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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS BUSINESS VALUATIONS
MARCH 2023
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Things That Can and Will Go Wrong Before Closing
We had about two weeks before the sale of Ben’s stores was to close. He had been one of my biggest worrywarts because he could never get his head around the fact the deal was really going to happen. He would call me at least three times a week, asking me the same question: “Do you really think the buyer is going to be able to get the money, and the sale of the stores is really going to happen?” I totally understand what it feels like to work for many years building a business from nothing to something successful that has fed your family, paid for everything you have, and now is going to be sold, giving you the money you need to retire. The pressure and anxiety a business owner experiences when selling their business are tremendous, and if you have not been through it, trying to explain it is very difficult. Therefore, I do not take the situation lightly. But my job when selling one’s business is to stay focused, make sure the buyer has the ability to get the transaction closed, and keep the buyer on track doing the things that need to be done to get the transaction closed. To begin the process of selling one’s business, the first thing that needs to happen is the business owner must make the hardest decision of all, and that is to decide to sell their business. Next is to find someone, or a company like American Business Brokers & Advisors, to assist them in determining what the business is worth in the present-day marketplace. Then help them to prepare the business for sale, which means collecting a bunch of information about the business so the buyer will know what they are buying; bring all of the financial information up to date; begin the search for the right buyer (there is a difference between a buyer and
the right buyer); begin the process of vetting the buyers; and analyze offers of purchase. Then, if all goes well, you accept an offer to purchase, negotiate the purchase agreement, enter into the due diligence process (which can be grueling), decide on a date when the transaction will close, and finally close the transaction. Besides having to do all the items I just mentioned, you have to maintain complete confidentiality without your employees knowing you are selling the business so as not to disrupt the operation of the business! To say a seller may be wound a little tight after going through the process I just mentioned is understandable. It’s why Ben was calling me three times a week, wanting confirmation the transaction is really going to happen. Having guided hundreds of sellers through this process before, it never gets any easier because it is their first time, and it is a very draining experience both mentally and physically, which is why I have to stay focused and keep things moving. Now back to Ben, whose stores are scheduled to close in two weeks. He has been through everything I have described and is feeling pretty good now and calls me and says, “We got everything done for the buyer, so we are done now, aren’t we?” Being the pragmatic individual I am, having spent the last six months practically living with Ben, I respond by saying, “No, I am sure something else will come up within the next two weeks that will try to jeopardize the closing, but we will figure it out and get the transaction closed.” At that point, Ben is about to freak out and says, “What could go wrong in the next two weeks?”
I WOULD LIKE TO SAY THANK YOU TO ALL OF OUR CLIENTS & FRIENDS FOR THEIR SUPPORT AND REFERRALS. WE COULDN’T DO WHAT WE
DO WITHOUT YOU. –Terry Monroe
Here is a short list of items that can and have happened to me before I got the transaction closed.
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The seller’s wife had an affair and ran off with a bread vendor just before closing. In this situation, we had to negotiate a buyout of the wife in order to get the transaction closed. The seller’s general manager, who was coordinating the inventory and closing procedure, had an anxiety attack and ended up in the hospital. The seller was experiencing heart pains due to the pressure of going through the sale process, and the closing was delayed. The seller died two days before the closing, and his spouse had to step in and finish the closing. The seller’s attorney and buyer’s attorney couldn’t get along, got into a fight, and quit Continued on Page 2 ...
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IT’S TIME TO PLAN FOR THEM LIKE ONE! When you create an estate plan and begin to review it, are you sure you’ve planned for everything? While it’s vital that you assign a beneficiary and powers of attorney, outline how you want your assets and property to be divided, plan for young children, and state any other wishes, be sure you’re also thinking about your pets. Your Pets Are Like Family
DECIDE WHO WILL CARE FOR YOUR PET. The first thing you want to do is appoint a pet caregiver. It’s important to note that you want to pick someone (or an organization) to care for your pet according to your wishes. While you may have family or friends with pets of their own, look at how they care for them. Even if they are great pet owners, they may care for their animals differently than you want your pet treated. ORGANIZE YOUR FINANCES. You want to leave enough money to last for the rest of your pet’s life. This includes food, vet appointments, emergencies, supplies, and other expenses. To calculate these funds, consider how much you spend to care for your animals now. Then multiply that by how long your pet is likely to live. Be sure to add additional money as a cushion for any sudden expenses. APPOINT A TRUSTEE. Once you’ve created your estate plan for your animals, pick a trustee to manage the money for your pet. This person will ensure your wishes are followed, and the pet caregiver is caring for your pet accordingly. It’s recommended not to have the same person as your trustee and caregiver — it could create a conflict of interest. Your animals are like family to you; now is the time to plan for them like one! If you have questions about estate planning for your furry friends or want to start planning for your pets today, call your estate planning attorney to get started.
