Category Archives: San Antonio Business Attorney

Top Exit Planning Strategies for Small Business Owners

Small Business Owners: Listen to this thought. You’ve poured your heart and soul into building your company, but have you thought about your exit strategy? If not, you’re making a huge mistake that could cost you millions. Don’t worry, I’m here to help you avoid that costly blunder.

The Cold, Hard Truth About Small Business Exit Strategies

Look, I get it. You’re busy running your business day-to-day. The last thing on your mind is how you’re going to leave it someday. But here’s the reality: without a solid exit plan, you’re gambling with your financial future1.

Think about it. You wouldn’t start a cross-country road trip without a map, would you? So why are you running your business without an exit strategy? It’s time to wise up and start planning your escape route.

The Million-Dollar Secret to Successful Exit Planning

By the way, did you know that business owners who plan their exit strategies in advance can increase the value of their businesses by up to 50%?2 That’s right, you could be leaving millions on the table by not planning ahead.

But don’t panic. I’m about to share with you the top exit planning strategies that will have buyers lining up to throw money at you when you’re ready to sell. Are you ready? Let’s dive in.

Strategy #1: Start Early and Often

Listen closely, because this is crucial. The best time to start planning your exit is the day you open your business. The second-best time? Right now.

Don’t make the mistake of waiting until you’re ready to retire. By then, it’s too late. You need to be working on your exit strategy constantly, tweaking and refining it as your business grows and changes3.

Strategy #2: Know Your Numbers Cold

You see, when it comes time to sell, potential buyers are going to scrutinize every aspect of your financials. If you can’t explain every single number, you’re dead in the water.

Start keeping meticulous records now. Know your profit margins, your growth rate, your customer acquisition costs. These numbers will be your secret weapon when it’s time to negotiate.

Strategy #3: Build a Business That Can Run Without You

Think about it. Would you want to buy a business that falls apart the moment the owner walks away? Of course not. Neither do your potential buyers.

Start delegating. Build strong systems and processes. Train your team to run the show without you. This not only makes your business more valuable, but it also gives you the freedom to start planning your next adventure.

Strategy #4: Diversify Your Customer Base

Look, having a few big clients might seem great now, but it’s a ticking time bomb when it comes to selling your business. Buyers want to see a diverse customer base that can weather the loss of any single client.

Start expanding your client roster today. It might be more work now, but it’ll pay off big time when you’re ready to cash out.

Strategy #5: Clean Up Your Act

By the way, did you know that legal issues are one of the biggest deal-killers in small business sales? It’s true. Even minor legal hiccups can send potential buyers running for the hills.

So, get your house in order. Resolve any outstanding legal issues. Make sure all your contracts are up to date. Dot your i’s and cross your t’s. It might seem tedious now, but it’ll be worth it when you’re counting your millions later.

The Million-Dollar Takeaway

Remember, planning your exit strategy isn’t just about selling your business. It’s about maximizing the value of all your hard work. It’s about securing your financial future. It’s about leaving a legacy.

So, what are you waiting for? Start implementing these small business exit strategies today. Your future self will thank you when you’re sipping margaritas on a beach, counting the millions you made from your perfectly executed exit plan.

And that’s all there is to it. Now get to work on your exit strategy. Your financial future depends on it.

Are You Leaving Millions on the Table?

Discover The 7-Figure Exit Accelerator

Debt Financing for Businesses: A Simple Guide for Smart Growth

What is debt financing?

Companies, just like people, sometimes need extra money to buy cool stuff or do big projects.
Instead of saving up for ages, they can borrow money (called “debt”) and promise to pay it back later, plus a little extra (that’s the “interest”).
This is way faster than saving for everything, and helps companies grow!

Types of Debt Financing

Bank Loans:

This is the classic “go to the bank” option.
The bank gives you a set amount of money, and you pay it back in regular payments (like your allowance, but bigger chunks).
Example: A bakery needs $20,000 for a new oven. They get a bank loan and pay it back over five years.

