Wealth Management

Voted #6 on Top 100 Family Business influencer on Wealth, Legacy, Finance and Investments: Jacoline Loewen My Amazon Authors' page Twitter:@ jacolineloewen Linkedin: Jacoline Loewen Profile

June 26, 2017

Selling your business? Can you avoid these 5 pitfalls?

Selling a business is harder than buying one. During the long process of selling, with the buyer kicking the tires in interest, the seller may find it hard to resist dropping the price as flaws and shortcomings become magnified. But whether the owners are keen to sell or not, their top concern will be to get the best price. Failing to get maximum valuation can occur for those owners taking on too much of the process themselves.
Why are prices adjusted downwards during a sales process? Here are a few common reasons about why sellers may get a less than top valuation:

1. My time is limited. Owners who have sold their businesses often complain about how long the process can take, and how it takes time away not only from customers, but from helping their teams keep operations running smoothly.
Gordon Forsythe, president of Compass Capital Corp. and buyer of companies, emphasizes the importance of knowing what you’re getting into. “Ideally, it would be beneficial for individuals who are considering selling their companies to understand how disruptive the sales process is to the day-to-day operation of their business,” he says. “The sales process typically becomes an all-consuming effort and unfortunately diverts attention and focus that is required to effectively operate the business.”

2. I am the smartest guy in the room. The mergers and acquisitions process is not something typical owners have done before, or if they have, it’s not their expertise. Owners often fall into the trap of thinking they are the best person to sell their businesses when in fact they should be focused on continuing to run the business.
Sure enough, they usually are the smartest guy in the room and could do whatever they want to achieve. For example, these capable entrepreneurs could fix their own dental cavity but why not get a true expert, the dentist? After all, dentists have trained and spent their career taking care of patients' teeth. It is the same for transition of the business. Find the experts and put your time into what matters more.

A mismanaged sale can have several ramifications, says Mr. Forsythe. “If employees begin to fear for their positions, they may retreat into self-preservation mode, and negatively affect the productivity and direction of the company. Likewise, clients may see this as an opportunity to re-evaluate their relationship with the company and look for alternative suppliers. If the purchase fails to transpire, the company may have wasted considerable resources, which would have been better spent growing the business.”
3. Let’s sell the whole thing. Sellers who investigate whether parts of their businesses could be carved out of the core and sold separately are sometimes able to spin off a division. They can take this additional capital and re-invest it into a growth strategy or use the liquidity to pay out a family member, partner or shareholder, for example, who wants out of the business. There’s no need go with the ‘all or nothing’ sales strategy.

4. A bird in the hand. Along comes a large, brand name company that wants to buy the business. If the first thing that comes to mind is “here’s a good offer, might as well take it as I may not get something like it in the future,” think again. When the seller chooses to go through the courtship process without lining up a range of alternative suitors, there’s the increased risk of falling in love with the prestige of the impressive big brand name and accepting an undervalued sale price as a result.

5. They should be happy to get us. Every owner thinks that his or her business is unique, and the relationships built with customers and suppliers are special. And though this may be true, the buyer may not feel the same way. Watch out for attitude during a sale, and exercise humility.

Due diligence isn’t just for buyers. Smart owners should hire their own corporate finance experts to eliminate surprises that could reduce the sales price. The seller can then be reassured that their house is in order and their strongest features and assets are put forward.

This article first appeared as a column - Special to The Globe and Mail
Jacoline Loewen is a director at UBS Bank (Canada), Wealth Management. She focuses on transitions for family businesses and closely held small to medium-sized enterprises, as they sell and move from being business owners to being managers of their wealth.

You can follow her on Twitter @jacolineloewen.


June 8, 2017

Sustainable Investing delivers winning stock portfolio over long term

Jacoline Loewen, Sustainable Investing, Vancouver, 2017
In Vancouver, presenting on Sustainable Investing. Thank you to the Swiss Consulate for hosting us at the official residence of the Swiss Confederation. Great event.

The thesis is that sustainable business practices can be much more than a cost, a good deed, or good public relations for businesses—it can be a source of competitive advantage. In his 35 years in the investment industry, Bruno has experienced that picking sustainable companies for investing does not mean forgoing a higher return.  

Bruno runs the Global Sustainable Fund which brings a way to look at the relationship between business and society that does not treat corporate profits and societal well-being (including sustainability) as just a balancing exercise. It is good business and the consequences mean lowered reputational risk to brand equity, for example. 

United Airlines is experiencing the social consequences of their lack of sustainable corporate culture and their subsequent employee actions which shocked the travelling client base.

Bruno's investing strategy encourages public companies to discover opportunities to benefit society and themselves by strengthening the competitive context in which they operate, to
 determine which CSR or sustainability initiatives they should address, and to find the most effective ways of doing so.

Follow On Twitter @Jacolineloewen

June 2, 2017

What is the ROI of Golf?

For me, golf is hard. I only started playing a few years ago, primarily for business, and just when I think I am getting bearable on the golf course, the season ends. When I watch the professionals play - like Annika Sorenstam - they make it look easy. Annika swings her club and her ball goes exactly where she determines it should go. I watch her play to get some tips for myself and dream that my ball could also glide across the green and thunk into the hole. Annika has recently stepped down as #1 top female ranked golf player. Her ROI on golf has been substantial - world class and a huge draw for TV viewers and golf enthusiasts.
Annike has dedicated herself to the game and is an expert. This means her game is predictable and you can be confident she will be the top of her category. Those few feet between my attempts at getting  the ball in the hole and Annike's are actually worth a great deal of money - the ability to win world championships and making an income from playing the sport.
My ROI for golf is a lot of fun, getting out in the sunshine with friends and getting to play with business colleagues who cheerfully put up with my lack of competence.
What is your ROI on Golf?