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American Business Brokers & Advisors Founder & President MERGERS & ACQUISITIONS SUCCESSION & BUSINESS ADVISORY BUSINESS VALUATIONS
DECEMBER 2021
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REASON No. 2 No Succession Plan The lack of a clear successor is another reason business owners decide to sell. Either the children are not capable of running the business or are not interested in running the business going forward. A lot of the time, the business was the father’s dream, and he and his wife have been very successful in building and growing the business, but it doesn’t mean the same to the children because it was not their dream. The business was always there when they were growing up, and they tend to take the business and all the hard work that it took to build the business for granted. Not having a qualified successor is more common than one would think, and the wise business owner will recognize this and begin the process to sell the business while they are still in control and can direct the destiny of the funds from the sale of the businesses. With succession, you want to start early and talk to the person you think is going to be your successor and get them actively involved. A recent client of mine said that his dad started him and his brother in the business when they were in high school, working in the business and then making decisions for the business. My client said he was so upset with his dad for making him do a lot of crummy jobs and putting a lot of responsibility on him and his brother, but then, as he got older and they continued to work in the business, it eventually grew into a large, successful operation. He said they would have never been able to operate the multiple businesses they now own if they had not started at such a young age. Plus, people and situations change. Parents often have the conversation with their children that they are going to take over the business after they mature and go to college. But sometimes those children change during college, and the
family business doesn’t appeal to them anymore. Which is okay, but they forgot to share this fact with their parents who were still thinking the children were still interested in the family business. Even though the company may be big enough to warrant their joining the business, they are not interested because of their newfound interest and desires from obtaining their college education. This can be painful when it happens. There is nothing wrong with laying out the facts regarding the opportunity that the family business presents to them. But forcing the company on your children will only result in resentment or poor performance or both. The children can’t be successors. The reality is that not everyone is capable of running a business, and just because they are your children doesn’t automatically make them capable. 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 parent’s hopes and dreams, were not cut out to run the family business. This is where the saying “Thunder, Blunder, Under” came from, and it is when unqualified children are either forced into or allowed into the family business and are not qualified to operate it. By the way, “Thunder, Blunder, Under” means the first generation made the business successful. The second generation floundered around and somehow kept the business together, and the third generation took or let the business go under. Family members dislike working together. Here again, we need to apply the Theory of Reality. The reality is that maybe all your kids are capable, but they can’t seem to get along with each other. 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 with 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. I have seen situations where there are four siblings and only one works in the business; the one who has taken over business operations does a great job but their siblings constantly criticize them for the way they run the business — yet they are all getting paid equally from the business. This usually leads to the sale of the business to get rid of the sibling criticism and strife. I have also seen situations where the oldest son gets to run the business but doesn’t have the ability to be the president, and the business loses millions of dollars a year, but no one says anything until there is nothing left to sell. I’ve seen other situations where the children are brought in to work in the business with their new spouses, and both the children and spouses are working for the business; then, they get a divorce, but the in-law was the better operator of the two but had to go because of the divorce. The point here is that succession planning is a serious issue, and it takes a lot of courage to recognize it and do something about it in a family setting. To learn more about succession planning, send me an email at Terry@TerryMonroe.com and mention SUCCESSION PLANNING, and I will send you a FREE copy of my book, “Hidden Wealth: The Secret to Getting Top Dollar for Your Business.” Please include your mailing address, and I will have one sent to you. –Terry Monroe
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Cryptocurrency — Is It Safe?
When people hear the word “cryptocurrency,” some may associate it with cybercriminals and unscrupulous activity. But is using cryptocurrency actually safe? Let’s take a look at several common concerns to answer that question. IS CRYPTOCURRENCY SECURE? If you put your money into a bank insured by the Federal Deposit Insurance Corporation (FDIC), you know your money is safe (unless something extremely drastic happens to the economy). However, if you put your money into cryptocurrency, you might wonder if it’s secure or whether hackers can take it from you. Luckily, the blockchain technology of cryptocurrency records every single transaction as timestamped “blocks” in a digital ledger. Additionally, every transaction requires a two-factor authentication process. It’s a complex, technical process, but it makes cryptocurrencies extremely difficult to tamper with, especially the biggest currencies like Bitcoin or Ether.