2. SBA Loans:

These loans are like bank loans, but the “SBA” (Small Business Administration) helps make them happen.
The government says, “Hey bank, lend to this smaller company, and we’ll make it less risky for you.”
It’s great for new or smaller businesses that might have trouble getting a traditional loan on their own.

SBA 7(a) Loans

The most popular SBA loan: This is great for all sorts of business needs.
Max Amount: Up to $5 million
Examples of Use:
- Buying equipment or machinery
- Buying land or buildings
- Hiring more people
- Refinancing existing business debt

SBA 504 Loans

Focused on big stuff: These loans are for major fixed assets like fancy machinery or buying a whole building.
Max Amount: Up to $5 million (up to $5.5 million for certain energy-efficient projects or manufacturing).
Example of Use: A factory needs to buy a huge, expensive machine to make more products.

SBA Microloans

Helping smaller businesses get off the ground: These loans are for startups or businesses needing just a bit of extra cash.
Max Amount: Up to $50,000
Examples of Use:
- Buying supplies and inventory
- Renting a small workspace
- Marketing your new business

3. Mezzanine Debt

Hybrid Nature:

Mezzanine debt is like a blend of regular debt (bank loans) and equity (ownership in the company).
Lenders give the company money, but they also get something called “warrants.”
Warrants are the right to buy shares in the company at a set price later on. This makes it potentially more rewarding for the lender if the company does well.

Position in the Company’s Finances:

“Mezzanine” means “middle” – this debt sits in the middle of a company’s capital structure:
- Senior Debt: Traditional loans from banks are on top. They get paid back first if something bad happens.
- Mezzanine Debt: Sits below senior debt – riskier for the lender.
- Equity: The owners’ stake in the company is at the bottom.

Why Companies Use It:

Growth: Companies that are growing quickly but don’t want to sell a big chunk of ownership may like this option.
Flexibility: Mezzanine debt can have more flexible repayment terms than traditional loans.
When banks get nervous: If a company is considered a bit riskier, traditional lenders might shy away. Mezzanine lenders are more open to risk in exchange for potential rewards.

The Downside:

Expensive: Mezzanine debt usually has higher interest rates than bank loans because the lenders take on more risk.
Potential Dilution: Those “warrants” the lenders get could mean existing owners have a smaller share of the company if the warrants are exercised.

Example: A hot new app company needs a ton of cash to make their app even better. Mezzanine debt lets them do that.

Other Types of Debt:

Bonds:

Companies basically sell ‘IOUs’ to a bunch of investors.
Investors give money now, company pays it back later (plus interest).
Example: A big car maker might need billions to build a new factory. They issue bonds to get that money.

Lines of Credit

Think of it like a company credit card.
The lender says, “You can borrow up to X amount whenever you need it.”
Great for unexpected expenses or when cash flow is up and down.
Example: A construction company gets busy sometimes and slow other times. They have a line of credit to make sure they can pay workers.

Important Things to Remember

Debt is NOT free money! You gotta pay it back, plus that extra “interest.”
Companies have to be careful not to borrow too much or they might not be able to make the payments.
Just like you choose your friends carefully, companies must pick the right type of debt for what they need!

TRUE SUCCESS DEPENDS ON YOUR ENJOYMENT

TRUE SUCCESS DEPENDS ON YOUR ENJOYMENT

You can start at anytime if you want to be successful. But you have to start.

You won’t accomplish anything if you wait for all the possible objections to be overcome. Taking a new step, uttering a new word, is what people fear most.

Don’t be afraid to live. Don’t wait for things to change. Don’t wait until you have more time, until you are less tired, until you get the promotion, until you settle down, until, until, until.

Don’t wait for a major event in your life to occur before you begin to live.

The Paradox of Waiting

The allure of waiting for the “perfect” moment to start living or pursuing our dreams is a seductive trap. We convince ourselves that once we have more time, more money, or a better situation, then we’ll finally be ready to embrace life fully. But the truth is, there will never be a perfect moment. Life is a constant flow of change and challenges, and waiting for ideal conditions is a recipe for stagnation and regret.

