Trying to buy a business right now is somewhat like bidding in an auction on the Internet.  You might win the bid but you are rarely sure you paid a fair price.  You are more likely to have “buyer’s remorse” because there is too much volatility.  You worry that tomorrow the item you bought today may sell for much less.  And, it may.

But the sage advice is to buy when the market is down.  You are told you will get a better price, a steal.  This is very short sighted.  A good seller is not looking for a buyer who wants a steal.  A good seller is looking for a buyer who wants a profitable deal.

So to buy well in this down economy, to buy from a good seller, look for well-run companies with bright futures and limited risk of early obsolescence.   Look for a company run by a family whose senior partner wants to retire.

Regard and respect that the senior partner may well have his or her entire retirement plan tied up in the valuation of the company.  Do your homework, do the due diligence, come to a realistic valuation of the assets, offer a fair price.  Don’t haggle, be fair.

When the seller sees that you respect their business and that you want to continue to grow it with economies-of-scale and good management, they will be open to what I think is the sensible approach to buying and selling in this down economy.

Agree together with the seller on a small down payment and an earn-out of the fair price of the assets.  Keep the earn-out tied to the continued success of the business.  Keep the seller available and interested in the ongoing success of the business.  Stage the payout over 5 to 7 years.

Structure the deal to allow an early pay-off of the seller if you hit the ball out of the park in the next few years.

Now is the time to buy businesses using the principles of fair pricing, small down, short earn-out and respect for all.
There are sellers who need to sell and there are younger buyers who want to buy.  What a wonderful time to hand the baton from one generation to the other.  Just don’t try to rip-off Grandpa.  If you start off with ill-gotten gains, you usually end up with well-earned losses.

Isn’t this a wonderful place to live!  You are free to succeed.

Brenda

Okay, so this is not about soup.  Well, actually, I love Miso soup especially the version my daughter-in-law makes.  It is my favorite soup.

 
This is about changing the world.  I recently learned about the abuse of young girls in parts of the world like Yemen.

 
I won’t drag you down by reciting the depressing details I learned.  In fact, I want to tell you one part of the story that actually will encourage you.  You see, it is against the law in many countries to marry off your young (read 7,8,9,10,11 year old) daughters.  But this does not stop the drunken men of these areas from doing just that.

 
Anyway, the story is about one little girl who actually stood up and said to the bigger, older, drunken men, “if you do this, I will report you to the police.”

 
The amazing thing is that this one little girl is still alive.  What made this little girl so unique?  How did she decide what to do?  Why did she do it?

 
MISO SOUP.  You see, she was MOTIVATED.  She wanted to change her world.  She did not want to be a child-bride to a drunken older man.  She did not want to be a “bride” of that kind at all.

 
She had INFORMATION.  You see, she is a child.  Someone, I imagine an older woman, told her that there was a law against pimping out your daughters in “marriage.”  So, she got the information and support she needed.

 
Now what she needed was OPPORTUNITY.  She waited until they were going to do this “marriage” thing to her and then she leveled the threat that she would rat them out.  They decided it was not worth it this time.

 
This little girl is in school getting the education she needs to continue to shed light in a very dark corner of the world.  She can do this because caring adults in her world gave her the INFORMATION and SUPPORT she needed.

 
So, here is my MISO soup formula for changing the world:  Find MOTIVATED people in situations they want out of.

 
Give them the INFORMATION they need in their situation.  Do they need to know about laws?  Do they need to know about the love of God?  Do they need to know that the whole world is not like their little ghetto?

Give them the SUPPORT they need to see it through.

Help them seek out and find the right OPPORTUNITY or just create the OPPORTUNITY yourself.

 
Notice that you can supply everything in this MISO soup formula except MOTIVATION.   Your job is to find motivated people, at work, at church, in the street who are already motivated.  Then, everything you do will fall on fertile ground.

