Archive for category: General

There are times when we read an email and think, “I could explain this in just a few minutes instead of replying back with a long email.” Or you know that vocal tone and body language will help a message land properly, but can’t do that in an email. There are video messaging apps that can help. One of them is Loom.

What’s Loom?

Loom is a video messaging tool that helps you get messages out through instantly shareable videos. 

You can record your camera, microphone, and desktop simultaneously. Your recordings are then stored in the cloud with trackable views.

You can use web or app-based versions of the software to do the recordings and basic video editing tools are available to you if you want to trim a video for its best look and feel.

Why Use Video Messaging?

There are lots of use cases for video messaging, and the more you use it, the more possible uses you’ll discover in your own organization. Here are some ways you can use Loom and other similar apps:

• Video SOP — one of the reasons that SOPs don’t get written is because people are intimidated/discouraged by writing down a lot of text. But for whatever reason, people are less intimidated by having a video conversation. You can use Loom to create explanatory SOP videos what can help onboard new employees and provide a respository of knowledge in any position.
• Email reply — as noted above, it’s acceptable to reply to an email with a video message. In fact, customers will often be impressed that you recorded something for them, even though it may have taken you less time to do so than to write an email. Somehow recorded video conveys more “work.”
• Troubleshooting — when particular problems occur frequently enough that everyone in your office knows how to answer them for clients, it might be worthwhile to record a one-time video explaining how to solve the problem. Now your team will gain back future time by sending them this video (and others like it).

Interaction

One of the ways text messaging has evolved over time is allowing for reactions to individual messages. We can “thumbs up” a particular message without replying, allowing the party on the other end to see our thoughts without our having to write them. 

Loom also features this feedback feature on its videos. Users can react with emojis at any time during the video, and/or send direct email feedback on specific timestamps.

Those who like to speed up their videos can take comfort in the fact that Loom allows you to speed up (or slow down) the video to a speed of your choosing (within reason…10X isn’t available!).

Videos can also be password protected and Loom offers integrations with other tools like Slack to make access even easier.

Prefer phone calls to emailing? We’re here for you! Give us a call today to talk about how we can help you with a business transaction.

We’ve done a series of articles on general business questions that buyers will ask about the health of the business.  In Part 1, we asked, among other things, Why Sell?  In Part 2 we asked more granular questions, like the demographics of core customers.  In Part 3 we lead with a look back, asking what the seller would do differently with the knowledge he/she has now.

In this article we will look at questions that a buyer will consider when looking at the price you are listing the business for.  The answers to those questions will determine if he/she is willing to pay what you’re asking.

Capital Investment

What rate of return do I want?  Businesses, ultimately, are investments.  They probably don’t feel like investments the way that a stock portfolio or a 401k can, but they are.  In fact, they are often the most important investments of your life, in part because they offer a chance for outsized returns.  

A Main Street business buyer doesn’t normally have hedge fund expectations.  But that same buyer expects much more than one can get in traditional investments, in part because running a small business is significantly more risky than holding an index fund ETF.  Some might want a rate of return as low as 10%, some might not be willing to take the plunge for less than 20%.

Action item for seller’s diligence: Can I show a consistent rate of return on my own invested capital, or can I provide an estimate based on someone meeting my selling price?

How quickly do I want to repay my acquisition costs?  Buyers may have liquidated financial vehicles, borrowed from family and friends, or simply used their own savings if they don’t take out an SBA loan.  The buyer will need to calculate how long it will take them to pay back that outlay in relation to your asking price.

Action item for seller’s diligence: Have standard, accelerated, and best-case scenarios for repayment of acquisition costs based on your current cash flows, less any liabilities that the incoming buyer will not have.

Growth

How steady are sales and margins?  Here projections for new products and services will not be as useful as they are, at best, good estimates.  A buyer is going to look at your history over years.  Just as our buyers in the early teens used to look at how a business weathered 2008 and 2009, you better believe they will be paying attention to your 2020 and early 2021 numbers to see how your business weathered an unexpected global event.

Action item for seller’s diligence: Have your sales and margins charted year by year.  This is also a great internal auditing tool to share with your team to see if those numbers can’t be made better.

