Corporate Finance in Atlantic Canada

Commentary on corporate finance issues for small- & mid-market private companies in Atlantic Canada

Archive for May 2015

Business Transition — Create the Choice

leave a comment »

https://www.businesstransitionsimplified.com/business-transition-create-the-choice/

Good article from BDO’s Grant Robinson on business transition.

My favourite part:

In my experience entrepreneurs should be looking at setting up their business so they have a choice to sell when they want and to whom they want. I am a believer in the philosophy that you will sell your business one day, either involuntarily or voluntarily and no matter what the trigger, you will either sell inside the business or family or to an outside private equity or strategic buyer. If you have prepared the business to be salable to the outside that enhances your ability to sell inside; if you have prepared the business to sell inside it enhances your ability to sell outside. Whatever your focus, the key is to prepare it for sale.

Written by Dan Jennings

May 19, 2015 at 3:02 pm

Family Business Paradox – Do you want fair or equal?

leave a comment »

http://www.bdo.ca/en/Library/Services/business-transition/pages/Family-Business-Paradox.aspx

Check out this BDO article on some of the challenges particularly unique to family businesses.  I like this paragraph on “fair versus equal” — some folks actually think this is how the “pot” should be divided!

If a father loves his children equally should he not treat them exactly the same in all matters? Does that mean everyone who works in the business is paid the same or that all children receive equal shares in the family business? If fair means equal then all family members working in the family business would be paid equally regardless of their skills and market value. If fair means equal then each child would inherit the same amount of wealth or shares of the business in their parents’ wills.

If fair is not necessarily equal then children who are given or left shares of the family business could end up receiving a much higher proportion of the family wealth than their siblings. If fair is not equal some children would receive a higher payout based on their employment value rather than on their gender or birth order.

Written by Dan Jennings

May 1, 2015 at 5:33 pm