News
BBI Sources Hidden Cash and Increases Long-Term Business Value with Strategic Transition Planning
Closely Held Businesses Benefit in Down Economy through Business Transition Solutions ServiceBELLEVUE, Wash. (Feb. 19, 2009) – As stock portfolios rapidly decline, one investment that owners of closely held and family-owned companies can control is their business. By creating a transition plan, which clearly defines future goals, valuation and strategies for immediate and long-term success, entrepreneurs can fully maximize the return on this important asset.
According to BBI Financial LLC, a strategic advisory firm headquartered in Bellevue, Wash., transition planning can yield new cash flow sources immediately and increase long-term valuation by an average of 40 percent. The renewed focus provided by a strategic review can help a business remain viable in the midst of economic chaos.
”A solid plan will give a business owner confidence while providing a tactical solution to help survive an extended recession,” noted Kyle Enger, founder and principal of BBI. “How an organization trims, tightens and prepares to weather the storm makes a difference for the long run.”
At the end of 2008 in response to the down economy, BBI launched Business Transition Solutions, a service subsidiary specifically designed for middle-market business owners considering the future. With one-third of privately held businesses in the United States transitioning to new leadership in the next five to 10 years as baby boomers reach retirement age, BBI’s team saw a market need and filled it.
“Business owners have so many things to do in a day, it is easy to get caught up working in the business and neglect working on the business,” said Enger. “We help business owners manage through these tough times, while at the same time maintain focus on their long-term value.”
BBI works with business owners throughout the United States whose results illustrate the benefits of transition planning. For example, the BBI team consulted with Jean and Steve Schnee with Schnee’s Boot’s & Shoes, a boot manufacturer and retailer located in Bozeman, MT. By following BBI’s counsel, the Schnees increased the value of their business by 40 percent and positioned the business for successful purchase by a private buyer.
Another example is the work that Enger and his team completed for Columbus Salami, a manufacturer of branded and private-label deli meats located in San Francisco, CA. Throughout their engagement, BBI provided counsel that doubled the company’s valuation over a four year time period. The BBI team helped Columbus Salami properly implement strategic financial and operational controls in order to maximize efficiencies.
The Business Transition Solutions diagnostic service analyzes businesses through many lenses: tax, legal, estate planning, financial and family dynamics. The final product of Business Transition Solutions is a well-defined road map document called a CATScan.
“We have a proven method to help businesses squeeze more cash out of their business and set the company up for long-term viability,” added Enger. “The maximum value of a business can be realized with the clarity and precision of a well-executed transition plan.”
About BBI Financial LLC
BBI Financial, LLC has successfully provided business succession planning for closely held and family-owned business owners for over 20 years. They provide services directly to businesses and through partner banks. Details at www.bbillc.com.
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FOUR TIPS TO IMPROVE BUSINESS CASH FLOW
BBI Financial shares immediate actions to increase solvency during economic turmoil
BELLEVUE, Wash. (April 9, 2009) - With the tight credit market putting the squeeze on businesses, improving cash flow is vital for survival. According to Kyle Enger, founder and principal of BBI Financial LLC, business owners and managers can implement four key actions immediately to enhance their financial statements.
BBI is a corporate advisory firm headquartered in Bellevue, Wash. As experts in assisting closely held and family-owned businesses with transition and improvement planning, Enger and his team at BBI have helped businesses improve their current liquidity position and increase long-term valuation by an average of 40 percent.
BBI’s four cash flow improvement tips for businesses include:
- Do not lose sight of nickels and dimes. Use the mirror technique to control expenses. This approach requires careful examination of the growth or decline of sales over a specific period and adjusts operating expenses accordingly. For example, if a company’s sales were to decrease by 25 percent during the projected period, operating expenses should also decrease by 25 percent.
- Balance accounts payable and receivable activity. Controlling the speed with which receivables are collected and vendors are paid are tried-and-true methods for increasing cash. Offering early payment incentives for receivables and delaying payment to vendors will shorten the working capital cycle, ultimately improving the financial viability of a company.
- Watch out for inventory creep. Driven by revenue growth, business owners can easily lose sight of gradual inventory increases that can impair a company’s cash position. A business owner should take a detailed look at inventory and determine how to increase sales of the available products. Consider offering special discounts or unique package deals to move inventory and generate revenue.
- Match credit terms appropriately. The effects of improper debt structure can be debilitating to a business. Purchasing equipment and other fixed assets with a short-term line of credit, drains the cash out of the business and tightens the timeframe the asset has to pay for itself. Instead, a business owner should work with a banker to match credit terms to the asset. By doing this, the owner can free up a line of credit for seasonal working capital needs.
About BBI Financial LLC
BBI Financial, LLC, based in Bellevue, Wash., is a leading provider of strategic advisory services to closely held and family-owned companies. With its signature approach to business transition planning, BBI has been generating results for middle market companies for the last 20 years. BBI provides services directly to businesses and through partner banks. www.bbillc.com.
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EVENTS
Tuesday, October 20th, 2009KeyBank’s Financial Forum Workshop
Building Transferable Value in Troubled Economic Times
Hilton Bellevue - Redmond Room
300 112th Ave SE
Bellevue, WA 98004
8 am – 4:30 pm
$175/per attendee