Before You Sell Your Family-Owned Business
There once was a family-owned bakery that had sales in the millions. The bakery sold bread to restaurants, supermarkets and some retail outlets. The founder gave each of his 5 children 20 percent ownership of the business. The kids really didn’t want to work in the business, so they turned the operation and management over to 2 members of the third generation. For some years the business...Read More
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Selling: Do You Need a Fairness Opinion?
Much has been written about “fairness opinions” due to the financial manipulations among companies such as Enron, Tyco and others. The conflict in the use of fairness opinions was (and is) that an investment banking firm not only handled the sale of a company, but also got paid for doing a fairness opinion. For example, when the Bank of America decided to buy Boston’s Fleet bank, B of A...Read More
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What Do the Following Companies Have in Common?
This is just a partial list: Church’s Chicken, Uno Chicago Grill, Charlie Brown’s, Domino’s Pizza, Burger King, Cinnabon, Sizzler. The first response would be that they are all in the food business, and that’s correct. Now name the second thing that they all have in common? Give up? Well, they (and many others) have been purchased by private equity firms. And, apparently, this is just...Read More
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Does Your Company Have Pricing Power?
If Starbucks raised the price of a cappuccino, sales most likely would not be affected. If your attorney raised his or her hourly rate, would you switch law firms? If a company or service firm does not have pricing power, then its value is less than it should be. Here are a few ways to develop or increase pricing power:producing a discernible branded product or service innovating with...Read More
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A Seller’s Dilemma
When one sells their house, the best deal is usually the highest price. When one decides to sell their business, there may be other factors to consider. Many buyers are similar to the “overlooked” buyer described below, serious and qualified; and most sales of businesses are win-win transactions. However, there are a few exceptions, and sellers should consider them carefully, balancing...Read More
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