AXELROD BLOG

Legal Matters


1. Failure to Maintain Confidentiality

If you let the “cat out of the bag” too early it can be dangerous! If employees know that you are selling and changes are coming, they may quit or become less productive.Competitors may use this information as a selling tool against you. Vendors may not continue to extend you favorable terms. Make sure all potential buyers sign confidentiality agreements


2. Failure to Use Proper Negotiating Techniques

Poor negotiating techniques can cost you considerably in terms of selling price, terms and other opportunities. You shouldn’t have to be the “bad guy”, an intermediary can best negotiate for you. Many times, a deal will fail to close because of poor negotiation and communication skills between the parties. Pro-Athletes (most anyway) understand the importance of a skilled negotiator. Bottom line is you need one too. At Ronald J. Axelrod & Associates, P.C. we are highly respected for our negotiating skills. Let us help you through this most important step in selling your business.


3. Failure to Prepare for Proper Due Diligence

Due diligence issues are very important to the selling process. It is imperative to be prepared and organized. You must be able to defend and substantiate representations made during the selling process. Our firm can guide you through the due diligence jungle. If your records are still in the shoe box, you will probably not get the deal done!


4. Failure to Seek the Right Professional Assistance and Consultation

There are legal, financial, marketing and other vital considerations that must be addressed in the selling process. Many decisions in the selling process should not be made without the advice of the right professionals. The wrong professional can lead you to make bad decisions. Let us help you put together the right team.


Conclusion

It's best to leave selling your business in the hands of a professional. Ronald J. Axelrod & Associates in Rochester, NY, specializes in helping business owners with selling or purchasing businesses. Call Ron at (585) 203-1020 to set up an appointment.



We're all familiar with financial planning and estate planning. Financial planning helps you plan your affairs so you do not outlive your money and can enjoy your retirement without having to change your lifestyle. Estate planning allows you to control how your assets will be disposed of after your death. Unfortunately, most estate planning does not take into consideration helping you plan in the event that you become incapacitated. With one in four people over the age of 65 being affected by some sort of diminished capacity or dementia, incapacity planning is a must if you want to be in control of what happens to you and your money, if and when you become incapacitated.


Power of Attorney Misconception

You may be thinking, “Yes, but I have a Power of Attorney.” This is one of the great misunderstandings and shortcomings of most conventional estate planning. When you give someone a Power of Attorney, you have given them control over your assets, but you have not given them any guidance or a set of instructions on how you want your money spent if you become incapacitated. Except for fraud or self-dealing, there is little accountability on how your money will be spent. There is a better way to plan for a possible disability, but first a short story.



Quick Story…

The first time my wife and I went away on vacation and left two small children with a babysitter, my wife filled up two yellow pads with instructions for the sitter as to which child ate what, who the neighbors were, who the doctors were, phone numbers for parents, in-laws, when baseball practice was, etc. The other couple that we went away with said to their babysitter, “We’ll call you when we get there to make sure everyone is okay.” While both babysitters had the responsibility for two small children, only one had a set of instructions. Giving someone a Power of Attorney is tantamount to leaving your kids with a babysitter without any instructions. But there is a better way to plan than using a Power of Attorney – it is called a Living Trust.



The Solution: A Living Trust

A Living Trust is one of the most effective estate planning tools. Among other things, it will allow you to define when you are deemed to be incapacitated, who should control your assets, who should invest your assets, and how your money should be spent if you are incapacitated. In other words, by deciding today what you want to happen in the future, you will always be in control of your assets. The following are examples of how incapacity planning allows you to always stay in control.

  • A client’s Trust states that no matter how incapacitated she might be, she wanted to either go to Mass or have a priest visit with her once a week.

  • Another client’s Living Trust stated that she wanted her hair done once a week.

  • My favorite was the client whose trust described the cigars he wanted to smoke no matter how incapacitated he became.

A Living Trust will insure that your money will be used for the types purposes you wish, whatever they might be.


Conclusion

The beauty of this type of planning is that it is customized to fit your needs. If you are concerned or want more information about staying in control of your assets, even if you become disabled, please call estate planning attorney, Ron Axelrod at (585) 203-1020 to schedule a complimentary telephone conference.



