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6 Books About Growing A Business That You Should Read

Growing a Business

By Paul Hawken

In this book, Paul Hawken explains how a successful business is an expression of the individual behind it, along with practical advice, common sense, and down-to-earth ideas. Even though it was written 30 years ago, it remains an excellent and very relevant read, backed by the fact that the author’s own companies are still successful after all these years.

 

Organizational Physics - The Science of Growing a Business 

By Lex Sisney

The author of this book spent more than a decade leading and coaching high-growth technology companies. In his work, he discovered that companies that thrive do so in accordance with six universal principles. The book covers a blend of important business and entrepreneurial topics in a manner that stands out from other business books.

 

Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

By Mike Michalowicz

In this book, the author offers principles to simplify accounting and easily manage a business through analysis of bank account balances. The theory is that a small, profitable business can be more valuable than a large business surviving on its top line, and those that achieve early and sustained profitability have a better chance of maintaining long-term growth.

 

Ready to explore your exit and growth options?

 

Explosive Growth: A Few Things I Learned While Growing To 100 Million Users - And Losing $78 Million

By Cliff Lerner

This best seller provides step-by-step instructions, case studies and proven tactics on how to explode business growth. It reveals the detailed growth frameworks that propelled the author’s small online dating startup to grow to 100 million users while coupling humorous storytelling with concrete examples.

 

Traction: How Any Startup Can Achieve Explosive Customer Growth

By Gabriel Weinberg

Traction is based on interviews with more than 40 successful business founders about their real-life successes. It covers 19 channels that can be used to gain traction for a business, and how to select the best ones for your company. The book discusses topics such as targeted media coverage, effective email marketing strategy, and online search optimization.  

 

Growing Influence: A Story of How to Lead with Character, Expertise, and Impact

By Ron Price and Stacy Ennis

Growing Influence is packed with relatable human experiences and practical advice on developing the right leadership skills. It chronicles two main characters’ growth as they applied the principles in the book, mixing solid business advice with a novel that is fresh, timely and inspiring.

 

Ready to Grow Your Business?

Contact us for help with unique growth strategies for your company and how we can partner for your successful future.

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9 Ted Talks Every Business Owner Should Watch

1. Globalization Isn't Declining—It's Transforming
Arindam Bhattacharya

https://www.ted.com/talks/arindam_bhattacharya_globalization_isn_t_declining_it_s_transforming

Mr. Bhattacharya is a Boston Consulting Group Fellow, Senior Partner in their New Delhi office, and worldwide co-leader of the BCG Henderson Institute in Asia. Hear his interesting argument as to why globalization is not going extinct but instead is evolving due to cross-border data flow.

2. How to Build a Company Where the Best Ideas Win
Ray Dalio

https://www.ted.com/talks/ray_dalio_how_to_build_a_company_where_the_best_ideas_win

Mr. Dalio is the founder, chair, and chief investment officer of Bridgewater Associates, the largest hedge fund in the world. Learn how his strategies helped him create such a successful hedge fund and how you can use data-driven group decision making to your advantage.

3. Why the Secret to Success is Setting the Right Goals
John Doerr

https://www.ted.com/talks/john_doerr_why_the_secret_to_success_is_setting_the_right_goals

In this talk, engineer and venture capitalist Mr. John Doerr discusses the established goal-setting system "Objectives and Key Results," or "OKR," which is currently being used by companies such as Google and Intel.

4. The Global Business Next Door
Scott Szwast

https://www.ted.com/talks/scott_szwast_the_global_business_next_door

Mr. Szwast is the marketing director for UPS, and he has spent 25 years supporting the international transportation industry. In this talk, he explains how the image of global business is misunderstood and why businesses should stop hesitating to consider crossing borders.

Do you have an exit or growth strategy in place?


5. How to Break Bad Management Habits Before They Reach the Next Generation of Leaders
Elizabeth Lyle

https://www.ted.com/talks/elizabeth_lyle_how_to_break_bad_management_habits_before_they_reach_the_next_generation_of_leaders

Tune in as esteemed leadership development expert Elizabeth Lyle offers a new approach to cultivating middle management in fresh, creative ways.

6. Business Model Innovation: Beating Yourself at Your Own Game
Stefan Gross-Selbeck

https://www.ted.com/talks/stefan_gross_selbeck_business_model_innovation_beating_yourself_at_your_own_game

Mr. Gross-Selbeck is Partner at BCG Digital Ventures, and he has 20 years of experience as an operator and a consultant in the digital industry. In this talk, he discusses the unique aspects of today's most successful start-ups. Also, he shares strategies for duplicating their philosophies of disruption and innovation that can be applied for any business.

7. How the Blockchain is Changing Money and Business
Don Tapscott

https://www.ted.com/talks/don_tapscott_how_the_blockchain_is_changing_money_and_business

Mr. Tapscott is the executive chairman of the Blockchain Research Institute. In this talk, he explains Blockchain technology and why it is crucial that we understand its potential to redefine business and society completely.