Consider the aspiring entrepreneur who dreams of launching their own business but hesitates, waiting for the “right” time. They may worry about financial security, lack of experience, or fear of failure. However, every moment spent waiting is a missed opportunity to learn, grow, and build the business they envision. While careful planning and preparation are important, excessive procrastination can be paralyzing. The most successful entrepreneurs often take the leap of faith, learning and adapting as they go. They understand that action, even imperfect action, is the catalyst for progress.

Embracing Imperfection: The Beauty of the Unpolished

Success is not about perfection; it’s about progress. Every step we take, no matter how small, brings us closer to our goals. Embracing imperfection means acknowledging that we will make mistakes, encounter obstacles, and face moments of self-doubt. But it also means recognizing that these experiences are part of the journey and essential for growth.

Think of the artist who fears sharing their work because it doesn’t meet their own exacting standards. Every piece they withhold from the world is a missed opportunity to connect with others, receive feedback, and refine their craft. The most beloved artists throughout history are not necessarily those who achieved technical perfection, but those who poured their hearts and souls into their creations, flaws and all. Vincent van Gogh, for example, struggled with mental illness and poverty, yet his vibrant, expressive paintings continue to inspire and move people around the world.

The Joy of Starting: Unleashing Your Potential

The most fulfilling experiences often begin with a simple decision to start. Whether it’s launching a new project, learning a new skill, or simply making time for the things we love, taking that first step is where the magic happens. When we allow ourselves to start, we open the door to unexpected possibilities and discover hidden talents.

Consider the individual who dreams of running a marathon but has never laced up a pair of running shoes. The act of taking that first jog, no matter how short or slow, is a victory in itself. It’s a declaration of intent, a commitment to a healthier lifestyle, and a step towards a seemingly impossible goal. With each subsequent run, they build endurance, gain confidence, and eventually cross the finish line, proving to themselves that they are capable of far more than they ever imagined.

Action Steps to Embrace Success and Enjoyment

Identify your passions: What are the activities, interests, or goals that truly excite you? Make a list and commit to exploring them further. This could involve trying new hobbies, taking classes, or simply spending more time on activities that bring you joy.
Set small, achievable goals: Break down your larger aspirations into smaller, manageable steps. This will make them feel less daunting and provide a sense of accomplishment as you progress. For instance, if your goal is to write a novel, start by setting a daily word count goal.
Create a routine: Schedule time in your day or week to dedicate to your passions and goals. Consistency is key to making progress and building momentum. Even dedicating 15 minutes a day can lead to significant results over time.
Don’t be afraid to experiment: Try new things, explore different approaches, and be open to unexpected outcomes. You may discover hidden talents or passions along the way. Step outside your comfort zone and allow yourself to be surprised by what you find.
Celebrate your successes: Acknowledge and celebrate your achievements, no matter how small. This will reinforce positive behavior and fuel your motivation. Share your wins with friends, family, or online communities for added support and encouragement.
Surround yourself with supportive people: Connect with individuals who share your interests and encourage your aspirations. Their support can be invaluable on your journey to success. Join clubs, attend workshops, or participate in online forums to find your tribe.
Learn from your mistakes: View setbacks as opportunities for growth and learning. Don’t let fear of failure hold you back. Analyze what went wrong, adjust your approach, and keep moving forward. Remember, even the most successful people have faced countless failures along the way.

Remember, true success is not measured solely by external achievements but also by the joy and fulfillment we find in pursuing our passions and living life to the fullest. By embracing the present moment, taking action, and pursuing what brings us joy, we can unlock our full potential and create a life that is both meaningful and rewarding.

The journey to success is a continuous process of growth, learning, and self-discovery. By setting high expectations, embracing challenges, persisting in the face of adversity, and believing in ourselves, we can achieve our wildest dreams and inspire others to do the same. Remember, the only limits we have are the ones we place on ourselves. So, dream big, think big, and dare to be great. But most importantly, remember to enjoy the journey. It’s the joy, passion, and fulfillment we find along the way that truly define success.

