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Statistics show that there are more than 18 million family-owned businesses in the United States today. Naperville is home to many successful family-owned enterprises such as Russell Martin Carpets and Rugs.  

Through the years, Russell Martin has thrived because the founders have the drive, vision and experience to make it a success. In 1978, when Dave and Rae Martin purchased the carpet cleaning side of the business from Russell’s Cleaners, they not only started a new venture, but they were also starting their family. Sam was born in 1977 and Kate was born in 1978. Today, their children have active roles within the company. 

Owners who want their businesses to survive into the next generation must start succession planning early. A succession plan for a family-owned business is designed to lead to a smooth transition for the exiting business owner and the new owner, while maintaining the long-term viability of the business. But when a founder is solely focused on the present, he or she can fail to prepare the business for the future. That’s why 65 percent of family-run businesses fail when the founder has a health emergency, retires or dies without an identified successor. 

The first step towards successful succession planning is goal setting. Are you planning on keeping the business in the family or are you looking to sell the business? The Martins identified early that they wanted the business to remain in the family. If you decided to keep the business in the family, then communication and engagement of the next generation becomes critical. 

The Martins took the steps necessary to make sure their business continued to thrive by including their children in the business from a young age. Both Sam and Kate recall early experiences of working at rolling out carpets for cleaning and helping with the business.  Sam is now a certified master carpet cleaner, a master installer and repairman. Kate works behind the scenes handling marketing and accounting. She is also a certified carpet cleaner and a VAST Customer Service Specialist. 

After the goals have been identified, the next step in the succession planning process is developing the strategy to meet both the business and family transition needs. What are the operating, financial and leadership needs of the company to ensure a successful transition and long-term viability? What are the family or shareholder issues that need to be addressed? 

If succession planning starts years before retirement, business owners should work to build the successor’s job skills with education, mentoring programs or job rotations. Once a successor or successors are chosen, there should be an adequate transition period until a retirement date is set. 

Additionally, the Martins found that an informal Board of Directors made up of trusted advisors – in their case their banker and long-time accountant, have provided the hand-holding and mentoring that have allowed Sam and Kate to become more comfortable in their growing responsibilities at the company.   

Help the next generation understand what qualities set your business apart from the rest. Are there certain practices you follow with customers or employees? What are the integral qualities of your business reputation? Whatever your business fundamentals, put them into a business plan for your successors.  

The Martins understand their goals and have a strategy in place. While Dave and Rae are not looking to exit the company in the near future – succession planning at Russell Martin Carpets and Rugs is on the right track because the Martins started early and put a plan in place.  They have also passed on to their children, the high quality standards that set their company apart from the others – attention to detail, premier customer service and the trusted advisors they will need in the future. 

If you own a small business in the retail and/or service oriented sectors, you should know what a business cash advance is.  Being enlightened on the business cash advance can lift a heavy burden off your chest, as it could significantly improve your business.

Money

Money is very important to a small business owner.  Small business owners need money to get their businesses off the ground and to maintain their businesses and most small business owners hope to eventually turn a profit and make money.  Therefore, it should spark your interest when I inform you that a business cash advance is money for your business.

Fortunately, the business cash advance differs from the bank loan in certain ways.  For example, often when it comes to bank loans, you know the money’s out there, but the numerous, hard-to-meet requirements and lengthy processes make it almost impossible to get.

The business cash advance, however, is not hard to get.  Most providers only set forth a few simple requirements; the merchant must process a minimum of $3,500 in monthly credit card sales, the merchant must have owned his/her business for at least six months and the merchant must have at least one year remaining on the business lease.

After applying and being approved in as little as 48 hours, merchants usually receive their money in about seven business days.  At this time, the merchant is free to use the funds however he/she chooses, making it possible for a merchant to maintain his/her business, expand his/her business or just have some extra cash on hand for business expenses.

