Don't be too busy to take time to plan for when the time comes to leave your business.   Taking that first step is often the hardest part.  It certainly is in the case of the business owner who has spent the better part of his or her life building a business and now faces the frightening prospect of finding a way to exit the business.  Painlessly. 

We hear most of the common objections as to why a business owner puts off the succession planning process.  They usually are:  

They are not sure what they should do to start or where to look for help  

The topics relating to the sale of the business are too private to discuss with others  

 So much time is spent putting out fires that little or no  time is left to focus on planning.   

The time is not right 

The mere thought of leaving the business is too daunting 

The owner is afraid of the future without the business so they do nothing. 

Any of this sound familiar?  Call us.  We can help. 

R.H. (Ron) Pope

Pope Estates Inc. (1962)

800 665 3099 

Business Intermediaries 

National Affiliate Business Brokers Network 

www.popemakesdeals.com 

When we borrow money we think of a loan as a liability.  The banker sees it as an asset.  We make a deposit to the bank thinking that the money on deposit is an asset.  The banker sees it as a liability.  No wonder we have trouble communicating with bankers when we need money.  We are not on the same page.  So if we want to borrow money from a banker we had better learn the banker's lingo otherwise we will leave the bank empty handed again.

Let's learn how to negotiate successfully with a banker or other lender by first understanding how they feel and how they talk.  Doing so will enhance our chances of getting that loan when we need the money to finance the rapid growth or breakthrough that the business is experiencing.

Bankers and lenders like to use ratios.  Banker talk.  So let's talk ratios.

Current Ratio measures the liquid assets available to meet all debts falling due within 365 days.  The higher the current ratio, the greater the ability of your business to pays its bills.  Hmm

Current Assets + Current Liabilities  = Current Ratio

Quick Ratio is similar to the current ratio, except that inventories are subtracted from assets before being divided by liabilities.

Current Assets -  Inventories + Current Liabilities = Quick Ratio

Average Collection Period Ratio tells how long your business  must wait to collect its receivables.

( Accounts & Notes Receivable x Days in Year) + Annual Credit Sales = Days

Debt to Equity Ratio is a barometer of the ratio of debt to  lenders and creditors as opposed to the invested capital of the owners. Kind of important....

There.  Now don't you feel better talking like a Banker talks?

© R.H. (Ron) Pope

Pope Estates Arizona Inc.

www.popemakesdeals.com

Looking for that right business is slow arduous and frustrating process that can make you and the dog a little crazy.  Doing so without professional help is like hunting with a good bird dog only to miss the bird when it it is flushed.  The saying "bad luck to a good hunting dog" comes from having your dog flush the prey only to have you completely miss the shot time and time again.  Each time you do the dog turns and looks at you with a look of disappointment and wonders why you missed.  Again...  Eventually the poor dog loses its enthusiasm for the hunt.

If you are seriously seeking the right place to put your money, the right business for you where you can go each day and where you can prosper and realize your dreams you need a good bird dog.  But you also need to shoot straight to hit the target.  Begin at the beginning by narrowing down the type of business that you would like to own and can afford.  Marshall your resources so you can raise the necessary equity capital and debt financing to buy the business and then look for a business intermediary who can with or without a buyer paid fee narrow down the search for you.  That intermediary will possess the skills and experience to show only those businesses that meet your criteria and will be able to create the working relationship with the seller or the seller's agent to obtain the items necessary for your due diligence.

Choose an intermediary with the internet connections to be able to 'trap' the type of business that you seek though search engine tools to filter out businesses of no interest.  Be good to the dog .  Shoot straight..

© R.H. (Ron) Pope

July, 2008

www.popemakesdeals.com

Good Ol' Porky Parkinson was one of those hard nosed veterans from the Second World War who just went back to work when he got out of the service.   Didn't miss a beat and didn't brag about his service  record or complain about the government not taking care of him.   Ol' Porky was a long distance truck driver who looked like Mr. five by five. Short, squat and powerfully built Porky was not what you would call pretty.   His favorite drink was a boiler maker which gives you some idea of the man.   Porky gave the appearance of a railway man with his railway type coveralls, big boots and boom style wallet hanging from his suspenders.   Wearing the crew cut style hair cut of the day Ol' Porky could be said to look ominous.  And he was.  He did not suffer fools lightly.

One night at the start of his evening run out of the city, an automobile driver followed Pork'y's 55' diesel tractor trailer rig along the highway with the headlights on high beam.  Now  ever truck driver knows that headlights on high beam shining on to the side mirrors of a rig can blind the truck driver.  Old Porky  proceeded along the highway with the offending automobile driver following closely behind with lights on high beam.  At a junction of the highway Porky solved the problem in his inimitable fashion.  Stopped for a red light, Porky clambered down from the rig with his tire hammer in hand and calmly walked back along the driver's side of the rig bouncing the hammer off the tractor and trailer tires as truckers do when checking for a flat.  At the rear of the trailer Porky stopped and fixed the driver with his typically icy stare.  Then in Porky fashion  he  ended the problem.  Passing the rear of the trailer Porky calmly tapped out each headlight of the car before walking back and climbing into the rig then driving off leaving a somewhat shaken automobile driver at the traffic light with no headlights only shattered glass on the roadway.

Good Ol' Porky!  Wish there were still some of you around.

© R.H. (Ron) Pope

July, 2008

www.popemakesdeals.com

The importance of having a fully functioning parachute when jumping out of a plane is obvious. During the Second World War the casualty rate amongst paratroopers in the 501st Parachute Infantry Battalion (PIB) dropped dramatically when the paratroopers were required to pack their own chutes.  Today, the recreational skydiver, as a rule, does not make a jump unless the parachute they are using is one they have chosen and packed themselves.   Pretty sound stuff.  There is no way for one to feel in control of a situation unless one really is in control.

The business owner is the type of person who very much wants to be in the ‘cat-bird seat’ while running his or her business.   When it comes to planning strategies to leave the business and transition control to a successor the business owner as a group has not  ‘packed their own chute’.  Less than 30% of business owners do so.  In some respects planning an exit strategy can be likened to jumping out of an aircraft.  It can be a frightening thing to do.  Faced with the daunting task most business owners take the easy way out.  They do nothing.  They don’t jump.

Can we help you pack your own chute?  Want to earn a Geronimo pocket patch like the PIB?  Mail to  http://www.popemakesdeals.com/content.php?pgID=83

Geronimo!

© R.H. (Ron) Pope

July, 2008

www.popemakesdeals.com