8. What it Takes to Be a Great Leader
Rosalinde Torres

https://www.ted.com/talks/roselinde_torres_what_it_takes_to_be_a_great_leader?referrer=playlist-talks_for_when_you_want_to_sta

In this talk, leadership expert Rosalinde Torres describes simple strategies to becoming a great leader, based on her 25 years of experience closely studying the behavior and habits of proven leaders.

9. How Conscious Investors Can Turn Up the Heat and Make Companies Change
Vinay Shandal

https://www.ted.com/talks/vinay_shandal_how_conscious_investors_can_turn_up_the_heat_and_make_companies_change

Mr. Shandal is a partner in the Boston Consulting Group's Toronto office, leading their principal investors and private equity practice. Hear his chronicles of top activist investors and how you can persuade companies to drive positive change.

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What Is A Strategic Partner?

A strategic partner is another business entity with which you form an agreement to share resources with the mission of growth and mutual success. There are different types of strategic partnerships.

  • Horizontal Partnership: Businesses within the same field join alliances to improve their market position. Example: Facebook and Instagram.
  • VerticalPartnership: Businesses team up with companies within the same supply chain (suppliers, distributors and retailers), often to stabilize supply chains and increase sales. Example: LiveNation and Ticketmaster.
  • Equity Partnership: An investor acquires a percentage interest in a business, providing needed capital and sharing in profits and losses.
  • Joint Venture: Two or more businesses form an entirely new legal entity in which the profits and risks are shared, and the original companies continue to exist on their own. Example: Microsoft and NBC’s creation of MSNBC.
  • Merger: Two companies agree to go forward as a single new company and the original companies no longer exist. Example: Exxon and Mobil, now Exxon Mobil Corp.
  • Acquisition: One company takes over another company and establishes itself as the new owner. Example: AOL and Time Warner, now Time Warner.

Why Do I Need One?

A strategic partnership can be an extremely powerful tactic that gives your business a competitive edge. According to a study by the CMO Council, 85 percent of business owners believe partnerships are essential for business success.There are several reasons why it is a commonly relied-upon growth plan.

  • Expansion into new markets
  • Increased brand awareness
  • Product line extension
  • Access to new customers
  • Improved supply chain performance
  • Added value for existing customers
  • Acceleration of innovation
  • Strengthening of weaknesses
  • Sourcing of capital

Ready to explore your exit and growth options?

A successful partnership must be built on a solid growth strategy and make sense from a capabilities perspective. The goals, values and culture of all partners should be aligned. You also need to have the right infrastructure in place. And the timing of the venture can be critical depending on the market. A partnership is a major endeavor and you absolutely want to get it right. Unfortunately, most organizations are not armed with the proper connections, resources and management capabilities to maximize the potential of a partnership. According to a report by the Business Performance Innovation Network (BPI):

  • 43 percent of business partnerships have high failure rates.
  • 45 percent are unable to maintain long-term, successful relationships.
  • 42 percent of partnerships are not well leveraged.
  • 67 percent of companies that agree to work together lack formal partnering strategies. 

How to Get It Right

The smartest way to ensure that you are entering into a successful partnership is to seek the guidance of an advisor such as Benchmark International. We have the connections, experience, data-driven analytics, and knowledge to help you devise a carefully crafted growth strategy that is built on confidence and captures the most value. If you are a founder, an owner, an entrepreneur, or part of the leadership of an established company, we encourage you to reach out to us and start the conversation about how a strategic partnership can benefit your business.

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M&A Outlook for Tennessee Business Owners

The state of Tennessee is expected to see sustained economic growth in 2019. The state has a record-low unemployment rate, with nearly 43,000 new jobs projected for Tennesseans this year. The state’s inflation-adjusted gross domestic product is also expected to rise. The transportation and utilities sectors are predicted to see positive gains and the healthcare and real estate markets are expected to remain strong.

 Ready to explore your exit and growth options?

A Healthcare Hub

Since 2017, the U.S. state of Tennessee has experienced a surge in M&A activity. The healthcare and technology industries are major drivers behind the increased action, especially in the city of Nashville. In 2018, the private equity firm KKR purchased Envision Healthcare Corp. for $9.9 billion. Apollo Global Management acquired LifePoint Health for $5.6 billion. LifePoint Health then merged with RCCH HealthCare Partners. This momentum is expected to continue through 2019, with much optimism surrounding the healthcare market in particular.

According to Mergermarket, Nashville ranks fifth in the U.S. in terms of the overall value of healthcare M&A deals closed since 2015, with $30 billion in transactions. The upswing in activity is largely due to new technological and data opportunities in the healthcare sector.