Mechanics

Understanding the mechanics of a business cash advance is very important, because as mentioned earlier, the business cash advance differs from a bank loan in various ways.  Unlike bank loan borrowers, merchants who choose to take advantage of the business cash advance do not have to make fixed monthly payments.  Instead, business cash advance repayments are automatically deducted whenever customers make credit card purchases.  When customers make these purchases, a small percentage of the sale goes toward repaying the advance.  This unique method allows payments to go with the flow of business and it allows small business owners to continue business as usual without worrying about making monthly payments, late fees, penalties, etc., because there are no penalties for early or late repayment.

The business cash advance is one of the best business funding options for merchants.  The process is simple and benefits are incredible.

Most businessmen sell a business only once or twice in their lifetime. Selling a business may be the most difficult task for a businessman who might have taken years to build a profitable and reputable business. When he puts it up for sale, he hopes to recover the price for all that he has put into it. Selling a business can be profitable decision or one that can result in the loss of one’s life’s work. It is advisable for businessmen to hire professionals for selling their business. If your business falls into the mid-market category and you aim to drive a strategic deal out of your sale, you will require an expert merger and acquisition advisor. But if your business belongs to the Main Street and you just want to get the best price for it, you might need a business broker. Below, we discuss some of the differences between the two professionals, which can help one decide whom to hire for selling a business.

• Type of Business
Business brokers specialize in what are called main street businesses, which could be in the range of $100,000 to 1,000,000 in revenues and include businesses like restaurants, dry cleaners, gas stations, convenience stores etc. M&A advisors usually take on businesses with larger turnover, like manufacturing units, technology firms, distributors etc. If the business to be sold is amongst main street businesses, the services of a business broker to sell the business would be appropriate, whereas if it is larger, then the services of a merger and acquisition advisor would be needed.

• Targeted Buyer
Business brokers target individual businessmen for selling a business, whereas M&A advisors are connected with corporate buyers, who seek a strategic reason behind a merger or an acquisition.
 
• Business Valuation
Business brokers generally apply “rule of the thumb” valuations for main street businesses to determine their selling price. Such valuations rarely vary. Merger and acquisition advisors are called in when there can be a broad interpretation of strategic value and rules of thumb do not apply. Large businesses generally have high components of niche services, intellectual properties, strong customer base etc, which make the strategic value for the business vary widely.

• Complexity of Transaction
Business brokers handle small businesses to sell and their clients consist of individuals. The process of selling the business is simpler as compared to larger corporations. Contracts for small businesses are straightforward and negotiations are based on the requirements of the seller, price and financing. For a merger and acquisition advisor, the target is a corporate buyer, who is an expert at M&A deals. Corporate buyers have different teams working for them like legal experts, investment bankers, valuation professionals etc. and their contracts are extremely complex. A corporate buyer sends in teams to conduct due diligence and examine the business to sell in detail. Hence if the business to sell is a large corporation, the seller will need a merger and acquisition advisor, who is equipped and experienced to negotiate with such pros.
 
• Volume of Clients
Business brokers represent as many businesses for sale as they can. For business brokers, it is a benefit to have many businesses listed with them when they are contacting individual buyers. Business brokers rely on mass email a campaign, posting on websites etc. and their attention is divided amongst many clients at one point of time. Merger and acquisition advisors, on the other hand, have an exclusive clientele of 3 to 4 clients per professional. With specific industry niches and a customized database of contacts, merger and acquisition advisors give their clients the personal and professional touch that they demand.

• Fees
Business brokers have a system of a minimum upfront fee plus around 10% of the transaction fee on completion of a successful deal. They do not charge monthly fees. Merger and acquisition advisors, on the other hand, charge a substantial upfront fee or a monthly fee in the range of $3000 to $10,000 per month. M&A advisors also charge a percentage of transaction value as fees on completion of the deal, which is decided on basis of the size of the business. Big Wall Street M&A companies are known to refuse transactions below $1 million in fees.

Based on the points made above, you can decide whether to hire a business broker or an M&A advisor for selling your business. The major deciding factor will be the cost that you are willing to incur. Keep in mind that if you have a small business to sell, it will not be able to sustain substantial upfront as well as monthly fees of the merger and acquisition advisor. Hence it would be better to go for a business broker. Go for a merger and acquisition advisor only if you need to sell a large corporation with high intellectual property and niche services.