What to Plan for in a Buy Sell Agreement to Prevent Loss of Business & Litigation.

The Kensington Company & Affiliates would like to thank Jeanne Brutman, LUTCF, CBFS, CFS for submitting this informative article.

 

What to Plan for in a Buy Sell Agreement to Prevent Loss of Business & Litigation.

The Goal:  Transfer of Business shares in a life event to those who wish to keep the business and cash to those that need to be bought out due to the following circumstances:

• Death:  The premature passing of a shareholder.  Usually Funded with Life Buyout Insurance, assuming all involved are insurable.

• Disability:  The Unplanned accident or illness of shareholder.  Usually Funded with Disability Buyout Insurance, assuming all involved are insurable.

• Divorce:  Prevention of spouse of shareholder from causing undue stress on other business partners during separation or divorce proceedings.

• Discontent:  The inability of partners to co-exist in one corporation for any reason not related to legal or ethical violations.

• Marriage:  Prevention of future spouses of shareholders from making claim to partial ownership of business in future.

• Retirement:  The ability for any shareholder to leave at agreed upon time amicably.  Usually funded through combination of cash value life insurance, corporate retirement plans and possibly installment payments from Annuity products or ongoing business revenue (least practical).

• Felony:  The removal of shareholder that has legally or ethically endangered the company through their inappropriate actions. 

It is usually recommended to go through some level of third party business evaluation of  your business (not done by your cpa) every two to three years to substantiate the value of the business for IRS taxation purposes.   Business valuation can be done from 3 different perspectives. sale of business to outside parties, estimation of estate taxes or internal buy sell agreement. This should be done as soon as possible to get a base line of the business value as it hits profitability.  Flat value amounts can be used, but run the risk of out-dating rapidly and increased scrutiny from the IRS upon business transfer.  Business valuation formula’s are more useful, but also have to be reviewed and possibly revised as the business changes structure over time.  As mentioned above ,it is considered in good form to review the entire buy sell agreement and it’s formula’s or stated business value every 2-3 years, but. if the business is expanding or shrinking more rapidly, perhaps more often is advisable.

Lunch and Learn June 19th

Kensington Company & Affiliates   Free Lunch and Learn  with a Leading National Franchise Company and their Local Franchise Owners Next Tuesday, June 19th, 1pm The Olive Garden,Old Country Road, Westbury, NY If you are looking for business ownership and want a business that offers fast ramp up, a proven track record and big earning potential. This event is for you! ....and in house franchisor financing. Learn about a franchise that has been ranked by Entrepreneur Magazine as #1 in their category for 15 straight years. Free Event, Registration Required - Click Here (also featured at this Lunch and Learn will be a Franchise Resale for Budget Blinds Netting Approximately 125K and only asking $150K)

A Few Reasons to Learn More about Budget Blinds Low Investment Cost, Under $100K Total Investment   Very Fast Ramp Up and Big Earning Potential Franchisor Financing Available Few Employees Home Based, No Inventory, Low Overhead Flexible Schedule - Make your own Schedule $8 Million Spent Annually on Marketing - in the top 10% of all franchisors. Average Gross Profit = 53% 75% of their franchisees are Men with NO Design or Decor Experience Named the #1 BEST Franchise in their Category for the past 15 Years by Entrepreneur Magazine #1 for 3 years in a row, Franchisee Satisfaction, by Franchise Business Review - AMAZING FRANCHISEE VALIDATION - HAPPY OWNERS, MAKING MONEY Ranked in the top 70 of ALL Franchises by Entrepreneur Magazine Un-paralleled Training and Support Strong Vendor Relationships and Purchasing Power FREE LUNCH If you are looking for a low cost, home based business, that offers complete freedom and flexibility and can cash flows positive in a very short period of time, join us for this Free Lunch and Learn. Most of their franchisees are men with no previous design or decor experience that moved forward with Budget Blinds because of their AMAZING business model with strong earning potential. If you are looking for a business and are on a tight budget, want great support, need quick ramp up and cash flow, then you should invest an hour with us for a free lunch and learn. Don't take our word, meet with local franchisees and speak with 100's of others as you validate and learn about this great franchise opportunity. Furthermore, they will also fly you out to California to see their corporate offices and put you up for 2 nights to meet their team and view their operations. Call or email with questions. Stuart@kensingtoncompany.com 516-626-2211

Why Corporate Executives Make Good Franchise Owners

Today's economy has caused fear and stress to become a part of our daily routine.  People are worried about finding jobs, keeping jobs, and pay cuts.  We worry about providing for ourselves and our families and watch our quality of life diminish.  It is even more difficult when we feel a lack of control over our financial future.

For some, taking control is a real option. How?  By becoming your own boss and making the decisions which directly affect your finances.  Purchasing a franchise allows you to take the risk of owning your business with the benefits of a built in support system and proven successful business model.