In the early part of 2019, we have already seen major M&A ventures surrounding Nashville healthcare businesses. Maryland’s Omega Healthcare acquired Nashville’s MedEquities Realty Trust, Inc. for $600 million. HealthStream, Inc. purchased healthcare-training company Providigm for $18 million. HCA Healthcare, Inc. purchased North Carolina-based Mission Health for $1.5 billion. HCA now owns and operates more than 170 hospitals in 20 states across the country.  

It is important to note that Nashville is home to the headquarters of almost 20 publicly traded healthcare companies and an overall industry that creates more than $92 billion in annual revenue. These healthcare companies employ more than 570,000 people worldwide. The area is anticipated to continue to shape the industry landscape in what is an increasingly inviting market. Strategic buyers and private equity investors will be keeping a close watch on the growing opportunities in this region as the year progresses.

The Real Estate Market

Another industry that is forecast to have a strong year in Tennessee is real estate, specifically in Nashville, which is home to more than 600,000 people. The city’s real estate market has continued to grow over the past decade. Home values increased 8.2% last year and are expected to go up 8% this year. According to the U.S. Census Bureau, Nashville ranks as the nation's fifth-surest investment bet for 2019. This real estate market is positively impacted by several factors, such as ample redevelopment opportunities, low mortgage rates, high demand for housing, a large student population, and plenty of young families. Because Nashville is also known as the Music City and boasts a major tourism industry, there is also a large market for tourism-related rentals.

The attractive quality of life is also a big draw. Last year, Nashville was ranked 11th out of the 100 best cities to live by U.S. News & World Report, up from 13th the year before. We will have to wait and see if it climbs even higher on the list in 2019. 

In addition to the city of Nashville, the Memphis and Knoxville areas also offer attractive real estate markets for investors. This is due to affordable housing and high quality-of-life benefits.

Make a Move

If you are a business owner looking to create value, whether it’s in the state of Tennessee or on the other side of the world, contact Benchmark International to craft a strategy that best suits your company and your aspirations. 

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2019 Outlook for the Construction Industry

The outlook for the global construction market for the year of 2019 remains positive, with an expected five-percent sector-wide growth in revenue. Robust economies, low interest rates, and increased infrastructure spending are key factors behind the increased confidence. The world’s fastest growing market is the Asia Pacific region, due to growing investments in China and India’s construction sectors. In North America and Europe, growth is being driven by new technologies in already strong construction markets. Also, a number of South American and Middle Eastern countries may see their markets recover in the coming year and have the potential for growth in the future.

M&A Momentum

Mergers and acquisitions for the construction industry are poised to follow the vigorous deal activity of 2018. Construction tech startups raised $1.27 billion in venture funding in the first three quarters of 2018 alone. Public companies were seeking growth. There was increased interest in individual sectors such as energy. Private equity firms were actively buying and selling. Another significant factor was a need for ownership changes due to a growing retirement-age population. These trends are predicted to continue throughout 2019.

Tech Startups

Construction technology startups are expected to continue to have a considerable impact this year. This industry segment has seen more than $10 billion in funding over the past 10 years, with most of the money coming from early-stage venture capital deals. As these tech companies evolve, bigger firms are making full acquisitions. One strategic reason behind these large acquisitions is for companies to procure more talent in a more efficient manner, which in turn is anticipated to drive business growth.

Smart Cities

Society is seeing a heightened focus on infrastructure upgrades and the creation of smart cities. In 2016, smart-city tech spending reached $80 billion globally. By 2021, spending is expected to grow to $135 billion. Smart cities use Internet sensors and other technologies to connect elements across a city to gather data and enhance the lives of its residents. Partnerships between private and public companies are helping governments incorporate new technologies in an increasingly urbanized world. The advent of smart cities was initially seen in Europe, and now the U.S. has begun to integrate technology into urban infrastructure.

Offsite Construction

The quickly growing modular construction market is projected to reach $157 billion by 2023. The capability to build taller modular buildings is reaching new heights, with some buildings stacking up to almost 20 stories. This offsite type of construction is addressing certain industry needs, such as the need for skilled labor, the need for affordable housing, and the need to complete projects more quickly.

Connected Construction

A rapidly emerging trend that many investors are watching closely is connected construction. Companies are incorporating technology into construction sites to save time and money. Bluetooth connectivity is driving the emergence of new worksite tools that can be tracked, monitored, and even deactivated. Mesh networks are enabling sites to be fully connected to wireless networks in order to streamline processes around obstacles in the way of man-hours, status updates, supply deliveries, blueprint consultations, and more.

These emerging technologies have prompted several recent acquisitions, just to name a few.

  • Autodesk Inc. purchased construction productivity software company PlanGrid for $875 million.
  • Autodesk also spent $275 million to buy BuildingConnected, a networking platform of more than 700,000 construction professionals.
  • Trimble bought construction software company Viewpoint from Bain Capital for $1.2 billion.   

