Archive for Michael Gilburd

Business Valuation, Growing Value And Liquidity Realization (Part XXIII Of eBook Series)

Business Valuation, Growing Value And Liquidity Realization (Part XXIII Of eBook Series)

(This is a continuation of a series on Business Valuations)

Phase VIII – Due Diligence DVD – presents a digital versatile disc or memory stick that contains certain underlying information, setting forth the disclosures made by the company. A Trusted Business Advisor shall vet the contents to make it appropriate for a Transaction, but not engage in the verification of any information provided by the Client. This facilitates a prospective investor’s decision-making process and minimizes costs, as the credible backup validates the investment opportunity.

Phase IX – Business Continuity Plan (BCP)

Business Continuity has two goals: (1) business as usual during strategic planning or a capital markets transaction, and (2) disaster recovery planning. Both include creating a working BCP; including Step-By-Step Business Impact Analysis, Risk Assessment, and more.

• Assures that significant disruptive incidents can interrupt its normal business operations. If the company has a high level of dependency upon its automated systems and processes and this creates risks that need to be mitigated.
• Recognizes that the company the needs to recover from disruptive incidents are made as quickly as possible and that this necessity to ensure a speedy restoration of services requires a significant level of advance planning and preparation.
• Assists the company in managing a serious disruptive crisis in a controlled and structured manner. The BCP contains information on emergency contact details, strategies to mitigate impact, procedures to be implemented and communication processes to be followed in response to a serious disruptive event. Major points addressed in the BCP are detailed below.

• Plans for a major disruption where equipment and communication infrastructure are available to continue the business of the company.
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Complimentary Webinar Today – Thursday July 23 2020 – Receive Complimentary Tool Kit To Grow Your Tax Clients

Michael Gilburd

You are invited to a complimentary webinar TODAY Thursday, July 23 at 10:00AM PT/1:00PM ET. As business owners and financial advisors who want to thrive in this environment, you will gain a solid foundation and methodology for building a more valuable company.

Learn how to monetize your clients/practice.
Learn how to find and grow ideal clients.
Learn how to optimize value for your clients.

All attendees will receive a complimentary Tool Kit that you can use the day after the webinar to assist you in helping current and future clients.

REGISTER FOR THIS COMPLIMENTARY WEBINAR NOW!

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Complimentary Webinar: The Three Sides To Success: 3 Ways To Create Value For Clients

Complimentary Webinar, Thursday July 23, 2020

You are invited to a complimentary webinar on Thursday, July 23 at 10:00AM PT/1:00PM ET. As business owners and financial advisors who want to thrive in this environment, you will gain a solid foundation and methodology for building a more valuable company.

Learn how to monetize your clients/practice.
Learn how to find and grow ideal clients.
Learn how to optimize value for your clients.

All attendees will receive a complimentary Tool Kit that you can use the day after the webinar to assist you in helping current and future clients.

REGISTER FOR THIS COMPLIMENTARY WEBINAR NOW!

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Business Valuation, Growing Value And Liquidity Realization (Part XXII Of eBook Series)

Business Valuation, Growing Value And Liquidity Realization (Part XXII Of eBook Series)

Phase VI – Capital Markets Alternatives

Deal Ratings. All deals receive a score, which is aligned to how a financier assesses acceptable minimum scores to finance a deal. A properly prepared CMA scores all sources of capital pools under the same system to remove any subjectivity.

What a Score will look like:

Deal Ratings
Deal Ratings

If you have a B Grade Deal and are unwilling to take the necessary steps to upgrade to a higher score, then you should lower your expectations about completing a transaction, because there are fewer capital sources willing to accept B Grade Deals. Typically, if a B Grade Deal is accepted, the costs are much higher than an A Grade Deal. If your rating is below a B- Grade Deal and you’re not willing to do what is necessary to move up to at least a B- Grade, then it is highly unlikely you will complete your transaction.

Business Valuation Category
Business Valuation Category

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Business Valuation, Growing Value And Liquidity Realization (Part XXI Of eBook Series)

Business Valuation, Growing Value And Liquidity Realization (Part XXIII Of eBook Series)

Phase V – Adding Value

Value Drivers Improve Corporate Value – important factors that determine or cause an increase in value of a business, as viewed by investors.
• Different factors drive and impact the values of businesses.
• These are value drivers that make a business more or less attractive to lenders, buyers, and investors.
• Addressing those value drivers is important in distinguishing the value of the subject business from its counterparts in its industry.

Bottom line – your value drivers integrated into an interactive high-touch approach result in greater value.

• Value drivers help you focus on the value habit by aligning performance measures:
 Human Resources and Organization − Talent & Quality of Management
 Sales and Marketing & Innovation − Customer Retention – Quality of Products & Services
 Financial Soundness − Ability to Finance the Plan
 Physical Assets and Systems/Administration − Available to achieve the Plan
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Business Valuation, Growing Value And Liquidity Realization (Part XXII Of eBook Series)

Business Valuation, Growing Value And Liquidity Realization (Part XXII Of eBook Series)

Phase I – Comprehensive Business Review (CBR)

Foundation Documents

1. Financial Projections and Pro Forma Financial Statements – presents 4-year integrated prospective income statements, balance sheets and cash flows, based on comprehensive assumptions developed by a Trusted Business Advisor and the company, using an “other comprehensive basis of accounting” (OCBOA), and providing assurance that the use of proceeds is sufficient to achieve the company’s goals.

2. Valuation Opinion and Intellectual Property Appraisal – determines the fair market value of the entire enterprise (100%) and minority interests. The objective is to express an unambiguous opinion as to the value of the company, which opinion is set forth in a Report that is supported by all procedures that a Trusted Business Advisor deems to be relevant to the valuation, and thereby validates the worth of the entity.
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Business Valuation, Growing Value And Liquidity Realization (Part XXI Of Book Series)

Business Valuation, Growing Value And Liquidity Realization (Part XXI Of Book Series)

Strategic Planning for Value Growth™ – by aligning individual, organizational, and cross-departmental initiatives to identify and improve processes for meeting customer and shareholder objectives.