What is the single most important day in a business owner’s life? Well, if you don’t count the day they started their business, it may be the day they sell their business. Deciding whether and when to sell a business, to whom, and for what price may be some of the toughest business decisions an owner will make. Being well prepared can help make the process less stressful and more profitable. Here are ten of the most common mistakes, and how you can avoid them:


1. Know What Your Business is Worth

The best way to protect your investment is to have a proper valuation of your business done by a qualified business valuation expert before talking to any potential buyers.

An experienced business attorney or business broker, as well as a Certified Public Accountant can also obtain a proper valuation.


2. Use a Business Broker

While in absolute dollars the fee paid to a business broker can be significant. But, in many cases, it is money well spent. A business broker will help you value your business, screen potential buyers, and expedite the closing process. Using a business broker may also help keep the sale of your business confidential. An experienced broker will have a list of potential buyers, which should result in a faster sale.


3. Proceed with Caution, Not Emotion

If you’ve been approached by someone who wants to buy your business, it may be flattering, but don’t be seduced into negotiations unless you are committed to selling and have made the necessary preparations. Think through these basic questions and write down your answers:

  • Is this the right time to sell?

  • Do you want to continue with the business after the sale?

  • Do you have the expert advisors you’ll need to help negotiate the sale?



4. Don't Say Too Much Too Soon

Keep your thoughts about selling the business confidential. News that you are contemplating a sale could prompt valued employees to pursue other employment, could harm your customer relationships, and could strengthen your competitor’s position in the marketplace. You’ll also want to avoid meeting the potential buyer(s) at your place of business. And, consider using a business lawyer, business broker, or other professional intermediary who can meet with the potential buyers off-site.


5. Avoid Unqualified Offers

Request and review the buyer’s financial statements and access to capital. It makes no sense wasting your valuable time and energy negotiating with a buyer who cannot finance the transaction. Also, learn about the potential buyer’s business acumen, management personality, and marketing support. Remember, a qualified buyer who can optimize your business opportunity will likely offer you the best value for your business.



6. Talk to More Than One Buyer

The only way to be satisfied that your business sold for its top market value is by negotiating with multiple buyers who represent different reasons to acquire your business.


7. Be Careful When Offering Your Business to a Competitor

In many instances, a competitor is your ideal buyer and this is why it is important to use a business broker. However, it is imperative to have a proper non-disclosure agreement signed at the earliest stage of the negotiations If the negotiations fail, the competitor can use your information to their advantage. DO NOT reveal: customers, suppliers, specific product margins, trade secrets, information about unprotected technologies, corporate or marketing strategies, or detailed balance sheets until you have a signed purchase agreement. A business attorney can draw up a non-disclosure agreement if you don’t have access to one.


8. Do Not Ignore Your Estate Plans

Your business is likely one of your most valuable assets. Selling it will have a tremendous impact on your estate. Before executing a sale, review your estate plan and consult with an estate planning attorney. There may be ways to structure the sale to further your estate planning objectives. At the very least, your plan may require revision after the sale to accommodate your newly liquidated assets.



9. Consult With Your Tax Advisor

Any sale of your business will have tax consequences. However, most transactions can be structured to give tax benefits to either the buyer or seller. Whoever receives which tax benefits is usually the result of negotiations between the parties and their advisors.


10. Use a Business Lawyer

These days, the practice of law is too complicated for any one lawyer (or perhaps law firm), to be all things to all people. If you are using a lawyer that isn’t familiar with the process of selling a business, you may leave money on the table, needlessly expose yourself to post closing liabilities, not close in a timely fashion, and incur additional legal fees.


CONCLUSION

If selling your business is in your future, the Law Offices of Ronald J. Axelrod & Associates should be one of the first items on your action plan. Ron Axelrod and his associates have been assisting business owners sell their businesses for many years. Your interests and protecting the investment that you’ve made in your business is our number one priority. Ron has been a business broker for over 10 years, which makes his services even more valuable. Give our office a call for more information to learn how to sell your business the right way. Call (585) 314-7100.


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