For nearly 40 years our focus has been to help private business owners create, grow and protect their private business wealth. We cannot say we have seen it all, but we have experienced a lot, in good times and in bad times. So, how can we help you? Call us to find out. There is no cost for calling to find out if we can help.
The following are a few examples of results our services helped achieve:
CFO Consulting Services – Example #1.
In the early 1980s, a construction business tax return client in Idaho was forced due to an economic slowdown to relocate business operations to Nevada. The construction business was owned and managed by a husband, his wife and son. At the time, the business’s volume was approximately $1.0M per year. The move required development of a new five-year business plan and negotiation of new bank financing relationships in Nevada. Because of its size, this business did not have resources sufficient to hire a CFO. We were called upon to fill that role for this business on a part-time basis.
The business owners and we developed a new five-year business plan and used that to successfully negotiate a new financing relationship. For the next 25 or so years, we met with management monthly to monitor and update its business plan and monthly financial reports, to assist in maintaining and changing its banking relationships, to supervise conversion of accounting software systems, to expand business operations into Arizona, to monitor and minimize its income tax burden, to assist in developing and maintaining incentive compensation plans for manager level employees, to develop and implement a transition of senior management responsibilities to a new generation of business managers, to create and support a demand-driven private equity market and to create and maintain an annual dividend paying culture. At its peak, the business had annual revenues of over $40.0M and annual dividend distributions exceeding $1.0M.
When the Nevada and Arizona construction economies collapsed in 2007, our role changed to assisting in development of several short-term downsizing business plans, supervising forbearance relationships with the Company’s banks and eventually liquidation of failing business operations.
Though not all of this experience was fun, we successfully helped our private business owners create, grow and protect their wealth through good times and bad.
CFO Consulting Services – Example #2.
In the early 1980s, a business tax return client came to me requesting assistance in purchasing a franchised truck dealership business that a friend of his managed. The dealership was owned by a publicly traded company. The two businessmen, successful operating their respective businesses, were not comfortable negotiating with professional negotiators and attorneys (the suits) employed by the seller. They also needed help setting and negotiating a fair price for the business and negotiating financing for the purchase with a local Idaho bank. We were successful assisting these two friends form a new business enterprise with proper buy-sell provisions to protect their respective equity interests, purchase the business at a fair price and establish a financing relationship for the new business with a local Idaho bank.
In subsequent years, we helped the younger owner purchase the interest of the older owner when the older wanted to retire and helped in valuing the business and settling a divorce of the younger owner. Recently, the surviving owner wanted to retired, so we helped him price the business, create a marketing package, create demand for the purchase with multiple purchase candidates and successfully negotiate the sale of the dealership to one of the developed candidates. The sale included capturing the dealership’s significant intangible value while respecting the franchisors’ rules for transferring the dealership.
Business Valuation Services.
In 2004, an attorney friend referred businessman to us who was getting a divorce. The businessman owned a 50% interest in a very successful private business. In accordance with Idaho law, non-controlling business interests can be valued considering discounts for lack of control and lack of marketability. We were successful in helping the attorney and businessman settle his divorce proceedings without a trial. The ending valuation included discounts for lack of control and lack of marketability that totaled approximately 40%.
Lost Profits Analysis – Example #1.
In the early 1980s, a dentist client suffered a heart attack that left him unable to work for approximately six months. The dentist had business interruption insurance. We assisted this client is develop and file a claim for lost business profits, so he and employees were protected during his recovery period.
Lost Profits Analysis – Example #2.
In 2007, an attorney requested our assistance in defending a claim for lost profits made against his publicly traded international client. The claim involved a product invented by our client who licensed another party to manufacture and market it. The other party was not successful and blamed failure on our client. We evaluated the claim and presented trial testimony to a jury in Federal Court that discredited the claim. In part due to our work, our client was 100% successful in avoiding the alleged liability claim and 100% successful in obtaining a judgment for its counter claim against the other party.
Lost Profits Analysis – Example #3.
In 2011, an attorney requested our assistance in defending a claim for lost profits made against an Idaho bank. The claim was made after the bank liquidated the business’s assets, which were collateral for loans that the business was not able to repay in accordance with terms originally negotiated with the bank. We evaluated the claim and presented trial testimony to a jury in Idaho State Court that discredited the claim. In part due to our work, our client was 100% successful in avoiding the alleged liability claim.
True Corporate Model™ Services.
For the past 20 years, we have successfully helped many private business owners create and support demand-driven private equity markets for their businesses using the True Corporate Model™ concepts. This service helps private business owners reduce risk while increasing the value and cash dividends associated with owning their private business interests. This service creates a market that is an alternative to selling the private business to an unrelated third party or to liquidating the business to fund a private business owner’s retirement. To support demand for this service we created a network of CPAs and business valuation professionals trained to provide this service throughout the United States.
For more information on this service, please visit the website for the TCM Consulting Network™ by clicking here.