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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS SUCCESSION & BUSINESS ADVISORY BUSINESS VALUATIONS
6 Signs That It May Be Time to Sell the Family Business WWW.TERRYMONROE.COM MARCH 2022
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Perhaps you have started to suspect you may need to sell your business rather than hand it down to your children. Here are a few indicators as to why you may want to do that. 1. YOUR CHILDREN ARE NOT INTERESTED IN THE BUSINESS. If you run a profitable small business that put your kids through college, chances are they have their sights set on bigger goals when they graduate. Even though the company is big enough to warrant their joining the business, they are not interested. There is nothing wrong with laying out the facts regarding the opportunity the family business presents to them. But forcing the company on your children will only result in resentment or poor performance, or both. 2. YOUR CHILDREN ARE NOT CAPABLE. The reality of the matter is that not everyone is capable of running a business, and just because they are your children doesn’t automatically make them capable of operating and managing a business. Sometimes it takes a lot of courage and mental fortitude to realize this, but it is reality. I have met many clients whose children, despite their parents’ hopes and dreams, were not cut out to run the family business. 3. OWNERSHIP HAS BECOME TOO DILUTED. Unless the company is always growing, it is hard to support a growing number of owners. This is true whether they work in the business or not, because the company can’t keep paying salaries or dividends or bonuses to those not in the business or individuals who are not working full time in the business. Basically, we have too many people feeding from the same trough, and unless you are growing at an exceptional rate, the out-go of money will outstrip the income of the company, which will eventually bankrupt the company and cause great dissension among the family.
you should always know the market value of your business in your industry. Why not sell your business at the top of the market? Don’t try to convince yourself you are keeping the company for your kids unless they understand the money involved and loudly declare their desire to run the business — and have a credible plan that makes financial sense. Otherwise, take the money being offered. 5. MEMBERS OF THE NEXT GENERATION DON’T LIKE WORKING TOGETHER. Here again we need to apply the Theory of Reality, which is that maybe all your kids are capable, but they can’t seem to get along with each other or with their spouses. If they are not getting along now, it will only be worse once they are in business together. Turning the business over to them will impact your retirement plans, affect their lives, and possibly destroy the relationships they have between each other, which will definitely spill over onto the parents. And if this happens, you can forget the big family gatherings at Thanksgiving and Christmas. 6. THERE ARE MAJOR CHANGES IN YOUR INDUSTRY. Markets and technology changes can alter the business landscape in such a way that it requires massive reinvestment to reposition the company. Customers tend to migrate to new places and things. And to keep up with the trends and desires of your customers, you may need to invest large amounts of time and money, which you are not certain will pay off in the future. The business is at a crossroads, and one must decide whether to take on additional debt and grow the company and attempt to take the company to the next level or sell the business. This means taking your hard-earned equity out of the business at the present time rather than taking the risk of losing it all. The Bottom Line: We call it a family business when ultimately it is our livelihood. Look beyond the emotional part and focus on the reality of what is good for you and the family now instead of in the past. To learn more about family businesses, send me an email at Terry@TerryMonroe.com. I will send you a FREE copy of my book, “Hidden Wealth: The Secret to Getting Top Dollar for Your Business,” which is affiliated with ForbesBooks. Include your mailing address, and I will have one sent to you. –Terry Monroe
4. YOU RECEIVE AN OFFER YOU CAN’T REFUSE. This doesn’t happen very often, but when it does, you should know it is a great offer and you should take it. Markets go up and markets go down. Regardless of what kind of business you are in,
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PROTECT YOUR IDENTITY AND KICK SCAMMERS TO THE CURB 5 Ways to Deal With Annoying Robocalls
According to the latest data, scammers and telemarketers make 1,528 robocalls to Americans every single second. No wonder they’re driving us all crazy! Some of these calls are legitimate reminders about doctor’s appointments and payment plans, but around 55% of them are just nuisances — and we can’t rely on the government to stop them. If you’re sick of hearing about “your car’s extended warranty” or the “student loans” you paid off 40 years ago, try these five tips to cut down on robocalls and outwit scammers. 1. EXPLORE YOUR CARRIER’S FREE TOOLS. AT&T, T-Mobile, and Verizon all offer services to cut down on scam calls. Some of them are free and/or come with your phone, but others you have to pay for or activate. If you have Verizon, for example, you can download the “Verizon Call Filter” app from the Apple App Store or Google Play. Visit your carrier’s website or call them to learn about the tools they offer. 2. DOWNLOAD AN AD BLOCKER. For extra protection, you can download a separate ad blocker from the Apple App Store or Google Play. Hiya is a free app that will give you caller ID and block spam calls, and Nomorobo is an award-winning option that’s free for landlines and costs $1.99 per month for cellphones. In my most recent book, “Hidden Wealth: The Secret to Getting Top Dollar for Your Business,” I have a chapter on the Dismal D’s. During our lives, we all have significant, impactful events, which I call the Dismal D’s. For those who do not know what the Dismal D’s are, they THE DISMAL D’S CAN HAPPEN TO ALL OF US
3. WHEN IN DOUBT, LET IT RING OUT. If you don’t recognize the number calling, don’t
answer. You can always call back if they leave a legitimate voicemail.