 
There is nothing you can do to motivate another human being to change his or her world.  You can only supply information, opportunity and support.  You can lead the horse to the water but you can’t drink for him.  It is up to the horse, drink or die.

 
Motivated people are looking for information, opportunity and support.  When you get the knack of this, motivated people will find you.  They will recognize your wisdom, your honesty, your generosity, and your grace.

 
You can change the world, one little girl at a time!

 
Blessings,

Brenda

In the book “Walk the Talk” by Eric Harvey and Al Lucia on page 11 you will find the following statement:

“Words to live by are just words unless you live by them.”

On the surface we all think that we “get it”, that we understand that simple statement.  We think that it means something like, “good advice must be acted on to be of value.”

Actually, it doesn’t mean that at all.  What it means is that our stated values have not become personal values until we act out of them when it would be easier and more comfortable to act differently.

The trouble is that the folks around us see our actions and not our intentions.  Oh, the people who love us give us grace on our most selfish of days.  But the majority of folks have nothing to evaluate us by but what they see.

On page 34 of the same little book you will see the following:

“We judge ourselves mostly by our intentions, but others judge us mostly by our actions.”

At this point many folks think I am talking about being “nicey nicey” all the time, saccharine sweet and full of flattery.  Those manipulative behaviors are not of value to the giver and they rot in the gut of the receiver.

I am not talking about praising people for simply doing their jobs.  I am talking about not beating them up when they make mistakes.   In our company we value grace.  As a result of this value, we do not fire folks for making honest mistakes.  But beyond that, we do not beat them up the day after they make a single mistake.

Have you ever worked with or for a company that made it known to its employees what it took to get fired?  Yes, I said FIRED not HIRED.  In fact, if you are working with or for someone right now, do you know what it takes to get fired?

If you don’t know what can get you fired, I contend you do not know what that company truly values.  Most of the time a company acts out of its true values when it fires folks.

Frequently, firings occur when the values of the employee do not line up with the values of the company.  As the employee consistently acts out of his or her values the company builds a picture of the employee.  If the actions, not the intentions, of the employee do not reflect the values of the company, a separation will usually follow.

You see, when people see what we DO they usually infer INTENTION.  If what I am doing does not reflect my intentions, in other words, my values, then I should consider changing what I am doing.

So, back to our main point, “Words to live by are just words until you live by them.”  If our words to live by include words like faith, love, perseverance, peace and grace, no one will be able to see these in our lives when we allow ourselves to take up an offence, become resentful, and begin to get revenge.

Our words are just words until we are actually offended and choose to act on one of those words and not on other words like resentment, resistance and revenge.  Is it easy?  No.  Can it be done?  That is the whole point.

Grace and Peace,
Brenda

Some behaviors just don’t work anymore, if they ever did.

Recently, one of my staff was at a social event where a competitor began putting our firm down and saying how much bigger and more important he was.  (Which is not true, but he does not know that because we don’t market ourselves to our competitors…I never got a deal showing off to a room full of my competitors.)

This competitor has a reputation in our industry.  The sad thing is, he does not understand that we all see him for what he has become, a braggadocios dinosaur.

You see there was a time in the ancient past when “hard selling”, “hard charging”, “my dad can beat up your dad” behavior was considered the way to get it done in sales.

Have you noticed that no one likes that very much today?  Times have changed.  Bad mouthing your competition and “puffing” up your own value is just plain bad form.

I remember when one of my former bosses in sales criticized me for letting the customer talk during the sales presentation.  I listened to the customer and adjusted my presentation around what my customer was saying.

But my “hard charging” braggadocios manager just wanted me to pitch the can and move on.  He was definitely working from a hard-sale, non-consultative, dinosaur sales model.  He no longer has a job and I own my own firm.  So, you decide which model works best in the long run.

Consultative selling has nothing to do with “puffing” and everything to do with giving.  I enter into every selling moment with my prospect’s need foremost in my mind.  What do they actually need?  What will help them the most?  How can I befriend them and encourage them in the moments I have with them?

