Selling Business – Above Fair Market Value

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Gino & Frank

Brian Weatherdon MA, CFP, CLU, CPCAAuthor, Speaker, Financial Planner.

Aligning your Wealth & Life to overcome fears andsecure your income, lifestyle, & comfort to age 105

Before hearing this story . . . .

• Continuing into these slides signifies you realize one person’s story cannot be representative of what everyone else should do. This story is personal and not in any way prescriptive for what you should do, nor for how your advisors may guide you.

•

• Stories in this wider series capture different approaches to value and decisions in business, pension, savings, and results for personal security, life income, and family estate.

• More information/insights at educational websitewww.GuaranteedIncome4Life.ca

• And 5-star rated book (Amazon, Kindle, bookstores)

“A Lifetime Of Wealth -- And How Not To Lose It”

“Business will never sell”

• “Why”, I asked the comptroller, who told me the business would never sell. “Because they want too much for it”, he replied.

• “How much should they likely get? And how much do they want?” I asked.

• “It could be worth $5Million he replied but they won’t sell for anything under $8M.”

Understanding their motivation

• Gino and Frank liked coming in to work; it was what they did every day. Easy to continue.

• Business was their private piggy bank: it paid personal expenses that after a sale would have to come from personal bank accounts.

• They’d never spend $8M but they wanted pride of sale, the pat-on-the-back in getting their price. ....or they wouldn’t let go!

Who else was in the picture?

• GM wanted to buy but wouldn’t offer what the older gentlemen were asking.

• GM was unmotivated to innovate product & enlarge markets as it wouldn’t help him buy.

• GM would only offer to purchase the company at a price based on Fair Market Value.

• However he could add a bit to the deal if it gave him control to own & accelerate growth.

Getting what everyone wants...

• Gino & Frank accepted $8Million offer: cash up front + two years consulting + preferred dividends + final payment to their estates.

• GM’s offer would pay cash from savings & bank loan (near 8%) + two years consulting income + dividends while Gino & Frank are living + $1.5 to each estate at their deaths (insured at a carrying cost near 5%).

Team to pull these pieces together

• Insurance / financial advisor discussing with each of these parties & moving forward to completion.

• Gino and Frank establishing their motivations, securing life income structure, and estate issues.

• GM establishing his interests and motivations, including relationship with commercial bank.

• Accounting firm and business attorneys settling and confirming agreed structure, and insurer approving insurance to guarantee payment to estates (and until then also insuring GM).

More on Exit Strategies for Business

• The website has a growing library of resources including video, podcast, articles, blogs, in addition to the learning modules in website and book.

• A next step and subscribe for more... “Exit Strategies for Business”

http://www.guaranteedincome4life.ca/blog/exit-strategies-for-business/

Assuring Life Income for Gino & Frank

• “Life Income Mandates” is a process to align wealth with the life you choose and creating perpetual, even increasing income. In addition Gino and Frank have the agreed consulting income and ongoing dividends.

• See more and subscribe for updates... “Life Income Mandates” http://www.guaranteedincome4life.ca/blog/life-income-mandates/

Resources to help get what you want

• Experience this website to help focus on your future: www.GuaranteedIncome4Life.ca

• Get 5-star book, Amazon/Kindle/bookstores: “A Lifetime Of Wealth – And How Not To Lose It” http://www.amazon.com/Lifetime-Wealth-how-not-lose/dp/1489579540/ref=sr_1_1?

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• Visit www.ALifetimeOfWealth.info