stops between deciding to sell and cashing that check. Where do you even start?
First, contact a CEPA (certified exit planning advisor and you just happen to know the best in me!) for any and all assessments - a strategic business analysis, a business valuation, and personal, financial, and business assessments. Ah, 2022 - the start of a new year and all the hope that a new beginning brings. Even if January 1 didn’t bring you that shiny new slate you were hoping for, it’s never too late to start fresh and start planning for the year.
While we all hoped COVID would be long behind us by now, unfortunately we still have to deal with its business world impacts like closures, delays, and supply chain crises. But what does the virus mean for your business, specifically the sale of it? Over the last two years, we’ve all been a bit all over the place. From experiencing the initial uncertainty of COVID to now being in a bit more stable place, it’s been a very long and very strange trip.
Our current environment still has an underlying note of uncertainty and fear but we now have hope. Hope for the future and hope for what it brings. The economy is up and unemployment is at a low: so what does this mean for selling your small business? There’s so much information out there. So much information you may need and so much information you can really just ignore, especially when it comes to making BIG life decisions. One of those decisions (which probably landed you here) involves selling your business, specifically who you need to help you sell your business and what those people actually do.
So let’s jump right in. You’re not alone in selling your business and I’m going to break down each key player you need in your arsenal to help you cross the finish line. (Ideally, a business owner will have an established relationship with each of these advisors and the transaction goals will dovetail with other previously established strategies like tax sheltering strategies, wealth building strategies, liability mitigation strategies.) Business Broker. In an exit planning situation, a business leader should first find a business broker that is the right fit for them. Specifically, I believe it's important that the owner and broker have good rapport and high levels of trust with one another. The business owner should hire a broker that has high levels of integrity, competence, and grit. Be wary of professionals who only tell you what you want to hear... It is not uncommon for a broker to list a business for sale at a price that is unrealistic because the owner "wants" that price for it. Just because an owner "wants" that price doesn't make it so and in fact can hurt the listing if the listing price is inflated. In the transaction, the broker will be the lead advisor that manages the overall project and coordinates the other advisors. When the business owner is within 3-5 years of their desired exit (and in some cases even sooner) the business owner should form a relationship with the broker that will lead this team across the finish line. CPA. Please tell me you’ve worked with a CPA regarding your small business before. And if you haven’t, now is the perfect time to start. In order to sell your company for the highest valuation, you’ll need 3-5 years of professionally kept books to pass off to any potential buyer. You need a CPA. In terms of actually selling your company, a good CPA will have already worked with you regarding any tax strategies for your business. Your CPA will also take into account the long-term impacts of selling your company and will have a plan in place to address them. Wealth Advisor. Most business owners will have an existing relationship with a financial planner/ wealth advisor to know what savings goals are needed for retirement. Likely, you already have some sort of framework of a plan in place for your financial future. Working with a wealth advisor when selling your company is crucial to achieving your long-term financial goals. Attorney. In business transactions, "time is of the essence" or more plainly stated, time kills deals. It is critical that the deal team move as fast as possible to closing but only the owner and the broker are financially motivated to do so. Usually, the other professional advisors on the team are compensated on retainer or hourly. The business owner likely has an established relationship with an attorney to ensure the business entity is set up correctly according to local and federal laws and the owner's liability is mitigated. Due to the nature of the work, attorneys can be the most difficult to get across the finish line because they are hired to protect one from any and all possible risk. Risk is inherent in EVERY business transaction so if left unsupervised, attorneys will turn a deal inside out and upside down from now until the 2nd coming of Christ..... This is ill-advised. Go, Team! These advisors are your A-team when selling your business and are there to support you and help you achieve your long-term goals. Ideally, the wealth advisor, CPA, and attorney have taken into account the future impact of the business sale and have a long term plan in place for your financial health. As the saying goes, timing is everything and this is particularly true with your exit team. Each professional on your team has a different relationship with your final outcome of the deal and acts at different times in different stages of the deal. Make sure everyone is on the same page in terms of what YOU want, what YOU need, and when THEY need to step in and be involved. (Don’t worry, your friendly exit coach can also help coach you through this.) Still need a little guidance or just need to talk to someone about getting started? I’m here for you. Click here to book a complimentary call with me today so we can chat about your business needs for the New Year! |
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Katie Milton Jordan :: Texas Business Broker
222 Sidney Baker Street South Suite 213 Kerrville, Texas 78028 Open M-F 9am - 5pm & by appointment 830-370-3714
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Made with ❤️ in Kerrville :: Soon to be the Small Business Capital of Texas.