Life is short; you may only have a few moments to connect with this person and persuade them that you have their interests in mind.

When you think of your most satisfactory business relationships, they are usually with a sales person who listened to you, and demonstrated that they heard what you said but helped you get unstuck anyway.

It is still the sales person’s responsibility to sell but when you listen and respond to what your prospect is saying rather than pitch the pitch of how great you are, you will earn the right to consult with the prospect and turn that prospect into a client, a loyal client.

Gee, this all sounds like Servant Leadership.  It is.

So, go out and lead the way!  Your clients will love you forever.

Brenda

The news channels have all moved on.  They are on to the next big story.  Libya is hot; Japan is not.

That is the way it goes.  But for the 500,000 Japanese people living in shelters with no place to move on to…the story is still very urgent.  They have not moved on.  Not yet.  They are not a news bite.

Without help, most of them will struggle hard to move on.  But the amazing thing about being the “Family of God” is that they will have our help.  They are our family.

Are we the same race, the same religion, the same nationality?  Not likely.  But we are the same family.  This coming together and helping them rebuild their lives is what we would do if this happened to our sons, our daughters, our brothers and sisters.  And in fact, it did.

I have a very dear friend who is in her 60′s and has the retirement plan of God…that is to say she is totally dependent on God to provide for her when she retires.  So, recently she was inspired to give some money to a man of God whom she knew was in great need.  She gave.

Then she had those fearful thoughts that sometimes come when we give sacrificially.  She thought about her own needs, her nest egg that doesn’t grow and what would happen to her in her old age.

Fortunately, she could hear from God and remembered that it wasn’t the 10% that belongs to God but it is the 100% that belongs to God.  We don’t give because we are good.  We give because we are honest.  We understand that we are not to store up for ourselves here on earth but rather we are to be God’s bankers.

We are here to manage the redistribution of wealth to those in need.  This is neither the job nor the responsibility of the government.  This is our great privilege.  It is the service we render to each other.

Many years ago, God prompted me to give $200.  I knew that if I gave that $200 I would not have enough money to pay my rent and buy food.  I struggled with what I knew and what I believed.  I settled on what I believed and gave the $200.

You know what, we never missed a meal and the rent got paid.  How?  I am not really sure.  But we did not end up on the street begging for bread.

Our Pastors friends in Japan are actively gathering up survivors and relocating them to the Seminary outside of Tokyo.  There they receive food, clothing, shelter and hope.  They experience the love of family, the family God has provided to see them through this crisis.

With all of our help, they will be able to move on and they will take with them the memories of how “family members”, whom they never knew, reached out to them and helped them through.

God bless you for all that you are giving everywhere.

Brenda

We give through Lydia Ministries, PO Box 40572, Houston, TX 77240.  This is a 501 c (3) charity and you will receive a tax receipt for your gift.

Lydia Ministries sends 100% of your donations to the folks in need.  During this time all monies are going into meeting the needs of the people in Japan.

No one takes any salary and no one takes any administrative fees from what you give.  Every dollar goes to buy food, clothing, shelter, medicine, etc.

Friends and family,

Knowing When To Quit

We have all heard the folk wisdom that says, “You have to know when to quit…”

It made me remember raising his father and the tough choices his father made as a very young man.

You see, he played high school football.  Well, not exactly.  What he did was show up for every practice, work like a dog, get treated like a dog, go to every game and cheer for his team mates for four years.

I can count on my fingers the number of times he was actually on the field in a real game in the whole 4 years.  He could have quit.  I actually wanted him to quit.

Knowing When To Quit

I wanted more than for him to quit.  I wanted his coaches to be fired!  I wanted to march into that head coach’s office and give him a piece of my mind, a big piece.

But my son and I talked.  I asked if I could go see his coaches and he said, no.  I asked if he would just quit football and return to being 1st or 2nd chair on the French Horn.  He said, no.

