banks Archives - Your ExitMap

Quality of Earnings Part 2: Hidden Expenses

John F. Dini — Sun, 11 Jun 2017 11:40:47 +0000

In my last post we discussed quality of earnings audits from a revenue perspective. Customer concentration, marginal lines of business and contracts are the three most common revenue traps. If you are comfortable with your company’s strength and stability as regards to revenue, it’s time to look at your expenses. There are two expense categories that trip up owners in due diligence, one-time (out of the ordinary) expenses, and unrecognized liabilities. One Time Expenses A few years ago I worked with a client who owned a wholesale distribution business. He presented his financial statements to me to determine the practicality of obtaining third-party financing for an ... Read more

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Exit Planning in a New Political Environment

John F. Dini — Sun, 22 Jan 2017 10:31:37 +0000

What does a new political environment mean for business owners who are planning to transition their businesses? Should you accelerate your plans, or slow them down? As I’ve said many times in this space and elsewhere, the biggest single factor in successfully selling a company is the current condition of the financial markets. Since the Great Recession, the Federal Reserve has poured new cash into the system at very low interest rates. This “cheap money” has trickled down to fund a wave of leveraged buyouts by financial professionals seeking a better return than that from more traditional investments. This wave of cash enables some 7,000 private equity ... Read more

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Exit Timing and the Global Economy

John F. Dini — Sun, 27 Nov 2016 13:36:57 +0000

How much will your exit timing be affected by the global economy? Most small businesses serve local markets. Their owners, if they have thought about it, plan to sell to a local individual. If the local market is healthy, why worry about the rest of the world? A few weeks ago I attended a presentation by Austan Goolsbee, former Chairman of President Obama’s Council of Economic Advisors and the youngest member of his cabinet. Dr. Goolsbee was also a college champion debater (he beat Ted Cruz in the national finals) and a member of an improv troupe. That makes him an anomaly in the “dismal science;” ... Read more

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Key Man Policies May Not Cover a Buy/Sell Agreement

John F. Dini — Sun, 02 Nov 2014 12:20:05 +0000

Over the last few weeks, I’ve had a number of conversations with clients about key man insurance. Let me say at the outset that I don’t sell insurance, and have no financial stake in whether any client has coverage or not. The use of such policies, however, may not always fit their intended purpose, especially in smaller companies. The most common intended purpose of a key man policy is to fund a buy/sell agreement. The benefit payment goes to the company, which in turn uses the proceeds to purchase ownership from the family or estate of the deceased. If it works that way, it’s an ... Read more

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