GREAT EXPECTATION PRECEDES GREAT ACHIEVEMENT

GREAT EXPECTATION PRECEDES GREAT SUCCESS

High expectation always precedes high achievement. You’re as small as your controlling desires, or as great as your dominant aspirations.

Once your mind stretches to a new idea it never goes back to its original dimensions.

Think little goals and you can expect little achievement. Think big goals and you’ll win big success. The first ingredient of your success is to dream a great dream.

You must dream big and think big to be big.

The Visionary Power of Big Dreams

The human mind is a remarkable tool, capable of conjuring and manifesting extraordinary possibilities. When we dare to dream big, we unlock the potential that lies dormant within us. Great achievements throughout history have been born from audacious visions – from the Wright brothers’ dream of flight to Elon Musk’s ambition to colonize Mars.

Consider the story of J.K. Rowling, who envisioned a world of magic and wizardry while struggling as a single mother on welfare. Her unwavering belief in her creation led to the Harry Potter series, a global phenomenon that transformed her life and captivated millions worldwide.

The Psychology of Achievement: Self-Fulfilling Prophecies

Our expectations have a profound impact on our actions and outcomes. When we set high expectations for ourselves, we create a self-fulfilling prophecy. We become more focused, motivated, and resilient, pushing our limits to reach our desired goals. Conversely, limiting beliefs can hold us back, causing us to self-sabotage and settle for mediocrity.

Research in psychology has repeatedly demonstrated the power of positive expectations. The Pygmalion effect, for instance, shows that when teachers believe in their students’ potential, those students tend to perform better. This principle applies to all areas of life – when we believe in ourselves and our abilities, we are more likely to succeed.

Visualization: A Blueprint for Success

Visualization is a powerful technique that can help us turn our dreams into reality. By creating a mental picture of our desired outcomes, we activate the same neural pathways as if we were actually experiencing them. This process primes our minds for success, making us more likely to take the necessary actions to achieve our goals.

Olympic athletes often use visualization to enhance their performance. They imagine themselves executing their routines flawlessly, winning medals, and standing on the podium. This mental rehearsal helps them develop muscle memory, improve focus, and overcome anxiety, ultimately leading to better results.

Embracing Challenges: Growth Through Adversity

The path to greatness is rarely smooth. Challenges and setbacks are inevitable, but they can also be our greatest teachers. When we view obstacles as opportunities for growth, we transform them from roadblocks into stepping stones. Each hurdle we overcome strengthens our resolve and brings us closer to our goals.

Consider the story of Thomas Edison, who famously said, “I have not failed. I’ve just found 10,000 ways that won’t work.” Edison’s relentless pursuit of the incandescent light bulb, despite numerous setbacks, is a testament to the power of perseverance and the importance of learning from mistakes.

The Power of Persistence: Never Giving Up

Persistence is the key to unlocking our full potential. When we refuse to give up on our dreams, we create the conditions for success. By maintaining a steadfast focus on our goals and taking consistent action, we increase our chances of achieving them, no matter how long it takes.

The story of Colonel Sanders, the founder of Kentucky Fried Chicken, exemplifies the power of persistence. He faced countless rejections before finding a restaurant willing to serve his signature fried chicken recipe. His unwavering belief in his product and his determination to succeed eventually led to the creation of a global fast-food empire.

Self-Belief: The Foundation of Success

True success starts with self-belief. When we believe in ourselves and our abilities, we unlock our inner potential and create the conditions for extraordinary achievements. Self-belief is a powerful force that can propel us forward, even in the face of adversity.

The life of Oprah Winfrey is a testament to the power of self-belief. She overcame a difficult childhood and numerous obstacles to become one of the most successful and influential women in the world. Her unwavering faith in herself and her abilities allowed her to break barriers and achieve her dreams.