What are the biggest risks?  We’ve actually asked this question in other ways in our Questions for Buyers series, but this is more focused on financial risks.  For example, a buyer might consider the risk that a key employee will leave, but that may be less of an immediate financial risk than a key vendor going out of business.

Action item for seller’s diligence: Have some of the financial risks plotted out with your estimate of the likelihood it would happen, with the necessary consequences.

Sellers can sometimes get hung up on multiples and what they think they should get for their business and when you offer action items like we have above, they might resist doing them.  But what the most successful sellers know is that these are action items that not only telegraph the confidence a seller has in his/her or business, but pass that confidence on to the buyer as well.  This is why my number is my number is what the answers to these questions communicate.  The better your answer, the likelier a buyer will agree with your number.

Are you pondering what size business you can afford?  Or how much you want to sell your business for?  Our team can help you answer either of those questions.  Give us a call today!

Behind all our business broker listings, there is a business broker listing agreement. This spells out mutual responsibilities between us and our clients. As with any contract, this is something that deserves your undivided attention, as we’ve said many times before that a business transaction may be one of the most important events of your life. In this article we’ll discuss the various provisions of any given business broker listing agreement and what you should consider before signing one.

Why Have a Business Broker Listing Agreement?

The short answer? To protect you, your business, and your broker. Remember that ultimately, contracts are not there in case everything goes right, but in case even one thing goes wrong.

Key Elements of a Business Broker Listing Agreement

While every agreement may vary, these are the elements you must have for any serious agreement to list your business.

• Duration. This is the amount of time your business is listed for. As we’ve said in a previous article, selling a business can take between two months and two years.
  • Under twelve months: this is often pitched as offering more flexibility for the seller, but really, it puts undue pressure on a broker and as we’ll point out below, it may not really offer you the flexibility that it promises.
  • At least twelve months: this is pretty standard, as this recognizes that (and mentally prepares you for the fact that) this is a marathon, not a sprint.
  • Keep in mind that just because your engagement has passed doesn’t mean you won’t owe a commission to your broker. We keep records of everyone we introduce to a potential seller and if they conclude a transaction within a certain time period of the end of the engagement, a commission may still be owed. That’s why you need to be very clear on the details here, not just for your sake, but for your broker’s.
• Right to Sell. In this section you are going to give us the exclusive right to represent you in a business transaction. We’ve talked before about the sorts of things we do to market your business.
• Representation. Are you who you say you are? Do you actually own the assets you are purporting to sell?
• Protection/Indemnification Clause. Should anything go wrong during the transaction, this section addresses the legal and financial rights and obligations of all parties.
• Dispute Resolution Terms. Should significant problems arise during the transaction, how will these problems be cured? Will you use arbitration or litigation?  In which jurisdiction will the dispute be dealt with?
• Commission. This varies per broker and agency but here at Apex we settle this at closing.

We’re Here to Help

In a world in which we so often click past “terms and conditions” because we don’t want to bother to read them, it can be hard to sit down and work through a document like a business broker listing agreement. But you don’t have to do it alone! We’re here to help and are want you to be comfortable as you pursue a transaction. Give us a call today!

The COVID-19 epidemic has had far reaching consequences for businesses worldwide, some of which remain to be discovered. But when businesses were forced to close, commercial real estate took a big hit. As the lockdown continues and businesses adjust, a new normal has begun to take shape. This may shape the direction of commercial real estate and how companies work for a generations.

Pre-Covid

Before Covid-19, commercial real estate continued record year-on-year growth. With steady cash flows, it provided an attractive investment alternative for conservative investors to corporate debt. The returns were significantly higher, but with only slightly more risk.

While remote work had been steadily growing, it wasn’t growing at anywhere close to the demand for commercial real estate space. And remote work didn’t show any signs of hockey stick growth in the near future. There were companies that publicly stated seeing great value in their teams physically working together and had no interest in moving to remote work.

Changes

Needless to say, those companies who resisted remote work found themselves with no choices in the face of governmental orders. Overnight, people who had no idea that “Slack” was a software program or that “Zoom” was something you used to meet with others got acquainted with both of them, and many other programs.

Then days turned into weeks and many of those managers’ concerns turned into unexpected surprise. Their teams were perfectly capable of working online, despite having never done so before. It wasn’t perfect, and maybe it wouldn’t be a forever solution, but a line had been crossed that couldn’t be uncrossed.

