super bowl interception

Super Bowl Interception – Poor Exit Planning

Ball on the 1 yard line.  A running back averaging over 4 yards / carry.  Less than a minute on the clock. If you are a CEO/Owner, this situation describes YOU just before selling your company.  It is a ONCE IN A LIFETIME OPPORTUNITY. Do you take the high risk approach – pass for a surprise touchdown? INTERCEPTED and the dream of selling at an optimal price is gone. It’s easy to be a Monday morning quarterback – or coach.  But there is something here to be learned by every CEO, every Board Member and every Business Owner.  The lesson is this:  Even the most experienced leaders sometimes want to risk it all when it isn’t necessary. At the 1 yard line, the running back has multiple chances at success.  Could he fumble?  Of course, but what is riskier?  Letting a ball fly through the air or having an experienced running back tuck it away and blast through the line? For most players, if they ever get to the Super Bowl, it is a once in a lifetime event — just like for most CEO/Owners, getting into a position to monetize the company they have spent years and decades growing …

M&A Advisor

Do M&A Advisors Add Value?

Billy Fink, Marketing Manager at Axial just published a great article in LinkedIn entitled “M&A Advisors Proven to Improve Valuations“. He states that advisors, 1) create competition in the sales process, 2) are more important in private transactions and 3) provide extra-valuation benefits.  And he is exactly right — a good M&A advisor should create far more value to the seller than the fee paid. This opens up another area for discussion:  What is the proper role for third-party advisors when growing & ultimately selling a business? You’ve probably met the CEO who insists that he/she can do the accounting, corporate legal reviews, raise money for the business, be the H/R director and find the right buyer for the business.  If you’ve met this person, you know that this CEO is wasting precious resources.  Even if the CEO is multi-talented, if doing the accounting is his/her best use of time, then the business has real problems. Mr. Fink’s article hits a cord with M&A advisors.  I’ve met lots of CEOs who think they will “save money” by doing it themselves.  What typically happens is that business is never sold, or if it is sold, a LOT of money has been …

swiss franc

Swiss Franc … Why Should We Care?

Most people probably haven’t noticed, but the Swiss government did something extraordinary overnight. During the last European crisis, money flooded into the relatively safe Swiss currency.  The Swiss reaction was to fix their currency to the Euro, which at the time helped prop up the Euro and stopped the rise of the Swiss Franc.  Switzerland is not part of the Euro currency club.  The concept was that if the Swiss Franc continued its sharp rise that Swiss companies would be penalized in the world market.  Their goods and services would become far more expensive in other currencies, most especially in the Euro zone, but also in America, Japan & China. Alas, that move was reversed last night. Why would the Swiss government suddenly and without warning reverse its decision to tie its currency & the country to the European Union? Only one answer makes sense:  The European Zone has slipped back into another recession, despite the enormous worldwide “quantitative easing” — governments, lead by the United States, have flooded the world with money in an attempt to restart the growth engine of the world economy. News flash:  It’s NOT working. The Swiss government, I believe, realized that the EU was …

entrepreneurial ceo

Searching For 3 Entrepreneurial CEOs in 2015

Business Owner / CEOs who want to sell some or all of their business often have a problem.  Some CEOs are savvy enough to know they have the problem — most may never know, and that lack of knowledge will result either in failure to find a buyer, or in a purchase price well below what is possible. One CEO (we will call him George) didn’t realize that he had a problem until after a failed attempt to sell his business.  We represented George as a sell side investment banking adviser.  He came to us with a buyer and our job was to advise him in the transaction.  Result?  We advised him NOT to do the deal – and he agreed. Why would we advise NOT to do a deal?  After all, our fee is based on a transaction getting done! Easy answer – the price & terms he was offered were much too low.  His business was not “ready” to be sold.  While he had a successful business, it had not grown in 5 years, fluctuating between $10-12 million in annual sales. I asked him a simple question. “George, would you like to double or triple your revenue, improve …

wellness

“Wellness” in a Physician’s Practice — What does it look like?

I’ve become convinced that an ever growing % of the population is ready to pay for “wellness” as part of their medical care. Why? Over the past few years, deductibles & co-pays have skyrocketed. People are paying more out of pocket and getting the same or less healthcare. What if people could pay what they are now paying and get better healthcare? The baby boomers are healthier & more interested in integrative medicine than ever before. If a quality alternative existed, I believe they would be attracted. So this is the question … What do you think would need to be part of a Wellness Practice. Some docs are promoting Wellness, but don’t act as the patients PC physician. I’m inclined to combine the two so a single physician directs my care. What’s included? Testing? Infusion? Vitamins? Hormone treatments? Nutrition? I’d like to hear from you — if you were starting with a blank sheet of paper to design an integrative wellness program, what specifically would be included? How would you charge for services in such a way that insurance would pay as much as possible? What would the real world model look like?

Raising Equity

5 Common Mistakes to Avoid When Raising Equity

Raising capital for a business, whether it is a start-up or a mature company, can be an extraordinarily frustrating and time consuming experience. Entrepreneurs want to operate and grow their business, not raise capital. But the fact is that for most businesses, the entrepreneur or CEO is responsible for raising capital. When attempting to raise capital, CEO’s very often make some crucial mistakes. These mistakes not only can dictate whether or not the business will be able to raise capital, but also how long it will take and the ultimate cost of the capital. Using the wrong assumptions, raising capital can be impossible. We believe there are 5 common mistakes that CEO’s make when raising capital: 1. Unrealistic Expectations of Value Most of us has watched Shark Tank at least once. Just watch one episode and you will likely see this mistake. The entrepreneur goes to professional investors with a company that did $100,000 in sales last year and confidently tells the Sharks he will sell 10% of his business for $1 million. What’s the chance of this CEO getting funding? Zero. With few exceptions, investors will pay for what you have already done – not what you believe you …