4. SUSPECT SPAM? HANG UP. So, you accidentally answered a spam call. Whether it’s a person or a robot on the line, hang up immediately! Even saying your name or the word “yes” could set you up for identity theft. 5. HANDLE VOICEMAILS WITH CARE. If you get a suspicious voicemail, never call the number or visit the website given by the caller. Instead, Google the company or agency they claimed to be with and call that number. If the real agency has no idea about the call, you’ve just escaped a trap. By taking all five of these steps, you can protect yourself and your wallet from Ponzi schemes, identity thieves, and annoying telemarketers. For even more specific advice, visit AARP.com and search “The Definitive Guide to Reducing Robocalls.” DISMAL D NO. 2: DISSENTION AMONG PARTNERS (WHO HAPPEN TO BE SIBLINGS) This one is more common than you might think. The founders have passed away, and the siblings took over the business, but not all of the siblings work in the business. Yet they want the income from the business and tell the family members who are working in the business how they think the business should be run. It is always a recipe for disaster. If the parents were still alive, they would probably fire all of the kids and sell the business and split up the money. My job is to value the business and try to appease all the siblings and get the business sold before they all end up mad at each other.
are as follows: Death, Disease, Divorce, Disaster, Distraction, Debt, Delusion, Disinterest, Declining Sales, Dissention among partners, and Dumb. Significant life-impacting events are part of life’s journey, and none of us has any control over them. We never know when they are going to happen, but they will happen sooner or later.
DISMAL D NO. 3: DISINTEREST Contrary to what people may think, disinterest (also known as “burnout”) is the most common reason a business owner will sell their business. It is not about the money, because most of the time they are making very good money. But having worked on their business for many years and experienced the same situations owner/operators face on a daily basis (such as theft, employee issues, legal issues and
Here are four Dismal D’s I am working with now.
most recently the COVID-19 issue), I get the call that they are burned out on the business, the employees, and everything associated with the business. Generally, they will sell the business, then take a year off and go into a totally different business and start over fresh. DISMAL D NO. 4: DEBT The business owner has a few really good stores, some okay stores, and then some stores that just don’t make any money; there is a lot of
DISMAL D NO. 1: DEATH A very good family business is running well, turning a nice profit, and then the patriarch happens to pass away. This is never a good thing, even if the family knows it is coming. It is always disrupting to the business and family, and sometimes, neither recovers from the loss of a loved one, especially one who was in charge of the business. My job is to assess the situation and advise the family on whether they should sell the business, and if so, I guide them through the process of selling the business.