Inspiring Others: The Ripple Effect of Success

As we strive for greatness, we have the power to inspire and uplift others. Our actions, our words, and our achievements can create a ripple effect that extends far beyond our own lives. By sharing our stories, our struggles, and our triumphs, we can ignite the spark of ambition in others and empower them to pursue their own dreams.

Conclusion

Will Your Business Sell for What It Should?

San Antonio Business Lawyer

Escaping The Corporate Cubicle

Escaping The Corporate Cubicle

Have you ever felt like you were trapped?

Trapped in the corporate cubicle…trapped in a job you may not enjoy…trapped doing something that consumes your life and is not getting you to your goals?

One of our mentors shared this story recently….

“I worked in corporate consulting in a forty-five story office building in New York City. I thought I had it made. I worked 60 hours a week, got 15 days of vacation a year and had a nice manager title, nice benefits and great people I worked with…

…but I felt trapped. I felt like the goals I really wanted in life were slipping away as I worked my tail off each week in the cubicle.

I had an aha-moment the day I shared my dream with one of my corporate mentors, who patted me on the shoulder and said: ‘The only security you will ever have in life is what you create for yourself’.

Reflecting on his powerful comment as I walked back to my cubicle, I understood that to achieve what I wanted long term, I had to prepare and condition myself mentally and emotionally, toughen up my belief and confidence, and bullet-proof my vision with the right skill sets and action steps for this new business and life direction.”

So how do you escape the corporate cubicle?

It all starts with a desire like my mentor above.

Then it takes ACTION.

You actually have to make a plan to get yourself out of that Rat Race and follow up with it.

Here is a list of some of the things you should have on your “Action Plan”

Find an opportunity or business that you are going to start. Do your research and make sure that it is something you will enjoy doing but not only that…something that actually makes money. Too many times people embark on opportunities because it sounds fun…but they soon find the financial rewards were not as great as they thought in the beginning.Look at other successful people in that opportunity and find out what they are doing and how much they are making and importantly what they had to do to get there. Not all opportunities are equal. Pick one that is growing and will give you the opportunity to rise up with it.
Create a business plan. Put realistic goals and expectations. You are in this for the long run. With a good opportunity it may take you a few years or more to get to the point where you can quit that job forever…but realize when you do YOU ARE FREE! So make a long-term business plan. People who fail, usually don’t have a business plan and they think success should be instant.
Fill your mind with POSITIVE information and teachings. Read Thank and Grow Rich and As a Man Thinketh. Listen to the teachings of Wayne Dyer, Tony Robbins, Jim Rohn, Zig Ziglar, Brian Tracy, Earl Nightengale, Denis Waitley, and Dale Carnegie to name a few. Let them become your coaches and mentors.
TAKE MASSIVE ACTION! Decide what you want to do and GO FOR IT! Find the time in your life even if you are super busy. Work on your new business during your lunch hour, early in the morning, late at night. Find the time. You can do it because you know the rewards will be worth it.A few years of time sacrifice will be worth it when you break out of the cubicle and live a life of freedom!

It is very possible to reach your goals and escape the Rat Race if you really want it. Sure there will be bumps in the road and it may not always turn out exactly like you wanted and you may have to change courses a few time.

…but if you stay the course, work hard, and never quit… You will be rewarded.

Remember the day you walk away from your job and are carrying your box of personal items out to your car…not because you were fired or laid off…

…but because you QUIT!

(Don’t forget to have someone take pictures of you with your box of stuff as you walk to your car…it will be part of your story!)

If you are looking for a great opportunity that can help YOU escape the cubicle, watch the video below and see what I’m doing.

Watch This Video

…and follow the simple steps. It’s working for me and thousands of others out there online.

To your success,

Jim Montgomery

San Antonio Business Law

Obamacare Warning!

I am attaching an urgent update from DEBS Insurance. They have been analyzing healthcare plans for like 40 years and have alerted me to a number of embedded penalties and taxes for employers that are not being publicized. Please pay close attention:

ACA and your Company’s impact

By: Diversified Employee Benefit Services, LLC

Multiple changes have occurred in the last few months that require your agent to inform each employee about their future options.

