The Entrepreneurs Advocate

SBA Offers Free Youthpreneur Webinar Series To Promote Entrepreneurship and Financial Literacy

“It is critical that young people are exposed to Entrepreneurship and basic finances. Pass this on to any budding Entrepreneurs” CC

SBA News Advisory

PRESS OFFICE                  

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SBA Offers Free Youthpreneur Webinar Series To Promote Entrepreneurship and Financial Literacy

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Recognizes National Entrepreneurship Week & America Saves Week February 20-28, 2010

 

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Release Date:  February 22, 2010   

Contact:  Cecelia Taylor (202) 401-3059

Advisory Number: MA10-02     

Internet Address: http://www.sba.gov/news

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WHAT: The U.S. Small Business Administration will host a series of

Youthpreneur Webinars in recognition of National Entrepreneurship Week and America Saves Week.  The topics will emphasis youth entrepreneurship and engage the next generation of small business owners in skills building and financial empowerment.  They will be able to learn the basics of entrepreneurship, strategies for today’s business world, and using social networking to advance business ideas. 

 

WHEN: February 23-25, 2010

Daily, 11:00 a.m. and 3:00 p.m. (ET)

 

WHO: Be inspired and learn from some of the best in business and

entrepreneurship.

Webinar presenters and topics include:

 

Jennifer Matthews, President and CEO

Creating Financial Literacy, LLC

Topic: Why My Credit Score Matters NOW

Tuesday, February 23 at 11:00 a.m.

 

Vince Shorb, President, The National Youth Financial Educator’s Council

(NYFEC)

Topic: Financial Education/Entrepreneurship Tuesday, February 23 at 3:00 p.m.

 

Steven Harris, President

JS Investment Group

Topic: Youth Entrepreneurship and Financial Literacy Wednesday, February 24 at 11:00 a.m.

 

Michael Simmons, Co-Founder & CEO, Extreme Entrepreneurship Tour

Topic: Why Every Student Should Be an Entrepreneur Wednesday, February 24 at 3:00 p.m.

 

Shonika Proctor, CEO, Renegade CEO’s

Topic: Me…Myself…and Why? A Business Roadmap for Determined Teens Who are Making Their Way Thursday, February 25 at 11:00 a.m.

 

Jason Duff, Founder and CEO, Community Storage & Properties, LTD and COMSTOR Outdoor, LTD

Topic: How to Leverage Top Internet Tools to Grow and Market Your Business at No Cost Thursday, February 25 at 3:00 p.m.

 

HOW:  For free visual and audio access to the Webinar go to

www.ReadyTalk.com

Click “join a meeting” and enter access code 3761101 Then dial 866.740.1260 and enter access code 3761101 (plus the #key) System Requirements:

- Windows, Mac, Linux and Solaris operating systems

- Internet Explorer, Safari and Firefox Web browsers

- Separate telephone line needed for the audio portion

 

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February 20 – 27 is National Entrepreneurship Week, a celebration of the heritage of entrepreneurship in America and NEW opportunities for a NEW GENERATION!  For details on the events, check out the National Entrepreneurship Week Website www.nationaleweek.org

 

February 21 - 28 is America Saves Week. Individuals are encouraged and assisted with assessing their savings progress.  Assistance will be provided by organizations and professionals with an interest in improving the financial security of individuals and families.  For more details, visit the America Saves Week Website www.americasavesweek.org

Is it Time to sell your Family Business?

Deciding whether to sell your family business is a once in a life time event. Should you sell the whole or part of the company to outsiders? Are the 2^nd or 3^rd generation family member’s good options? Are the family members up to the task? For instance, the subsequent failure rate of generations two and three is very high (70 and 88%, respectively).

 

The decision to sell a family business is among the most difficult and important decisions of your career.  After a lifetime of hard work, owners wrestle with a range of emotions and questions. Question #1- Is my retirement fully funded?

 

While considering the decision to sell their business, many owners are currently “kicking themselves” for missing the giddy prices of 3 years ago. However, deal multiples are again rising and private equity and middle market companies have the “dry powder” and want to do deals.

 

Two mistakes business owners make is that they think they know who the “best” buyer is for their business and that they only negotiate with that one entity.  In making these mistakes, entrepreneurs negotiate on their own and inevitably take their eye off the day-to-day business affairs. In the vast majority of cases however, this strategy is doomed to failure.  Their belief is usually based on prior conversations or non-solicited expressions of interests. 

 

In the great majority of our transactions involving this type of “early” interest, managing a competitive marketing program has resulted in a sale to a different buyer with a better deal than the initial party.  Without competition for your business, buyers will rarely serve up their best proposal and, as a result, the seller’s negotiating leverage is minimized.  An Exit Strategy professional also enables business owners to stay focused on running the daily operations of the business during the sale process.  “Last Minute Surprises” lead to reduced value. It is critical that the owner concentrates on the daily business operations.