If you’re considering putting most of your funds into cryptocurrency to use like a checking account, however, it may not be the best decision. The market fluctuates dramatically, even if the values have, overall, risen to enormous highs over the past few years. IS CRYPTOCURRENCY SAFE TO INVEST IN? As a newly created market, cryptocurrency is still fairly volatile in the eyes of financial experts. However, that doesn’t mean it’s a bad idea to invest or play the market. Just make sure to keep your cryptocurrency portfolio diversified, and don’t invest too deeply in one currency over another. Research the cryptocurrency exchange you plan to use. Never invest more than you’re willing to lose, and try to talk with experienced crypto investors to gain their tips and insights. By utilizing this knowledge, you can use crypto thoughtfully and safely, and you’ll have some insights to share when people ask you the same questions. continue to get checks in the mail. Some people are investing time and money to improve themselves so they can find a vocation or job for the long term, while many businesses can’t seem to find people who want to work and, unfortunately, have to shut their business down for lack of employees. It used to be if you had the money, you could buy about anything you wanted, but in today’s world, even if you have the money, there is a good chance the item you want is not available or won’t be available for months or possibly years. 2021 has taught us that we can do without many things, including in-person customer service. Instead, we have learned how to buy and sell things without having to talk to a real person. (I’m sure this may be more efficient, but I miss the opportunity to talk to a real person, not artificial intelligence.) We have learned to eat in our vehicles or at home with food delivered to us or left on the doorstep. Yes, a lot has changed over the last 12 months. But one thing has not changed, and that is, even through all the chaos and unknowns we may face going forward, people like people, and we like to have a personal relationship with others. The world can create all of these things that are supposed to make our lives better and safer, but people still need and want personal relationships so we can enjoy each other.
Not all cryptocurrencies are “unhackable,” however. In 2018, hackers robbed Coincheck investors of nearly $534 million.
IS CRYPTOCURRENCY SAFE TO USE? Currently, it’s perfectly legal to buy and sell with cryptocurrencies. In fact, if you use a crypto exchange like Gemini, many big-box merchants have partnered to trade and sell their goods for cryptocurrencies like Bitcoin. 2021: A Year in Reflection As we near the end of 2021, we can now reflect on what a year it has been. This is not to say it has been a bad year or a good year, but I view it as a year of transition. By transition, I am referring to the many different things that came into play during 2021. We partially came out of a pandemic. I say “partially” because, in some places, you still need to where a mask, and in others, you don’t. Some people have been vaccinated by choice, and others are forced to be vaccinated in order to keep their jobs. Then we have those who don’t have a job but
To that, I say Merry Christmas to everyone, and may we all enjoy each other and continue to look forward to another wonderful year in 2022.
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WORD SEARCH Take a Break!
Get the Wisdom of Other Business Owners’ Mistakes FROM TERRY MONROE’S ‘HIDDEN WEALTH’
Are you planning on selling your business in the next 1–2 years? If so, you need to start planning 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 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 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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INSIDE 7824 Estero Blvd., 3rd Floor Fort Myers Beach, FL 33931 1 2 Why Do Business Owners Sell Their Business? Is Virtual Money a Safe Choice? 2021: A Year in Reflection
Sudoku Solution
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Get the Wisdom of Other Business Owners’ Mistakes From This Book Embrace Being Wrong With Adam Grant’s Help
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Think about the sting you feel when you are proven wrong. It hurts, doesn’t it?
In “Think Again,” Grant’s third book, he argues that as rapidly as we get information in today’s digital world, we cannot be expected to fully know all of it. Being wrong is part of human nature, but as we gain more accessibility to information, we must be willing to do two things: rethink and unlearn. Grant challenges readers to stand in the discomfort of being wrong, celebrate that there is something new to learn, and challenge themselves to interact with those who propose a new way of thinking. By doing so, Grant asserts that we can speak and argue with conviction while actually engaging and listening to arguments as if we are wrong. This allows us to learn, engage, and grow. In “Think Again,” Grant asks readers to consider better ways to approach their steadfast beliefs. Readers will find amusement in Grant’s real-world examples of turning skeptics into believers within a variety of topics. And, through these examples, readers will discover new ways to listen so they can gain a greater understanding of the world around them. You can pick up your copy of “Think Again” and other books by Grant from an independent book retailer or by visiting Amazon.com.
THINK BETTER WITH ADAM GRANT’S
But what if it didn’t have to? Better yet, what if it shouldn’t?
Regardless of our attempts at humility, humans’ egos have inflated, and we are all conditioned to believe that being wrong somehow equates to being a bad person. However, renowned author and psychologist Adam Grant challenges this notion in his New York Times bestseller, “Think Again: The Power of Knowing What You Don’t Know.”
‘THINK AGAIN’
With today’s divisive climate, Grant argues that we hold our beliefs up like a badge, illuminating them so brightly that we become blind to other truths or realities. Far too often, our mindsets focus on what is black and white, rather than understanding the gray nuances found in between.
A Better Mindset for Growth
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