Current, Former Carmel Signarama Owners Both Come Out Ahead

by Jason Sophian - November 17th, 2014

Carmel Signarama owner Jay Patel

Carmel Signarama owner Jay Patel


(Carmel, Indiana)—One of the most basic axioms of a successful business deal is that the smoothest transaction is the one which leaves all parties happy. Current Carmel Signarama owner Jay Patel and former owner Joel Hall can both tell you firsthand how true that statement really is. In March, 2014, Patel purchased then-owner Hall’s successful Signarama business where he has since worked to both maintain business continuity to keep existing customers happy, while also putting his own stamp on the business as he seeks continued growth.

From his side of the transaction, Joel Hall, the store’s previous owner, found the process to be just as painless. “I worked hard to build a solid business and increased the value of this location by 400%,” says Hall. “United Franchise Group, the parent company for Signarama, values the overall business ownership process as an exit strategy.”

That’s the purpose of Signarama’s Mentor Program, which Hall headed up for the world’s largest sign franchise. “We found that experienced business buyers value the mentor program. Franchisee peer support and transition planning comes from our group and the new franchisees benefit greatly from taking part in it during a resale such as ours,” Hall adds.

In fact, Hall enjoyed his part in the Signarama Mentor Program so much, it was one of the reasons he sold his business and says, “This is the Best Exit Strategy One Could Have.” He is now pursuing his passion of educating college students on entrepreneurship and owning a business or a franchise.

Former Signarama owner Joel Hall

Former Signarama owner Joel Hall

Patel is working to keep—and grow—upon Hall’s success. “First and foremost, I placed an emphasis on keeping the customers that have been coming here for years,” says Patel. “It was nice to own a business that had already proven to be successful.” No stranger to entrepreneurship, Patel has business acumen gained from over 18 years of successful ownership experience, beginning with a single dry cleaning company which expanded to five by the time he sold the operation, as well as experience as the owner of a non-emergency medical transportation business.

For his part as both a former owner and reseller, Hall shares his advice for the next-generation of franchisees. “There is an incredible amount of work that needs to be put in to running and growing a business. At some point the business will transition into new management or ownership and many owners worry about ‘what am I going to do?’ after the business sells. During my ‘journey’ I found out that I like to teach. So, after 14 years of building a successful business and then selling it, I now teach full time and love it. The hard work does pay off.”

ABOUT SIGNARAMA
Signarama, www.signarama.com, the world’s largest sign franchise, offers branding and messaging solutions in addition to comprehensive sign and graphic services to consumers and commercial customers – from business signs, vehicle wraps, and digital signs, to advertising and marketing services. Signarama is part of a successful system of business-to-business franchise brands and development services under the United Franchise Group. As part of the $49-billion-plus worldwide sign market, Signarama has been at the forefront of the sign industry for more than two decades. Approaching 900 locations worldwide, the company expects to have more than 1,200 locations worldwide by the end of 2016.

For additional information, contact:
Jason Sophian
Sanderson & Associates
jason@sandersonpr.com
312-829-4350

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Buy-Sell Agreements Should Protect You, Your Co-Owners And Your Company

by T. Ray Phillips - November 5th, 2014

Presented by T. Ray Phillips

Imagine, on the eve of your wedding, that you plan to divorce, on a friendly basis of course, in 15 years or so. During those 15 years, you will work diligently, and quite successfully, to build a business.

On the preordained day that your marriage ends, you announce that you are willing to give your soon-to-be ex-spouse one-half of your company’s business value—in cash. And you let your “ex” value your company because those are the terms of the agreement the two of you signed a year after you were married.

Sounds ridiculous, no? Yet, you may have done something quite similar (and similarly ridiculous) in your business with your co-owners.

Few owners begin working together with an expectation of future acrimony, much less litigation. Fewer still give thought to one day leaving the business—even on friendly terms. Indeed most exits are not precipitated by a disagreement among co-owners; instead owners leave for a variety of reasons and simply want to do so with their share of business value.

And remember, one day you will leave your business.

Over time, in business as in marriage, partners can grow apart. We’ve all witnessed the resentments, discord, and wastefulness of a friend’s or acquaintance’s needless nasty divorce. Business divorces can be equally unpleasant—with an added twist: One may be unable to leave the business, or force a partner to leave, without appropriate tax and legal planning.

When you or a co-owner wants out, what will happen? Chances are that when you turn to your company’s buy-sell agreement, you will find that it is woefully out of date. You may also find that it controls the terms of your (or any owner’s) exit from the business not only upon death, but also during lifetime.

If you haven’t looked over your company’s buy-sell agreement since you signed it, dust it off and check out at least four key provisions:

Lifetime and death transfers of ownership:
When must an owner sell, or offer to sell?
When must an owner (or the company) buy and when does it have the option to buy?
How will the value of the company and the value of a departing owner’s interest be determined?
Does the agreement mandate the use of an independently determined Fair Market Value at the time of transfer? If not, the valuation will favor you or the other owner. It will not treat you even-handedly.
What are the terms (length, down payment, interest and guarantees) of the buyout?
We generally assume that buy-sell agreements control the transfer of an owner’s interest when he or she dies or becomes disabled. Indeed, they do that. But they usually do much more and if you don’t appreciate how much more, disaster looms.