Enlist Our Expertise

If you are interested in buying, selling, creating a growth strategy, or even devising an exit plan for your business, contact Benchmark International to get the expertise that is proven to make successful deals happen around the world every day.

 

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Dustin Graham was interviewed by Business Day TV on “How to Value Your Business”

Benchmark International's Dustin Graham, Managing Director of the Cape Town and Johannesburg offices in South Africa, was interviewed by Business Day TV. The "How to Value Your Business" discussion can be viewed here: 

 

 

Is transformation important to your business?

Business Day TV is broadcast on Channel 412 on DStv and is available to over 10-million viewers in 9 countries across Southern Africa. It is one of three TV stations owned by The African Business Channel.

ABC is owned by SA’s leading financial publisher BDFM, publisher of Business Day and Financial Mail. BDFM in turn is owned by the Times Media Group, one of SA’s largest media houses. One of Business Day TV’s strengths is its access to content from this extensive network.

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Rising Interest Rates – How Does This Affect the Sale of My Business?

Most business owners have become acutely aware of how a change in interest rates can impact their financing decisions.  Whether it means taking advantage of a competitive rate and refinancing previous notes or whether it means holding off on acquiring a needed piece of equipment until the monthly payment becomes more manageable; the interest rate associated with obtaining debt can play a major role in the decisions a business owner makes in the day-to-day operations of their company.  But, how do interest rates impact the sale of a business?  Is there a correlating relationship between interest rates and activity in the M&A market?  If there is, what is the importance of timing the sale of a business based on the indications provided by the Federal Reserve?  All of these questions are important to consider as a business owner begins to contemplate the potential sale of their company.

Ready to explore your exit and growth options?

The Federal Reserve has indicated that it is planning on increasing interest rates as it is continuing to pull back from its decade-long effort to stimulate economic growth.  As of November, 2018, the Wall Street Journal Prime Rate was 5.25% whereas one year prior it was 4.25%.  This metric is important as it consists of a survey of the 30 largest banks and is the rate at which banks will lend money to their most credit worthy customers; additionally, this rate will move up or down in lock step with changes made by the Federal Reserve Board.  So, what does this mean for those who are in the market to sell their business?  An increase in the federal funds rate increases the cost of borrowing and hence affects the value of merger deals, especially if a portion of the transaction is being financed through loans.  If the company to be acquired is highly leveraged and the cost of debt goes up, the internal rate of return is impacted, lowering the valuation of the company. 

The timing of when a business enters the open market for sale as well as the speed at which interest rates rise also plays a role in the impact that interest rates have on activity in the M&A market.  A methodical rise combined with a strengthening economy, which the United States has experienced over the past 18 months, should not have a detrimental impact on the aggressiveness with which buyers enter the acquisition market.  The reason that a controlled and steady increase in interest rates mitigates the risk associated with increased cost of debt has to do with the corresponding increase in corporate confidence.  With interest rates having been at historical lows over the past several years, many companies in the market to buy are armed with strong balance sheets earned via normal operations of the business as well as having taken advantage of low market interest rates to issue debt.  This cash held on the balance sheets of acquirers in the market may deflect some of the increase in borrowing cost due to the availability of deployable capital.  Specifically addressing those sellers looking to sell a business in the middle to lower middle market space – a slow rise in rates will give them an opportunity to cash out and use this new-found liquidity to put their money back to work in a recovering and dynamic market. 

In conclusion, the general consensus is that rising interest rates aren’t going to put a damper on mergers and acquisitions activity, at least not in the near-term.  However, as interest rates continue to increase, there will come a time when the increased cost of borrowing shifts the economics of valuation and activity.  The buyers most affected by the increase in rate will be those that rely heavily on financing through loans to complete an acquisition.  Fortunately for sellers, interest rates being at historical lows has helped buyers compile large amounts of cash on their balance sheet which, when combined with acquirer confidence in the business and consumer marketplace, a taxation environment that can be viewed as business friendly, the ideal conditions for selling begin to take shape.  It is important to take note that an increase in interest rates does not have as large of an immediate impact as the speed at which those interest rates increase.  As the Federal Reserve continues to be relatively transparent with their intentions regarding gradually increasing interest rates, and with firms having taken advantage of historically low interest rates and compiling large amounts of cash on the balance sheet, the ideal time to sell a business, particularly one in the lower middle market space, will be sooner rather than later.  As time goes on and increased rates continue to take a bite out of returns on investment, there will come a time when the balance will shift from a sellers’ market to one that is in favor of the buyer.

 

Author
JP Santos 
Senior Deal Associate
Benchmark International
Ready to explore your exit and growth options?