 

Despite this tough business environment, Exit Strategies need implemented and executed for millions of business owners. How will their decisions impact their family and their personal well-being?  What will become of long-time employees, customers, suppliers, and other important stakeholders?  While the answers to these questions are sometimes conflicting and confusing, one thing is certain:  when evaluating whether to sell their family business, entrepreneurs need to develop a proactive and systematic Exit Strategy.  In doing so, they will receive maximum, post tax dollars for a lifetime of hard work.   

McGwire Returns to Mudville, by Tom Reilly

“I enjoy Tom’s newsletter and this article on being humble and making time to learn hits home” , Chris

By Tom Reilly, the guy who wrote the book on Value-Added Selling

Former St. Louis Cardinal, Mark McGwire, is returning to St. Louis as a batting coach. Notwithstanding the controversy, McGwire could hit a baseball. Now, he’s returning to help other Cardinals hit baseballs. Albert Pujols, the most popular Cardinal first baseman since Stan “The Man” Musial, welcomes the help. The two-time league MVP said McGwire’s return was “awesome” A strong contender for his third MVP with a .327 batting average for 2009 said, “I’m looking forward to working with him.” One of the best, if not the best player in baseball, is looking forward to working with a batting coach!

That changes everything as far as growth and development. Unless you are more successful in sales than Albert Pujols is in baseball, you can get better. The obstacles are predictable—time and ego. Getting better requires time and effort, often more of each than many people are willing to invest. It also requires professional humility. To believe that you are as good as you can become smacks of arrogance. We cannot get better until and unless we believe and admit we can get better.

What are you doing to get better? What are you reading? What are you studying? What are you practicing? How are you training? How are you preparing? How are you getting feedback on your performance? How often are you asking customers how you can improve for them?

Join us on December 16 & 17 for two days of training and coaching on Value-Added Selling. This is your opportunity to get better and focused for the New Year. Visit us online and request an itinerary for this learning experience: www.TomReillyTraining.com

Seminar this Thursday at Stetson’s Celebration Campus…

In these tough economic times, it is more important than ever to plan ahead.

That is why it gives me great pleasure to invite you and your clients to a seminar on Planning Your Exit from Business Ownership. This seminar is presented by the Stetson University Family Enterprise Center in partnership with Holland & Knight, LarsonAllen and my company, Bankers Advocate.

It will be held at the Stetson University Center at Celebration, Florida on Thursday, November 5, 2009.

Whether the exit from ownership is in six months or six years, this factual and hard-hitting seven hours will provide you with the information that you or your clients need for a successful Ownership Exit and/or Transfer.

Learn from Seasoned Professionals how to:

• STRUCTURE YOUR BUSINESS for a Successful Exit
• IMPROVE THE BOTTOM LINE Profits until you Sell
• DEAL with CONFIDENTIALITY ISSUES
• RECEIVE MAXIMUM VALUE for your Business
• KNOW the Types of Buyers and their Value Drivers
• HOW to Sell or Transfer to FAMILY/KEY EMPLOYEES
• AVOID TAX & LEGAL PITFALLS in the Process

This is an opportunity to participate in a valuable interactive seminar and a great networking event.

Can you afford not to attend?

You can view the brochure and register online by clicking on the links below.

To view a detailed seminar brochure : CLICK HERE

To register for the conference on line: CLICK HERE

We hope that you will join us. Please pass this on to anyone who you think would benefit.

Sincerely,

Chris Curtin
COO, Bankers Advocate
(561) 882-1331

PS: Reply to this blog and receive a special friends of Bankers Advocate deep discount.

How the Stimulus Package of 2009 Can Help Your Small Business, Diana Fitzpatrick

(This is a great article by the legal editor of www.nolo.com, Chris)

The economic stimulus package (Recovery and Reinvestment Act) includes tax, loan, and investment provisions for businesses.

The American Recovery and Reinvestment Act of 2009 (commonly called the “stimulus package”) was signed into law by President Obama on February 17, 2009. The stimulus package contains several provisions aimed at helping small businesses, including certain tax cuts and Small Business Administration (SBA) loan provisions.

Stimulus Package Tax Provisions

Section 179 expensing. Section 179 of the Internal Revenue Code allows you to deduct a certain amount of new equipment or other assets in the first year they are owned, subject to a phase-out if you place a large amount of equipment in service in a year. Most depreciable business assets (like machinery, vehicles, and computers) qualify for the Section 179 deduction, though real estate, inventory bought for resale, and property bought from a close relative do not.

Higher limits for the Section 179 deduction ($250,000) and a higher phase-out ($800,000) were enacted as a temporary one-year measure, for 2008, under the Economic Stimulus Act of 2008. To encourage capital expenditures, the Recovery Act of 2009 extends the $250,000 deduction limit and the phaseout threshold of $800,000 for one more year.

Bonus depreciation. The Economic Stimulus Act of 2008 also put in place a one-year-only bonus depreciation for property placed in service in 2008.This special deduction allows taxpayers to depreciate 50% of the cost of new equipment or other assets during the first year the property is placed in service. The stimulus package extends 50% first-year bonus depreciation through 2009.