At his annual physical, Steve Hughes complained that he was bone tired. After a battery of tests, Steve’s doctor observed that, while there was nothing physically amiss, Steve did seem depressed. After some introspection, Steve was able to articulate that he had no interest in continuing as a partner in a successful CPA firm. Like many owners, Steve had lost the passion and commitment to the business that still stoked his younger co-owners. He decided to sell out before his partners demanded it.

Steve broke the news of his departure to his two partners and noted that their buy-sell agreement controlled only a buyout at death and an option for the company to buy Steve’s stock if he were to sell it to a third party. Attempting to sell a partial interest in most businesses to a third party is always a difficult proposition, but current economic challenges made that course of action impossible.

Steve and his partners were left in a classic dilemma: remaining shareholders want to purchase the departing shareholder’s interest so that future stock appreciation—due solely to their efforts—would be fully available to them. Conversely, because the profits of a closely-held corporation are either accumulated by the company or distributed to the active shareholders in the form of salaries, bonuses and other perks, the departing shareholder (now an inactive owner) rarely receives significant income in the form of distributions or dividends.

Naturally, Steve wanted and needed maximum value for his interest while his co-owners were convinced that the company’s cash flow could not support Steve’s buyout.

So, look again at your business continuity agreement: If you are the one leaving, is it as fair as it is if you are the one left behind?

When you sit for the first time across the bargaining table from your partner, you will want that table set with a fair valuation method, a thoughtfully designed lifetime buyout provision (that may well reduce the cash flow required for a buyout by 20 to 30 percent), and manageable payment provisions. Since it is exceedingly difficult to design these provisions when buyer and seller are at the bargaining table, agree to and document the valuation, cash flow, tax, and payment provisions long before potential discord or differences of outlook arise.

DISCLAIMER: The information contained in this article is general in
nature and is not legal advice. For information regarding your particular situation, contact an attorney or tax advisor. This newsletter is believed to provide accurate and authoritative information related to the subject matter. The accuracy of the information is not guaranteed and is provided with the understanding that none of the providers of this newsletter, including Business Enterprise Institute, Inc., is rendering legal, accounting or tax advice. In specific cases, clients should consult their legal, accounting or tax advisors.
The example provided is hypothetical and for illustrative purposes only.

It includes fictitious names and does not represent any particular person or entity.

To contact T. Ray Phillips Re: subject matter in this article, call
(317) 208-6312 OR e-mail trphillips@finsvcs.com

Please do not leave trade instructions over e-mail, as they cannot be processed.

Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS under circular 230, we inform you that any U.S. Federal tax advice contained in this communication, unless otherwise specifically stated, was not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another party any matters addressed herein.

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Salvation Army Collects Coats for Children in Need

by John Gifford - October 16th, 2014

JoAnn Remender
Planned Giving Director The Salvation Army
Indiana Divisional Headquarters
3100 N Meridian Street
Indianapolis, IN 46208
(800) 589-1037
www.MyPlan2Give.org
Opening our Hearts (and Closets) to Children in Need this Fall

Remember last winter and the “Polar Vortex” that haunted weather forecasts from December through March? You may ask, “Who doesn’t remember it?” With the onset of fall and the return of kaleidoscope trees, we are once again thinking about the challenges that families in our communities experience during cold winter months.

For 28 years The Salvation Army has partnered with Indianapolis television station WTHR and Tuchman Cleaners to collect, clean and distribute well over 200,000 winter coats to Central Indiana children in need. New and gently used coats in all sizes are needed to help families who cannot afford the extra expense of winter gear for their growing children. In 2013, over 4,200 children “shopped” with their parents and family members to find the perfect coat and perfect fit.

From its beginning, The Salvation Army has made it a priority to clothe and protect the most vulnerable members of our population – children. Today we continue that tradition and mission with programs in communities around the world, including across the State of Indiana.

For the fourth year, The Salvation Army Lafayette Corps is partnering with local television station WLFI to collect and distribute coats through its own Coats for Kids program, which served over 3,000 Tippecanoe County residents in 2013. The Bloomington Corps asks Monroe County residents to be a “Shield Against the Cold” by dropping off coats at almost twenty area businesses during the month of October. Other programs in Evansville, Kokomo, Fort Wayne and other communities help thousands more children prepare for winter weather.

When it comes to the safety and well-being of our children, communities across Indiana look to The Salvation Army as a local resource for the basic necessities of life: food, shelter, water and clothing. Of course, every coat that warms a child also warms their heart with life’s greatest gift – love.

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The Best Ways to Get Noticed by Recruiters

by Jamar Cobb-Dennard - August 29th, 2014

Jamar Cobb-Dennard is interviewed by Karen Weik of Beyond.com

Jamar Cobb-Dennard
jamar@jamarspeaks.com
Sales Recruiter at Hire Sales

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