T: +1 615 924 8522
E: Santos@benchmarkcorporate.com 

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Supreme Court Makes M&A More Difficult

Federalism has always posed challenges for middle market M&A. While compliance with federal laws and regulation does not typically lead to issues in acquirers’ due diligence on middle market companies, the companies do often have problems with those pesky out-of-state state-level issues. Experience indicates that this is true for a variety of reasons. First, many of these companies have only recently expanded into other states and, as is common in a growing business, operations often get ahead of back office tasks (such as compliance). Second, owners of middle market businesses are often selling precisely because they realize that their businesses have grown to the point that they require additional overhead expenses that the owners are not interested in dealing with. Third, ever states’ rules are different and ever-changing and it is very hard to get a handle on six, or a dozen, or 49 different sets of rules and shape a business compliant with each set. Fourth, and nobody likes to admit this, states can be a bit lax on enforcing their rules, especially on out-of-state companies.  Acquirers are well aware of these facts and, as a result, dig deep on state-level issues in their due diligence.

While very few business owners are attorneys, most have at least a vague sense that when they establish a “physical presence” in a state, they need to start worrying about that state’s laws. Most probably also realize that physical presence is a bit fuzzy and that each state interprets the term differently but the US Constitution places a limit on the breadth of that definition due to the Interstate Commerce Clause. So, this has always been a nebulous issue but at least there was a bit of a bright line test around when a company might have to start thinking about looking at the rules in a new state for things such as income tax, collection of sales tax, workers compensation and the like. 

Ah, things were so much easier before 2018.

Do you have an exit or growth strategy in place?

*  *  *

Then, on October 1, 2018, the Supreme Court issued its ruling in the case of South Dakota v. Wayfair Inc., et al. South Dakota was attempting to require the online retailer Wayfair to collect sales tax for online sales for which goods were shipped into the state’s boundaries. Wayfair had a very strong case that it had no physical presence in the state and therefore the state could not force it to do anything, especially not collect taxes for Pierre. The state argued that it had a very powerful statute that said even without physical presence it could force companies to collect sales tax on sales made into the state if the seller had an “economic presence” in the state. Wayfair responded that decades of Supreme Court rulings indicated that this statute violated the US Constitution as an unfair restraint on interstate commerce. The Supreme Court stepped in and changed its mind. 

*  *  *

Since that day, the bright line with regard to when to start worrying about a state has been erased – at least with regard to sales tax. And, in the four months following the opinion, states have begun to rub that big eraser across other areas of law as well. The next to disappear is likely state income tax, then perhaps use tax, workers compensation, and unemployment insurance. As of the writing of this article, of the 45 states that have a sales tax, all but eight have already passed the economic contacts test for sales tax.  (That sure didn’t take long.) How many middle market companies (selling items subject to sales tax) have adapted their practices to this tsunami of a tax change? From what we’ve seen, just about zero. How many acquirers have adjusted their due diligence process? Let’s say the adoption rate there is at least as fast as those of the 45 states - and that is being generous to the states.

The results on M&A already include (i) longer due diligence, (ii) acquirers demanding larger escrows and holdbacks, and (iii) purchase price adjustments. The longer middle market companies go without getting up to speed on the new reality, the larger the potential penalties on the business once the acquirer gets hold of it and therefore the larger the issues will become in the deal process.

Author:
Clinton Johnston
Managing Director
Benchmark International
Ready to explore your exit and growth options?

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Women in Power

Posted on November 12, 2018 By in US Election + Business Tips + Economy + business owner + Women

“If particular care and attention is not paid to the ladies, we are determined to foment a rebellion, and will not hold ourselves bound by any laws in which we have no voice or representation;” these words were spoken by Abigail Adams, First lady of the United States and wife to John Adams, one of the founding fathers and writers of the Declaration of Independence.  

There is no doubt that women have been aggressively challenging the status quo in their pursuits for independence, equality, and active leadership over the last couple decades. This past Tuesday November 06, 2018, women took their achievements to a whole new level and broadened the gamut of political representation to include the largest body of female members of Congress thus far.

The ladies deserve a round of applause after the turnout of this year’s US midterm elections. There were some notable historic voting records surpassed. So far, there will be at least 119 women serving in the 116th Congress. This number is up from the historic high of 107.

The central message being supported by both sides of the fence is that this turnout of elections was a huge success for this gender group as a whole. Women are playing a much larger role in law declarations than ever before, and their voice is being represented at a louder volume than ever before.

This group of elected women represents several firsts for this minority. The next Congress will have a record number of women of color, a record number of non-incumbent women, its first Native American women, its first Muslim women, and the youngest woman ever elected to Congress. Exit polls illustrated that 8 out of 10 Americans said it’s important to elect more women to public office.

Women are upending the idea that “men wear the pants,” and are taking the reins in corporate settings as well. According to the National Association of Women Business Owners, “more than 11.6 million firms are owned by women, employing nearly 9 million people, and generating $1.7 trillion in sales as of 2017.” Moreover, women-owned firms account for 39% of all privately held firms. These stats have been growing consistently for the last two decades as women start to play larger roles in business development and implementation, and they are only expected to continue growing.