When most people think about planning for their four-legged friends, they mainly think about who will care for them after they pass away — but there’s much more to consider. What will happen to your furry friends if you become sick or injured or move into an assisted living facility and cannot care for them? While some pet owners may create a pet trust, that only goes into effect when you pass away. Therefore, it’s essential that you estate plan for your four-legged family members. Here are three things you should do.
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communicating, and I had to become the mediator between the two to start talking again to finish the transaction. The seller’s siblings were not involved in the business due to domestic issues but had the authority to sign closing documents and refused to sign, delaying the closing. The seller and family members refused to communicate, and I had to negotiate between parties to get the keys and other documents needed to close on time.
different closing statements before the seller got their money, but the buyer is now operating the business and the seller hasn’t been paid. One of the seller’s stores was leased, and the landlord refused to sign documents. The transaction closed, but the seller was short $1 million at closing while negotiating with the landlord. The title company discovered an easement that runs through the middle of one of the stores, and we had to call a special city council meeting to get the easement vacated before we could close in one week.
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An asteroid hit one of the properties being sold and delayed the closing. (I threw this one in even though it hasn’t happened yet, but I am waiting for it to happen.)
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My point in sharing this information is that selling is hard, but can be much harder without knowing the process and being prepared for what may happen. Attorneys are needed to prepare and complete the paperwork, but they are not trained or experienced in what I just described — just as I am not trained as an attorney to prepare the correct paperwork to complete the transaction.
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The title company could not get the closing statement correct, and it took 13
So, as the Boy Scouts motto says, be prepared. The best way I know is to make sure you
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SUDOKU (SOLUTION ON PG. 4) Take a Break!
"HIDDEN WEALTH" The Secret to Getting Top Dollar for Your Business
have the right attorney, accountant, and intermediary in your corner when you decide to sell your business. At American Business Brokers & Advisors we pride ourselves on having closed hundreds of transactions and working intimately with our clients so the things I have mentioned don’t happen. To be sure you are prepared, go to Amazon.com and order my book “Hidden Wealth: The Secret to Getting Top Dollar for Your Business,” a FORBESBooks publication, or email me at Terry@TerryMonroe.com and put FREE COPY in the subject line, and I will send a copy free. The book describes in detail what to do when it comes to selling one’s business, and hopefully, you won’t end up in my list of what can happen before closing. –Terry Monroe TERRY’S QUOTE FOR THE DAY “You can have anything in life you want, if you just help enough other people get what they want.” – Zig Ziglar ► What is the value of what you are selling? ► Want to make sure the sale is confidential? ► Want to sell everything together & fast? Terry has sold over 857 businesses. His book tells you what to do and more importantly what NOT to do when selling one's business. GET YOUR FREE COPY TODAY! Email Terry@TerryMonroe.com Put FREE COPY in the subject line for your free copy of "Hidden Wealth", a ForbesBooks publication.
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Estate Planning for Your Furry Friends
Thinking About Selling Your Business in 2023?
One of the Hottest Marketing Trends of 2023
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What That Means for Your Marketing ARTIFICIAL INTELLIGENCE IS EVERYWHERE!
Today, artificial intelligence (AI) is one of the hottest marketing trends of 2023. AI is helping business owners boost their customer experience, better understand their target audience, and measure and judge for optimized growth. But what exactly is AI marketing, and how can it benefit you and your business? WHAT IS AI MARKETING? Companies will use AI technology to make automated decisions quickly. It collects and analyzes data, observes economic trends, and develops strategies faster than any human can. AI marketing software can take on a wide range of responsibilities, such as data analysis, consumer trends, and content creation and personalization. But how does AI compute and calculate this information? Whose data and trends is it looking at? Because AI marketing is used
to help businesses improve their customer experience and understand their audience better, the best data for AI to use would be yours — the business’s customers. AI will analyze customer data and notice specific trends that will help it predict your actions on apps, websites, and other media. With this insight, companies can use these trends to create personalized content just for you in a matter of seconds. WHAT ARE THE BENEFITS OF USING AI? One of the biggest benefits of AI marketing is that it gives you a better understanding of your consumers. This means that your automation will be faster and more intelligent and can positively impact your company’s revenue and ROI. AI can also generate personalized content both on social media and in emails that will attract your customers. In addition, because you’re using technology to create content, AI won’t make any costly mistakes.
AI marketing doesn’t seem to be going anywhere. In fact, it’s expanding its channels by improving customers’ experience using chatbots. The marketing tool will improve business’s messaging services to provide customers with a better chatting experience. Chatbots could even integrate into sales, lead generation campaigns, and other customer service channels.
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