1) This is next piece of the ACA or National Health care Puzzle:

Employer must notify each employee via paycheck insertion or company email that there will be “..Marketplace health insurance” to purchase by an individual. The link, for those employees interested in reviewing that product should go to healthcare.gov

2) Federal and State exchanges should be available 1/1/2014 for all employers and their employees. Please note the following:

Employees should realize that employer contribution will be greater than the anticipated cost for exchange.

Example published by Kaiser Insurance Co. average monthly premium to be $ 440

If an employee’s income is below $ 22,800

Then the employee may qualify for subsidy assistance, how much is that assistance, it is expected to be 50% or net cost of $ 220

Per month.

3) Another twist to Employer charging employees for a portion of the group medical premium states, employer cannot charge more than

9.5% of an employee’s gross income for their portion of the employee only medical premium.

Example: Employee income below $22,800 X 9.5% = $ 2,166 a year

Or, employer may charge employee monthly $ 180.50

So if employer is charging less than the employee should stay under the employer’s benefit plan.

This is an employer nightmare! Employers will have many multiple of employee hourly wages that could change the contribution per employee to the group medical benefit plan

4) Employer benefit plan cannot have out of pocket expenses or employee liability to exceed $ 8,250

This directly refers to deductible and co insurance.

5) Pre existing limitations are eliminated effective 1/1/2014

6) Employer penalties will not be implemented until 1/1/2015

Note: Information from ACA, DOL, Kaiser Insurance Co. and multiple carriers.

Disclaimer: The information above is the opinion of Diversified Employee Benefit Services, LLC and should be reviewed by each employer from additional professional services

800/990-3427 Diversified Employee Benefit Services, LLC

The Monkey Story – Developing Procedures

The Monkey Story

It seems that there was a research project in which the scientists used four monkeys, a ladder and a banana. They put the four monkeys in a room with the ladder and put the banana on top of the ladder.

As monkeys will, the first monkey smelled the banana and started up the ladder. When he got half way up, the scientists turned on a water cannon filled with ice cold water. The cannon knocked the first monkey off the ladder and then iced down the other three monkeys. The monkeys huddled in the room shivering from the cold bath.

After a while, once the monkeys had warmed up, a second monkey smelled the banana and started up the ladder. Again, the water cannon came on, knocked her off the ladder and iced down the other monkeys for good measure.

When the third monkey started to go up the ladder for the banana, the other three monkeys grabbed him and beat the “you know what” out of the errant monkey. The scientists were quite surprised to see that behavior. They decided to introduce a new element into the experiment.

One of the monkeys was removed from the room and replaced by a new monkey. Before long, the new monkey smelled the banana and headed up the ladder. Sure enough, the other three monkeys grabbed the new monkey pulled her down and beat the tar out of her.

The scientists again replaced one of the first group of monkeys and the scenario repeated itself. They kept replacing monkeys until all of the original monkeys who had been iced down were gone.

When the new monkey went for the banana, guess what happened? That’s right, the rest of the monkeys taught the new monkey not to go for the banana! And none of them knew why they did it any more!

Is this how procedures are developed at your business?

Need help? Call us at 210-690-3700 for a free no obligation consultation. Get twice as much for your business or fire yourself and keep the money coming.

Learn about the Obama Tax Increases

Are you ready to pay more taxes?

Here is the Obama Tax Plan (not to mention the Supreme Court’s disclosure of the Obamacare Tax Plan) announced 2 years ago:

It plans to increase individual tax rates to a 39.6% plus 3.8% which equals 43.4% annual tax rate.
Increase capital gains tax rates to 28% plus 3.8% = 31.8%
Dividends will be taxed at 39.6% plus 3.8% = 43.4%
Increase the amount of healthcare costs to individuals.
Reduce itemized deductions by 30%.

Read the rest of the article here.