Benchmark International supports women in their pursuits of their passions and their drivers for success, and this is highlighted by the success of one of our very own inspirational women. On November 06, 2018 Managing Director, Kendall Stafford, challenged the mainstream middle-market mergers and acquisitions sector when she was awarded the title of Investment Banker of the Year by The M&A Advisor.

The awards presented by The M&A Advisor are essentially the equivalent to the Oscars for the M&A world. Stafford is a key player in transactions completed by Benchmark International, and she is a valued team member. Stafford was among a list of eight finalists, and she was the only woman on that list, and she came out on top. Benchmark International believes in fostering success and supports our employees and our clients in all they wish to achieve.

When it’s time to sell your business, you want a team that is on your side. If you are a woman looking to get the most from a full or partial sale of your business, we are dedicated to facilitating an acquisition that gets you the best value for your business in every facet.

If you are ready to start your exit strategy, you can call the Benchmark International headquarters at (813) 898-2350 to speak with a professional who can get you on the path you seek.

Schedule a call to speak to an Analyst

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How Can I sell the Business I Love ?

Bringing a business to success is an emotional journey from start to finish. Years are spent making sacrifices and taking tough decisions. So, as you get closer to retirement age, choosing to sell your business can be a bittersweet step to take. You raised your business like a child, and you have grown attached to it. How do you begin to make the decision to sell it?

First and foremost, you need to know your reasons for selling. Perhaps, you started your own business, so you could take control of your life and call the shots. Maybe, it was to provide a better life for you or your family. If you are reaching retirement age, then you have probably made a full circle and came back to those initial reasons. Those same motivators can be the drivers behind your ultimate decision to develop a strategy so that you can exit your company.

You love your business, but you love your family too. Perhaps you feel it’s come time to refocus your time and energy on your personal life. That’s okay, and you have several options at your disposal. Balancing work life and home life can be a challenge. Don’t let your obligations to your business keep you from fulfilling your goals at home.

If the decision to sell is on the table, there are a few paths you can take. A partial sale of your business is one option. This option is intriguing if you aren’t sure if you are ready to leave your business entirely. Bringing in a strategic buyer for your business that can begin working alongside you and help your business grow to its full potential will give you more time for your personal goals, while still allowing you to stay involved in your business. You can take on a less rigorous role without having to step down completely.

Strategic buyers are looking for a synergistic partnership that will allow them to either expand their footprint within a particular market, or one that will give them the chance to break into a new industry. Your business will add value to a strategic buyer’s plans , so they will want to see success in your company. This means your incentives will be aligned and if your company isn’t successful, neither is theirs.

Another option is a sale with an eventual complete exit. A complete sale does not have to happen immediately. You can slowly transition out of your business over time. This is a good option if you want to retire and leave your business completely, but care about your employees and the legacy you’ve left behind after you are gone.   

A buyer who buys your business out right is called a financial buyer. Your business is an investment, and this buyer will need to have a management team in place, most likely your management team. If you want to make sure your business is going to be okay without you, it’s a good idea to transition with the business, so your employees can get acclimated to the changes as well.

Also, if your employees see your commitment and support to transitioning through the changes with them, it will help alleviate doubts they might be having about the sale themselves. When you decide to leave the business you love, you want to make sure you are leaving it in the right hands, and you want to make sure the employees who helped you build it are in good hands as well.

One thing you definitely should not do is tackle a sale on your own. If you are vested in focusing on selling your business and neglect your daily responsibilities within the business itself, you can potentially harm your business because your focus has shifted. Successfully completing a sale takes a great deal of time and understanding of the mergers and acquisitions transaction process. Patience is a virtue, and selling your business will take a little time, but with the right team in place, you can get maximum value for your company.

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Webinar Video: Now That the Valuation is Set, Here's Where You Will Win or Lose the Deal

 

 

M&A Webinar: Now that the Valuation is Set, Here’s Where You will Win or Lose the Deal

Many sellers think they have reached the finish line once the buyer has been selected or perhaps when the letter of intent is executed. Even those who know they haven’t reached that line often believe all key elements of the transaction have been ironed out and all that remains is the “technical” part. To better understand many of the material issues that remain open after the letter of intent is executed, this webinar will walk participants through a wide array of those open issues. 

  1. Stock versus asset deals, which is really better?
  2. Tax elections = dirty words
  3. Monetizing the real estate portion
  4. Protecting yourself with employment and consulting agreements
  5. Seller notes and earn outs – never say never
  6. Escrows, who needs them?
  7. Winning the net working capital fight
  8. Your indemnification of the acquirer
  9. How the disclosure schedules protect you
  10. Can reps and warranties insurance assist you?
  11. The inevitable non-competes
  12. Meet the Grim Reaper of your sale process- Delays

You can also watch it here on Vimeo:
https://vimeo.com/282908864

Hosted By:
Clinton Johnston
Managing Director
Benchmark International

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4 Things I Can Do to Replace Myself in my Business

As a business owner, you sacrifice a great deal of time and hard work to bring your business to success. As the business grows, your workload does too. You start in the front driving innovation and sales, then you end up in the shadows working on daily operational tasks, often obligatory, just to keep things afloat. You know you’re needed to keep the business running, but you want to make sure it continues to operate efficiently if you aren’t around.