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Take a Break! Are you planning on selling your business in the next 1–2 years? If so, you need to start planning
Get the Wisdom of Other Business Owners’ Mistakes FROM TERRY MONROE’S ‘HIDDEN WEALTH’
now. But where do you even start? Selling a business is a massive undertaking. With so many things to consider, some confusion is understandable, but if you don’t get the right kind of help, you could end up selling your business for far less than top dollar and leave tens of thousands of dollars on the negotiating table. These are the kinds of cautionary tales that market maker and four-time author Terry Monroe shares in “Hidden Wealth: The Secret to Getting Top Dollar for Your Business.” While we’d like to hope we’re accomplished and savvy enough to sell
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our business without any help, the uncomfortable truth is that tons of successful business owners have lost out on millions of dollars in selling their businesses — all because they didn’t know exactly what they were doing. Sometimes, contemplating the financial implications of selling your business and dealing with the strain and grief that comes with doing so are worse than actually selling the business. So, what then? Well, in Terry Monroe’s “Hidden Wealth,” you’ll also learn how to realistically assess your situation, deal wisely with the business that you’ve built over the years, and maximize the money you’ll receive when you decide to sell. It has been said that we learn from our failures, not our successes, but the true sign of a successful individual is to learn from someone else’s failures and not your own. “Hidden Wealth” seeks to do just that: give every business owner access to the lessons learned from the mistakes of other business owners so they can avoid the setbacks and reap all the rewards. Find out how you can get a copy today by emailing Terry@terrymonroe.com .
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debt on the books. This is one of the most difficult situations I have to deal with because you can only get so much money out of a business. Businesses are valued on the amount of cashflow they are able to generate. And if a business isn’t generating much cashflow, even though the real estate may be worth quite a bit, they are not going to get much for their business — and possibly not enough money to pay off the debt against the stores. The owner is faced with either continuing to operate a breakeven — or worse, a losing store — just to keep the bank from calling their note. Or they can hope and pray I find a buyer who will overpay for the business, which doesn’t happen even in the good times like now when convenience stores are selling for top dollar. These are just examples of significant, life-impacting events that may affect one’s business. To learn about more examples of Dismal D stories and how we remedied them, send me an email at Terry@TerryMonroe.com, and I will send you a FREE copy of my book, “Hidden Wealth: The Secret to Getting Top Dollar for Your Business,” which is affiliated with ForbesBooks. Include your mailing address, and I will have one sent to you.
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INSIDE 7824 Estero Blvd., 3rd Floor Fort Myers Beach, FL 33931 1 2 Is It Time to Sell the Family Business? Handle Robocalls Like a Pro
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The Dismal D’s Can Happen to All of Us
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The Secret To Getting Top Dollar
Are You Forgetful Lately?
2 Scientific Methods to Stop Forgetting SELF- EMPOWERING MOTIVATION IS A ‘SHORTCUT’
Why do we supplement our diets with omega-3s and do puzzle games to strengthen the health of our brains? The most important reason is to prevent memory loss. However, in order to enhance our memory and lessen the instances of forgetting both big and little things, these brain-based strategies can help!
NO. 1: AIM FOR MASTERY, NOT RELATIVE PERFORMANCE.
When losing weight, some people find it helpful to stop checking Facebook or Instagram to prevent self- comparisons. Similarly, your brain forgets what’s important when you compare your performance to others.
Researchers at Nagoya University in Japan have found that mastery-approach goals (i.e., developing your own competence) enhance memory of newly learned material, whereas performance-approach goals (i.e., comparing yourself to others) can create “tenuous connections” in memory. The authors concluded the study by saying, “Motivation factors can influence inhibition and forgetting.”
So, it might be time to ask yourself: What motivates you to learn new things, and how can you change your approach?
NO. 2: ASK WHY.
A 2016 study from the European Journal of Social Psychology found that thinking more abstractly can actually reduce memory issues. The study examined how levels of “construal” (examination and interpretation) can affect memory, and their results suggested that “abstract thinking can eliminate retrieval-induced forgetting because of relational processing, demonstrating the roles of the levels of construal on memory inhibition.” In other words, if you know the “how” and “why” behind things you intend to remember, you’ll be more likely to remember them.
If you’ve been forgetful lately, maybe it’s time to rethink how you approach new information — according to researchers, a new source of motivation or critical thinking mindset could make all the difference!
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