The best approach is to express your vision and strategy of your organization as a set of:

• Goals and their associated objectives,
• Measures,
• Projected values, and
• Initiatives.

A strategic planning and management system:

• Aligns business activities to the vision and strategy of the company’s management,
• Improves internal and external communications, and
• Monitors organizational performance against strategic goals and objectives.
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Business Valuation, Growing Value And Liquidity Realization (Part XX Of Book Series)

Michael Gilburd - Business Valuation Series

Comprehensive Business Review – A Trusted Business Advisor can help you author, design and develop a very clear Business Plan that meets the requirements of a sophisticated audience.

Generally, less is more – the shorter the better. The challenge is to determine how much to emphasize each section, how they interrelate, and how to show your plan as a compelling story.

What to expect:

By using this proven Capital Markets Sourcing Document, you should properly address:

Company Profile
● Business description – summary
● Unique attributes – trends and opportunities
● Deal potential
● Exit / liquidity event
● Investment highlights – loan or investment request
● Collateral
● Use of proceeds
● Financial data – historical and prospective
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Business Valuation, Growing Value And Liquidity Realization (Part XIX Of Book Series)

MICHAEL GILBURD

Transfer Pricing – the practice of charging prices for the supply of goods or services to a related entity (usually wholly owned) in such a way as to repatriate profits or affect tax or duty bills in your favor.

Generally, international transfer pricing and tax planning experience has been obtained from working for major financial institutions while assigned to large multinational corporations.

You can rely on a credible transfer pricing study for the following:

• The U.S. transfer pricing regulations, under IRS §482 of the Internal Revenue Code, require that inter-company transactions be priced under the same terms that would have existed had the transactions taken place between unrelated entities. Similar regulations now exist in virtually every developed nation around the world.

• Any business entity operating in more than one country likely has inter-company transactions involving the exchange of tangible property, intangible property or services.

The Importance of Transfer Pricing
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Business Valuation, Growing Value And Liquidity Realization (Part XVIII Of Book Series)

Gifting Life Insurance

Gifting Life Insurance to Charity Generates Cash

Benefits
Life insurance is an excellent tool for making charitable gifts for a number of reasons.
• Life insurance provides an “amplified” gift that enables you to purchase immortality on an installment plan.
• Through a relatively small annual cost (the premium), a benefit far in excess of what would otherwise be possible can be provided for charity.
• This sizeable gift can be made without impairing or diluting the control of a family business or other investments.
• Assets earmarked for family members can be kept intact.

For example, a 50-year old committed to giving $5,000 annually for 10 years could leverage the $50,000 gift into a $360,000 gift. A second-to-die, or survivor life policy, adds even more leverage. A 50-year old couple could make a gift of $800,000 with the same $5,000 annual commitment. (Assumes 50-year old(s), preferred non-smoker(s) using variable life policy earning 10% gross return.)

Using a traditional permanent life insurance contract will generally yield a 6% to 7% internal rate of return to life expectancy on premiums paid.
Life insurance can be a self-completing gift. For a donor committed to making annual gifts, a portion of the annual gift can be directed to an insurance policy guaranteeing the continuation of that gift in perpetuity. If the donor becomes disabled, the policy can remain in force through the “waiver of premium” feature (if elected). This guarantees the ultimate death benefit to the charity and, in some cases, the same cash values and dividend build-up that would have been earned had disability not occurred. Even if the donor dies after only a few premium payments, the charity is assured a full gift. The death proceeds can be received by the designated charity, free of federal income and estate taxes, probate, and administrative costs, and without any delay, fees, or transfer costs.
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Business Valuation, Growing Value And Liquidity Realization (Part XVII Of Book Series)

Valuation: Business Owner Charitable Opportunity

Appreciated holdings for more than one year: If you own a company, whether in the form of C corporation stock or subchapter S stock, or a large block of public stock (free-trading or restricted), these stocks probably have appreciated and have been held by you for more than one year.

Short-term holdings: It is generally inadvisable to give charity securities in which your capital gain is short-term (i.e., securities that you have owned for less than 12 months). In such cases, the deduction will be for the cost basis of the securities, not the current market value.

Securities with a built-in loss: Rather than give a charity property in which you have a capital loss, you should sell them, establish a deductible capital loss, and then contribute the proceeds to the charity.

Contribution is made by a partnership or S corporation: If the noncash contribution is made by a partnership or S corporation, the reporting requirements are applied at the partnership or S corporation level, except that charitable deductions at the partner or shareholder level require compliance with the reporting requirements by the partnership or S Corporation.
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Business Valuation, Growing Value And Liquidity Realization (Part XVI Of Book Series)

Business Valuation, Growing Value And Liquidity Realization (Part XVI Of Book Series)-Michael Gilburd

Economic Analysis of Damages – valuation and economic expertise is used for damage analysis and expert testimony to provide an opinion as to losses. Experts opine and testify in the following areas:

Lost Business Profits Analysis

• Total Business Loss
 Forced Market Exit/Shutdown
 Exclusion from Market Entry
 Loss of Business Opportunity
 Partial or Temporary Business Loss
 Product or Service Line Loss
 Business Decline
 Business Interruption
 Delay in Market Entry
 Diminished Robustness of Market Entry/Growth

Other Economic Analyses Pertaining to Damages

• Fair Market Price or Value
• Going Concern Value
• Loss of Reasonable Royalties
• Unjust Enrichment
• Loss of Product, Goods in Process, or Raw Materials
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