I respected my son’s decision.  He went on to serve in the Air Force where he was physically, mentally and emotionally abused.  He was picked on and not valued.  But when his 4 years came to an end, he “re-upped.”  He didn’t quit.

Knowing When To Quit

Not only did he not quit but he was eventually given an official commendation for single handedly doing the work of 40 soldiers.  Yes, an official commendation!  He didn’t quit.

The reason I do not want my grandson to quit piano lessons isn’t because I want him to be a rock star or a concert pianist.  It is so that he won’t miss his opportunity to build his character beyond the slippery slope of “knowing when to quit.”

I want him to learn when NOT to quit.

We don’t have to be taught how to quit.  We don’t even need to receive permission to “take a break.”  What we need is the motivation and support NOT to quit.

Look around your world today.  Who do you see who is about to quit?  Share the truth with them that enduring trials produces perseverance; and perseverance produces character; and character produces hope.

Quitting doesn’t produce anything but free time.

We can learn a lot from fishermen.

Fishermen know certain things almost instinctively…

1.  They always have their lures and bait handy.

2.  They know what lines to use.

3.  They choose their fishing buddies carefully.

4.  They fish often.

5.  They like to fish.

Success in business is a lot like fishing…be ready, be useful, be careful, be persistent, HAVE FUN!

Happy fishing,

Brenda

Bob the Business Owner wants to retire. Problem is he cannot get a cash buyer for his company right now because of the stress in the economy.

Bob is a Boomer-Owner and he has built his company as his primary estate planning tool. He has believed for 20 years that his business would sell and provide him with a nice nest egg on which he and Mrs. Bob could live out their golden years.

Then along came 2008 and 2009 and 2010. Bob saw the appraised value of his residence drop by $200,000 and the value of his business fall so far that he cannot even get a valuation of it because there are no comparable sales of businesses in his area.

What is Bob to do? Well, traditional wisdom says that Bob has to keep working and forgo retirement temporarily or completely. Traditional wisdom says that Bob should plan to “die at his desk.”

But Bob has other issues. Bob has some health issues. Bob’s wife is a breast cancer survivor and Bob has been told to lower his stress (hypertension) and his cholesterol and to do it now. All this has just added to Bob’s stress and his cholesterol has risen to the occasion, as well.

What would you tell Bob to do? I told Bob to sell his company – but to stop looking for a cash transaction. There are buyers who can buy his company and they can run his company. They can keep Bob on as a consultant and they can pay for Bob’s company out of the profits of the company.

In other words, Bob would participate in the financing of the sale by taking a payout of the purchase price over time based on the continued success of the company. Bob can even negotiate health insurance continuation as a part of the package.

Bob will continue to work for the success of his company and he will be motivated to train and transition the new owner but Bob will not bear the burden of day-to-day operations. Bob’s free time will increase and his stress will decrease. His doctors should be pretty pleased.

Will Bob’s solution work for all the Boomer-Owners out there? No, it will not – but it will work for quite a few.

Are you a Boomer-Owner looking for an exit strategy that you thought you had 5 years ago but which seems to have vaporized in the last 3 years?

We can help you. We have buyers interested in looking at your company and making you a fair and honest offer to buy your company with an earn-out. We are not working through business listing brokers and want only to hear from business owners.

This is not a Wall Street solution. This is a Main Street solution where “We The People” put our heads and hearts together to deal with each other openly, honestly and fairly.

The deals our buyers want to see will be business-to-business companies, not retail or consumer-based. If you provide a product or service to good quality commercial customers, you may be a candidate for this very specialized purchase opportunity.

Interested?  Contact Eric at:  eric@americanprudentialcapital.com

Well, what follows is a concise explanation of the Tax Relief Act of 2010. We are providing this as a service courtesy of Kevin Chesser at Briggs and Veselka, CPA. He can be reached at 713.667.9147 for questions.