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Life After Sale

There are a myriad of reasons why you might look to sell your company: retirement, further resources are required to grow, or it is an opportunistic time. Whatever the reason, this is likely to be the pinnacle of your career as the amount of time and money invested into your business will come to fruition when it sells, securing the future for you and your family.

But what happens after a sale? The business which you have invested years into, and the place where you spent the majority of your time, has passed on to somebody else. You may have made a tidy sum of money from the sale, which many people would be satisfied with as they may never have to work again and be able to live in the lap of luxury, but once the holiday of a lifetime has been taken, what then?

And what about how the company will thrive going forward? This is maybe something that you have grown from the beginning, and you want to see its continued success, as well as ensure the future of your employees who have been loyal to you.

At Benchmark International, we understand that there is life after the sale of a business and so structure a shareholder’s exit to suit both them, and the welfare of the company going forward.

The following are companies which Benchmark International has sold and structured the deal to allow for a successful life after a sale for both the shareholder(s) and the business.
ROC NORTHWEST

ROC Northwest had been established for nine years before the shareholders, Hilary and Glyn Waterhouse, decided to sell. They had built up a company which provided education, residential, and domiciliary care services to young people with emotional and behavioural difficulties, autism spectrum disorders, learning and physical disabilities, and those with challenging behaviour issues, from seven properties throughout the north west of the UK.

They had a vested interest in ensuring that the company was sold to the right acquirer, not just to ensure that the welfare of the young people in their care was maintained, but also to ensure that the staff that had been loyal to them remained in employment. As such, a large number of interested parties were presented to ROC Northwest and the shareholders were able to choose the acquirer which best fit their ideals. Commenting on the acquirer’s plans going forward, Glyn said:

“We actually sold the company to a firm called CareTech Holdings PLC. They wanted to keep our managers, they wanted to keep the staff, they wanted to keep the homes. In fact, they didn’t want to change anything about the business. It was very important because once you start a business from scratch, you want that business to succeed; you’ve got loyalty from your staff, and you want the staff to be in place and have their jobs, so it was very important that we found a buyer that followed that ethos and allowed us to continue the hard work that we were doing.”

The shareholders at ROC Northwest wished to sell the company as they were looking at other business opportunities and wanted to spend more time together as a family. As this was the case, Benchmark International negotiated a seven figure deal with the majority forming a cash payment on completion. Now, Hilary has been able to purchase an equine business and has a total of eleven horses, growing from two.

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Upcoming M&A Webinar: Now that the Valuation is Set, Here’s Where You will Win or Lose the Deal

July 26th @ 10am EST

Register Now >> http://bit.ly/2Nvampu 

Many sellers think they have reached the finish line once the buyer has been selected or perhaps when the letter of intent is executed. Even those who know they haven’t reached that line often believe all key elements of the transaction have been ironed out and all that remains is the “technical” part. To better understand many of the material issues that remain open after the letter of intent is executed, this webinar will walk participants through a wide array of those
open issues. 

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The Benefits of Choice in Formal M&A Process: Partnership Essentials

After an M&A deal has been concluded, it is unusual for the seller to depart a business immediately. Whether it is a short-term work out or a longer-term growth plan, invariably there will be is a period in which the buyer and seller will operate in partnership.

In all partnerships, be they personal or professional, the ability to achieve the outcomes and aspirations sought relies to some degree upon the compatibility of the individuals. Almost all studies on the essential components and attributes of successful partnerships, unsurprisingly, conclude that the dynamics of a partnership are determined by the same criteria as any relationship, namely, the personalities involved.

The reason for failed M&A transactions has been studied extensively by academics and professionals alike, but these studies contain little to no data comparing the success and failure rates of transactions concluded with the aid of a formal competitive M&A process and those without. However, common to almost all studies of failed M&A transactions, and often deep into the reports, are cursory references to cultural integrations, yet these are rarely addressed or understood during negotiations.

To truly understand whether the fundamentals for an effective and successful partnership exist in a new relationship is not simple, but it is an exercise that can be explored in the context of a process that exposes the business owner—the seller—to choice. It is a common misconception that the M&A processes only generate choices through the creation of price competition.

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The Drained Business Owner: How to Gain Your Start-Up Passion Back

Running a business is a romantic fantasy built on expectations of immediate gratification. People who venture on their own to start a new business are excited by the prospect of creating their own schedules and doing what they love. The hard work necessary; however, to build a business up and keep it running are often underestimated. Many business owners reach a point of burnout and lose their original passion. This is something that is hard to envision from the start because of the initial excitement.

