Getting Clarity in Buy-Sell Agreements

Any business with multiple owners should have a buy-sell agreement in place.  Buy-sell agreements are entered into between the co-owners of a business to direct what should happen when an owner leaves the company.  A typical agreement covers such issues as who can buy the ownership interest, what triggers a buyout, what price will be …

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Calculations vs. Appraisal Opinion in Business Valuation for Marital Dissolutions

There has been much discussion in the valuation community regarding whether a calculation engagement (i.e., a calculation of value of a business) can be used in a marital dissolution in Arizona (and other jurisdictions) and whether a “calculation report” is appropriate in that context. Currently there is little guidance on this matter in Arizona. Should …

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My company is only worth what?

More often than not, when a small business owner looks at the value of their business determined by a business appraiser, they are in total shock at the concluded value. Sometimes they are pleasantly surprised by a value higher than expected. Other times they insist their company is worth much more than the appraiser has …

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Are There Benefits of Using Templates in Business Valuations?

Using templates in business valuation is key to producing a quality report.  Most if not all valuation analysts use templates to create and write their reports and many of those templates consist of Word and Excel files that are linked together. Benefits from using templates There are many reasons to use templates to help prepare …

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What Can the Site Visit Tell Me That’s Not Already in the Numbers?

One of the most important parts of a good business valuation is viewing the facilities in which a company operates and speaking at length with those most involved in the management of the business.  The primary objective of the site visit is to gain a broader perspective of the business and its operations and identify …

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No appraisal, no charitable deduction

IRS regs require taxpayer to hire a qualified appraiser when making a charitable contribution The IRS appears to be examining charitable contributions more closely in recent years, paying careful attention as to whether the donor has properly dotted all i’s and crossed all t’s. In the case of Mohamed v. Commissioner, T.C. Memo 2012-152, Joseph …

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Can I Trust My Employees?

“I’m not upset that you lied to me, I’m upset that from now on I can’t believe you” – Friedrich Nietzsche Although trust is a significant factor when maintaining good relationships with your employees, it can be misplaced or abused.   In fact, statistics reveal that acts of embezzlement and theft are frequently committed by trusted …

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Incentive Based Compensation – Pay for Performance

Pay for performance can mean different things to different people.  Should the pay reflect past performance or should it reward for future performance?  Is the compensation meant to be for short-term purposes or long-term purposes?  This is a hotly contested issue and should be resolved based on the employee’s job function and the goals of …

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Income Statements in Real Estate Appraisals and Business Appraisals

When reading business and real estate appraisals, one should recognize that a business appraiser and real estate appraiser do not rely on the same items of income and expenses when determining market value.  For example, when valuing an LLC that owns a multi-tenant office building, the real estate appraisal only considers income and expenses directly …

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