Income tax provisions that are new:
* 2% drop in 2011 social security taxes (from 6.2% to 4.2%) for all
employees and self-employed individuals.
* A two year “patch” for Alternative Minimum Tax (AMT) increases
the exemption amount from $45,000 to $72,450 for married filers.
This means fewer taxpayers will have to worry about the higher AMT tax.

Income tax provisions that are extended through 12/31/12:
(these would have expired on 12/31/10)
* Tax rates remain at a maximum of 35% (rather than increasing to 39.6%)
* Tax on qualified long-term capital gains remain at a maximum of 15%
(rather than increasing to 20%)
* Tax on qualified dividends remain at a maximum of 15% (rather than increasing to 39.6%)
* The Child Tax Credit remains at $1,000 per child (rather than dropping to $500)
* The amount of day care expenses eligible for the Dependent Care Credit will remain at $3,000 for one child and $6,000 for two or more children (rather than dropping to $2,400 and $4,800)
* The College Credit remains at a maximum of $2,500 per child/per year
(rather than dropping to $1,800)
* Itemized deductions and personal exemptions will remain fully deductible (rather than being reduced for higher income individuals)
* Coverdell Education Savings Accounts will remain available

Income tax provisions that are extended only through 12/31/11:
(these expired on 12/31/09. They are retroactively reinstated effective 1/1/10)
* The $250 above-the-line deduction for elementary and secondary school teachers
* The deduction for state and local general sales taxes
* The ability to make tax-free distributions of up to $100,000 from an IRA directly to a charity * Note….charitable transfers from IRAs that are made during January 2011 can be treated as if made during 2010.
Provisions to encourage businesses to invest in machinery and equipment:
* 100% bonus depreciation on new property acquired and placed in service
after Sept 8, 2010 through Dec 31, 2011
* 50% bonus depreciation on new property acquired and placed in service during 2012.
* Extending through 2012 the choice to accelerate the AMT credit in lieu of taking bonus depreciation
* For 2012, raising the maximum Section 179 expense amount to $125,000 (rather than dropping to $25,000) * Note…the Small Business Jobs Act (passed September 2010) temporarily increased the Section 179 expense amount to $500,000 for all of 2010 and 2011. Section 179 expense is available for both new and used property place in service
during the year. This differs from bonus depreciation which is
only available for new property.

Retroactive reinstatement of business tax breaks that expired in 2009
(These are extended through Dec 31, 2011)
* The Research Tax Credit
* The Work Opportunity Credit
* The 15-year writeoff for qualifying leasehold improvements, restaurant buildings and improvements, and retail improvements

Changes to Estate & Gift Taxes for 2010 – 2012:
* The estate tax is retroactively reinstated effective 1/1/10 with a $5 million exemption and a maximum estate tax of 35%. Additionally, heirs would receive a “stepped-up” basis on inherited assets. * Note…for individuals who die in 2010, an estate can elect to use the zero tax method. However, the heirs would have to use the less beneficial “carryover basis” rules on inherited assets.
* Starting in 2011, the $5 million exemption will be portable. Thus, if a married individual dies and doesn’t use all of his or her exemption, the unused portion can be used in the spouse’s estate.
* Starting in 2012, the $5 million exemption will be adjusted for inflation.
* Deadlines for filing an estate tax return, for paying estate taxes, for filing a basis-allocation return, and for making disclaimers are all extended until 9 months after this tax act is enacted.
* Starting in 2011, the $5 million exemption amount will apply to gifts and estate tax. Therefore, an individual may use up part of the $5 million exemption when gifting. The remaining balance will be used by the estate.
* Note…for 2010 only, the exemption amount for gifts remains
at $1 million
* The gift tax rate will remain at 35% in 2010, 2011, and 2012.

Courtesy of Briggs & Veselka, CPAs and business advisors
HOUSTON OFFICE ▪ 6575 West Loop South, Suite 700 ▪ Bellaire, Texas 77401 713.667.9147 Tel. ▪ 713.667.1697 Fax ▪ www.bvccpa.com