This led to serious thoughts for business owners who routinely cut five and six figure monthly rent checks. Why pay for all this space if my team can effectively work from home? It left them free to rethink the future of their office space.

Post-Covid

One of those shifts in office space could be re-imagining it as a place for meeting clients and for occasional team meetings. There could be some dedicated shared space for various team members who still wish to come in to a separate office. For some companies, this wouldn’t necessarily change their footprint that much. For other companies, it would be game-changing. Freeing up revenue to spend on attracting customers or building products during a particularly challenging economic climate.

With a change in the footprint of their office space, there will need to be more acceptance of the culture of remote work and incorporation into how the company does business. No more painful minutes spent learning Zoom on the fly. There will be established systems and procedures that existing and new employees have to understand. And they will be trained to make sure that the new remote version of the company is as good or better than the pre-Covid version.

Instead of waiting for things to go “back to normal” (whatever that means) the best business owners are proactively managing the situation as it unfolds. They’re not content to be passive receivers of changes. They are dealing with the changing landscape with flexibility. They’re anticipating all that might come with the knowledge of what’s happened in first half of 2020.

Are you thinking about making changes to how your team works and how your office is configured? We know people who can help. Give us a call!

Some time ago, we noted that funds were going to be available for small businesses and in the intervening weeks the Paycheck Protection Program (PPP) story has developed significantly. We wanted to give you some updates, as well as encourage you to apply if you need to, as there is still money available after an originally botched launch.

First Round: $349 Billion

Government isn’t ordinarily known for efficient launches of large scale programs, so we shouldn’t have expected anything different in stressful circumstances. Some of the lowlights included:

• The funds ran out in 13 days.
• Many small businesses were only able to apply one week after the program opened.
• Some very large companies with significant financial resources, like Shake Shack, Ruth’s Chris, and you can’t make it up, the Los Angeles Lakers, received loans. After massive public backlash, they all returned the money, though we suspect that they wouldn’t have if no one had found out.

It was a banner day for the banks, who netted 10 billion dollars in fees alone, and all for underwriting SBA-guaranteed loans, which means almost no risk.

Second Round: $321 Billion

Alas, the website crashed the day the second pot of funding was made available. After enough complaints, banks with under $1B in assets were given some windows to apply (unsurprisingly, the largest banks had been getting preferential treatment). After the blowback from the first round, there are still some clouds hanging over this round of funding:

• Secretary Mnuchin noted that all loans over $2M will be audited, but didn’t say who would be doing that auditing. Banks? The SBA?
• Treasury did provide guidance on how loans could be forgiven:
  • Loan proceeds must cover payroll costs, mortgage interest, rent, and utility costs over the eight week period after the loan is made.
  • Employee and compensation levels must be maintained.
• But it didn’t give guidance as to how the retained portion of the loan would be categorized on a balance sheet.
• The IRS managed to mobilize in time to let us know that expenses normally deductible would not be so if they were used to trigger forgiveness of a loan.
• But the IRS hasn’t given guidance on how a forgiven loan amount will be dealt with either, but knowing the IRS, they won’t have our interests at heart.
• Thankfully a non-government agency, the American Institute of CPAs, has put together a helpful guide to help you track and calculate your path to PPP loan forgiveness.

There haven’t been the absurd cases (like the Lakers) in this round, but what seems to be clear is that without guidelines, loans are not merely being given for rescue. Some companies are taking the loans to fund growth. It could be argued that the intention of the funds was to rescue small businesses that were on the verge of going under, but there doesn’t seem to be restrictions in the funding policy requiring clear proof of that, and given the current business atmosphere, there doesn’t really seem to be a moral problem with making sure your business survives during a time which may be tough on many.

Our Recommendation

As of the time of this article, there’s still more than $100M available in funding. As we’ve said previously, our long-term outlook for the economy, not just in the US, but worldwide, is positive. We also think that political circumstances are such that decisions concerning the finer points we’ve highlighted above are likely to go the way of small business owners.

We encourage small business owners who think they could put this funding to good use, even if not in immediate danger of going out of business, to give their bankers a call to see if it makes sense to apply. If you’re one of the many business owners unhappy with their banking relationship, give us a call. We’ve got some solid names to share with you.