Keystone Business Ventures, Inc.

"The kids are going to take over" is not an exit plan. It's an idea but not a plan.

Just because businesses in your industry trade at certain multiples doesn't mean your business will too.

It's Tax Day! It's about this time when small business owners call us and tell us they want to sell their business and they hope we can get it done before they go on vacation in July. It may not be that fast, but Tax Day is a wonderful day to reflect on the status of your business, your ownership, and where you are going.

Lots of business owners want to sell when times are tough. This is completely understandable. The issue is that's when they are typically least desirable. The best time to sell is when times are good. But why would you want to get out when you are having a good time? #smallbusiness #successionplanning #kbvinc

Many highly successful entrepreneurs wish nothing more than to have their children take over the business one day. I strongly disagree with this. If the kid happens to also have the talent and passion to run a concrete, media, hotel development business, etc great. But what are the odds of that? Whether they realize it or not, it's common for parents to begin putting pressure on their children at a very young age. As they get older, a subtle hint here and there becomes a not-so-subtle, very high-pressure message like: "If you join the business, I will cover your student loans" "If you come back after college, I'll pay for your house" "While your 22-year-old friends do data entry for $80k, you'll be managing 5 people for $150k" Yes -- this happens all over the place, constantly. But what if the child cares little about business, and has a passion for teaching? When if they're a really talented computer programmer, and want to move to silicon valley instead of running an accounting firm in Omaha? What if their true passion is golf, or teaching yoga? Are parents taking away their kid's ability to create their own path in this life? That is quite a price for a kid to pay. My take on this with my son and daughter: They are going to be around the real estate business, but we are going to expose them to lots of different things, and support whatever their talents or passions are. If they really want to get into the business, I will not allow it until they're around 30. It's hard to be 22 and broke, and that easy path of "I'll just join dad" is not going to be an option for them. If after years of pursuing what they want to pursue: -they have a passion for the real estate business -they have the skills that would qualify them and maximize their chances of success Then we can have a conversation. I never want to feel like I was forcing my dreams upon them. I want to know that they had the choice to make out of this life whatever they wanted. I will not influence them by creating any financial incentive for them to try to gear their life towards doing what I do. I am setting up my life in a way that they will not end up entering the business If they do -- I will know that was their chosen path. Not a path I chose for them. Life's far too valuable for that.

I used Delve, a real estate tool integration on Google Earth, that uses AI to generate potential real estate opportunities and designs for given parameters that a user creates in Google Earth. Is it perfect? No. Did I use it correctly? Probably Not. Is it interesting? Yes. Below is a project I created on a group of parcels in Shamokin Dam, PA. Included is the retail square footage and solar estimate. #CRE #Retail #Delve #KBVINC

Rules of thumb for business valuation are fun. They are never accepted in a legal setting, but are also very often on par with the accepted values. The reason is they are averaged from business valuations that were completed using accepted methods (Asset, Market, and Income). They don’t often change either. Except for a few industries (VCR Repair, Typewriter Sales, etc.), the rules of thumb remain consistent. Rule of Thumb for Construction Companies: 20 to 25% of annual sales plus inventory 1 to 2 times Seller’s Discretionary Earnings 2 to 3 times EBITDA 1.5 times EBIT #rulesofthumb #smallbusiness #kbvinc

Small business owners, like many people, are very interested in reducing their tax payments. From accelerated depreciation to buying RVs, we have seen it all. When valuing a business this all needs to come out. During the normalization process, we have to remove these abnormal expenses to present the business to a potential buyer in a "normal" state with a normalized income. If you are considering selling a business, or your client is considering selling their business, consider how the tax strategy will affect the value of the business. #taxstrategy #valuation #smallbusiness #KBVINC