Carryback of net operating losses (NOLs). Under the stimulus package, eligible small businesses with net operating losses in 2008 can carry those losses back for the prior five years. This is instead of the current two-year carryback period for net operating losses. This will effectively give businesses a rebate on taxes paid in prior, profitable years. Businesses with gross receipts of $15 million or more cannot take advantage of this provision.

Reduced estimated tax payments. Small business owners often pay estimated taxes based on 100-110%% of their prior year’s taxes. The stimulus package lowers the amount of estimated taxes due to 90% of the previous year’s taxes.

Work opportunity tax credit. To encourage hiring, the stimulus package creates two new categories of eligible workers for the work opportunity tax credit — disconnected youth and unemployed veterans. Unemployed veterans are defined as military personnel who have been discharged or released from active duty during the five-year period before being hired and who have received unemployment compensation for four or more weeks during the one-year period before being hired. A “disconnected youth” is defined as someone between the ages of 16 and 25 who is not regularly attending school or employed during the six-month period before being hired, and is not “readily employable by reason of lacking a sufficient number of basic skills.” Businesses who hire these workers in 2009 and 2010 may be able to take advantage of this tax credit.

Stimulus Package Loan and Investment Provisions

Increase in SBA loan guarantees. To stimulate lending, the Recovery Act allows the Small Business Administration to raise its loan guarantees to up to 90% for loans under its 7(a) loan program. Currently, the maximum guarantees allowed are 85% for loans of up to $150,000 and 75% for larger loans. The 7(a) loan program provides government guarantees for loans made to certain eligible small business borrowers who can’t get credit elsewhere. The higher loan guarantees are in effect until the end of 2009, or until the funds are exhausted.

Elimination of SBA loan fees. The stimulus package also eliminates the up-front fee on SBA 7(a) loans that lenders pass on to borrowers. In addition, it eliminates the fees charged borrowers and lenders on 504 Certified Development Company loans. The 504 loans are long-term, fixed-rate loans for small businesses that need to purchase major fixed assets, such as land, buildings, machinery, and equipment. The fees on both these types of loans are eliminated until the end of 2009, or until available funds under the loan programs are exhausted.

New loan program for existing debt. The stimulus package creates a new SBA loan program that provides loans of up to $35,000 for small businesses who need to make payments on existing loans. It is a deferred payment loan, and no repayment is due until 12 months after the loan has been fully disbursed.

Expansion of SBA’s microloan program. The stimulus package provides increased funding to expand SBA’s microloan program. This program provides small loans of up to $35,000 to small businesses.

More surety bond coverage. The stimulus package expands SBA’s surety bond program by raising the maximum contract amount that can be covered by an SBA surety bond from $2 million to $5 million (and sometimes higher). SBA surety bonds help small businesses bid on contracts that they might not otherwise get.

Investor incentive provisions. The stimulus package includes a provision that excludes from taxation 75% of any capital gains an investor earns on small business investments that are held for five years.

by: Attorney Diana Fitzpatrick

Business Owners Land the Whales

I was taking a prospective buyer on a client tour recently. The principal of the buyer’s group is a serial entrepreneur who has started or bought numerous companies and taken each to the next level. We were talking about sales levels and growing the business. He made the statement that he and the core group of his people at the top were the key rainmakers. His companies had the systems, procedures and people in place to service the account, but he went out and landed the “whales”. This meshes with my own philosophy.

Many times smaller businesses plateau at a less than ideal sales level or they take a slide backwards. Owners have lived on word of mouth or a few choice clients, but that is not enough in these economic times. I see owners looking to hire that magic salesman and much time and resources wasted when they inevitably fail. Who can advocate your product and services better then you? Potential clients like dealing with the final decision maker, use this to your advantage.

Many entrepreneurs say they are not comfortable selling. Their vision of sales is high pressure, going for the close. A consultative environment where they listen to their client’s needs and together come up with solid fix is a better path.

Acquisition Multiples Trend Down

I received this in an email from Rich Goeldner of FairValue Advisors. My take on the reduced multiples paid for the smaller mid-market companies is that sales/ebitda trended down for many of them in 2008/2009 and financing dried up. I expect a reversal of this chart in 4th quarter 2009. enjoy. Chris

Acquisition Multiples Median acquisition multiples fell 15-44% across the 3 size categories in the most recent quarter; multiples of mid-size acquisitions dropped the most - nearly 44%. EBITDA multiples have dropped approximately 40-50% since 2007/2008 highs. Deal volume rose approximately 6% in most recent quarter but is down approximately 30% from July 2008 peak. Multiples include acquisitions in past 3 years with positive EBITDA. Excludes acquisitions of banks and real estate companies.

We hope that you find this update informative.  Certainly, we would be pleased to assist you with your valuation needs. Sincerely, Rich Goeldner ASA, CBA FairValue Advisors, LLC 888.212.0495 ext. 103 rich@fairvalueadvisors.com