As a business grows, the responsibilities of the owner often shift from doing what he set out to do: his passion, to doing behind-the-office tasks such as HR tasks, managerial tasks, dealing with legal issues, operational issues, etc. The more the business grows, the more the owner gets enveloped in these tasks. It can be disheartening to get separated from one’s passions, but how can one be reunited with the tasks he knows and loves?

If you feel you aren’t as close to your passions as you were before, there are some strategies you can implement into your business and your life to help you regain control of those passions and utilize them again.

 Take Some Regular Time for You

It is important to stay connected with yourself to maintain balance and obtain satisfaction in what you do. So, make time to do things you enjoy. Start a new hobby; start exercising regularly; watch a new movie; read a book. You need time for you and you need time to unwind and relax, so you can start each day with a fresh outlook. We have all heard the expression “you can’t pour from an empty cup.” It’s true. If you are not giving time to yourself and being mindful of your individual needs, you won’t perform your best in your business. Relaxation breeds innovation. A maxed-out body and mind cannot perform well. You will get burned out and your passion will dwindle.

 Set Boundaries, and Stick to Them

Work is just that: work. So, set specific time frames for work. This is related to needing time for yourself, but this is also related to having a set routine. Work stress can spill over into your life at home if you don’t set boundaries. Things run smoother when you separate your work life and your personal life. Consider not taking any work-related phone calls after a specific time, and decide a maximum number of hours you will dedicate to the business each weekend.

Be diligent in doing this and make it a priority. Odds are you won’t be any more useful to the business by forcing yourself to stay late and go on little-to-no sleep day in and day out. That will make you burnout even faster.

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Giving in Order to Receive

A recent article in the Harvard Business Review made a perhaps surprising conjecture: that as far as mergers and acquisitions are concerned, those companies that focus on what they’re going to get from an acquisition are less likely to succeed, in terms of the deal outcomes, than those companies that focus on what they can give to the process.

Acquiring companies being in ‘take’ mode was a dangerous place to be, it claimed. Indeed, corporate giants are not immune from this conundrum either, if we think about, for example, Microsoft and Google wanting to get into smartphone hardware in ‘taking’ from Nokia and Motorola respectively.

A buyer in ‘take’ mode means that the fortunate seller can increase price, especially if there is more than one potential buyer in the picture, and effectively remove the future value of the transaction. Buyers on the take, really knowing what they want, are also more prepared to pay top dollar – which, in and of itself, poses a problem in eventually getting a good return. But companies with a ‘getting’ focus also tend to lack adequate understanding of their new markets, making failure even more likely.

Having something to give to the deal, however, really benefits outcomes. This could mean anything that makes the acquired company more competitive in its market, and especially if the buyer is the only partner who can offer this new competitive edge.

The much-talked-about Harvard Business Review article listed four main ways that the ‘giving mode’ buyer can increase the competitiveness of the bought company and ultimately secure better outcomes on the deal:

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Upcoming Webinar: What to Expect When Selling Your Business

June 26th @ 11:00am EST
Register Now > http://bit.ly/2xZBVU8
 
Selling a business is perhaps the most complex exercise a business owner can undertake in their lifetime. Too often, attorneys, buyers, and others take for granted that the seller has an understanding of the steps, the risks, the timing, and the other aspects of the process. In this webinar we will lay out the key aspects of the sale process from start to finish in a format tailor-made for the uninitiated owner. This will be an entry level discussion requiring no prior deal experience, no legal background, and no knowledge of accounting.  Specifically: 
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What to do With Your Business to Make it More Appealing in Light of the Baby Boomers' Crisis

What options are there for you when looking to retire? The three main ones are to sell, pass the company down to family or to shut it down completely.

The latter may seem dramatic and not sound so appealing, especially after years of establishing a business and investing copious amounts of time and money into the venture. Unfortunately, for the baby boomer generation, it is increasingly likely that this could happen if a well thought-out succession plan is not implemented.

There is much speculation as to why there is a succession crisis – here are a few possible scenarios as to why this has happened:

THERE IS NO ONE IN PLACE TO TAKE OVER THE BUSINESS

The generation after baby boomers, Gen X (typically those born between the early 1960s and early 1980s) are not as numerous as their predecessors. The generation after, millennials (typically born between the early 1980s and the millennium) are generally not yet of an age to take over a business.

Read also: Inspiring the Millennial Generation

RAPID CHANGES IN AUTOMATION & TECHNOLOGY

Those Gen Xers and millennials who do want to start a business will not want to take over one they feel is antiquated. A lot of businesses now have an online offering, or machines to automate the process, and this is changing how business is done. As such, the younger generations may not want to go into a business in an industry that will not be around for
much longer.

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