Corporate executives make especially good franchisees because of their business background.  Franchisors typically do not look for candidates that are skilled in their service, but rather look for candidates with good business acumen.   

So what traits make corporate executives good franchisees?

• Long term vision for the business.  

• Good leadership skills

• Quality decision making skills

• Reliable

• Good at delegating

• Hard working

• Financial savvy

 Kensington Company & Affiliates offers FREE consultations which can help you determine if franchise ownership is right for you.  Call us today to set your appointment!

Surprising Facts Learned at the Meet the Franchisor Workshop

Kensington Company & Affiliates would like to thank everyone who attended and/or contributed to last weeks "Meet the Franchisor Workshop."  We are pleased to announce that the feedback has been overwhelmingly positive. The franchisors reported meeting many viable candidates who expressed the intent to research and consider the franchise.  On the flip side, many people have scheduled their free consultation with Kensington Company & Affiliates to investigate which franchise may best suit their needs.

In speaking with the attendees, we found that the majority of them learned some surprising facts about franchise ownership.  Here are the ones mentioned most often:

• Franchises DO NOT have to be fast food restaurants! 
• 85% of franchises can be purchased for less than $250,000!
• Many franchises are available for less than the cost of a new car!
• Franchises can be service industries such as cleaning, painting, or staffing companies.
• Franchises can be educational companies such as day care, tutoring, or test preparation
• The franchise owner DOES NOT need to be experienced or skilled in the product of the franchise, in fact many franchisors look for people with business skills instead.
• Work from home franchises are available!
• No employees, few employees, or many employees are all options.
• Most franchisors help with financing!
• Displaced corporate executives tend to be very successful franchise owners.

Kensington Company & Affiliates offers a free consultation to help you determine if franchise ownership is right for you and if so, which franchise is right for you.  Not only is the consultation free, but there is no fee to the franchisee (you) throughout the entire process! There is no risk, only tremendous opportunity to create a life you will enjoy so call and schedule your appointment today!

 

Stress Management for Busy People

In honor of National Stress Awareness Day, which falls on April 16th, Kensington Company & Affiliates would like to share a relevant article written by Donna S. Stein, LCSW, RYT, Psychotherapist.

Stress Management for Busy People

Merely mention the topic of stress management and people grimace.  The word “stress” conjures up a variety of unpleasant images: workaholism, neck and back muscle pain, high blood pressure, irritability, agitation or restlessness, exhaustion, sleeplessness, a sense of dread, anxiety, depression and a suppressed immune system, to name a few.  There’s a sense that although most of us easily acknowledge carrying way too much of it in our daily lives, that there’s little that can be done to lessen it’s negative effects. Wrong! The question you may have to ask yourself is, “how bad does it have to get before you begin to put your health first?”. Fortunately for our bodies and psyches, relaxation practices, and coping skills can be learned and used to relieve chronic stress and lessen the dangerous cascade of stress hormones (adrenaline and cortisol) that keep us feeling on edge. Relaxing and shutting down an overactive stress response is one of the most important commitments we can make to our health and our sanity. We’ve all heard the professionals warn of the dangerous physical, emotional, and spiritual downside to a fast paced overloaded life.  The reasons to pay attention to the symptoms of stress are significant.  Simply put, your health and life may depend on it. 

Stress itself is not bad; in fact it’s normal. Life is full of positive and negative stressors (events that exert physical or emotional pressure), and the good news is that our bodies are well equipped to handle it.  In a perfect world, we deal with a short-term stressful event, it passes, and we return to business as usual.  Unfortunately, for most of us that is simply not the case.  Today’s stressors are often chronic rather than short term, direct and subtle, and subjective. Issues such as job insecurity, health, finances, childcare, eldercare, juggling the demands of work and family life, information overload and even our homeland security often have no clear conclusion or resolution. Concerns, worries, and fear lurk in people’s minds leaving people in a “wired and tired” state of overwhelmed bewilderment.  “Stress is not just something in your head,” advises Harold Bloomfield, M.D., Ph.D., noted author, psychotherapist, and psychiatrist. “It brings about profound physiological responses that lead to disease and disorder.” In other words, today’s tension headache or insomnia can contribute to tomorrow’s major illness.  It is an important preventive measure to heed our body’ signals early. We may not be able to change our world, however we can adjust or reaction to it, and potentially both lessen the harmful effects of stress and increase our sense of wellbeing now and down the road.

The following are simple lifestyle adjustments that may help your body-mind become more stress resilient, rebalance your overwhelmed nervous system allowing your battery to recharge and repair itself.  Taking charge of the things that make you stressed is not always easy, but it is always productive and will yield enormous physical and emotional payoffs.

1) Get enough deep sleep- One of the most common symptoms of too much stress is poor quality sleep.  Since sleep is a form of surrender, or letting go, it cannot be generated or forced.  The last thing a stressed hyper aroused mind wants to do is let go. Many of the suggestions below will assist this process. Learn what helps your mind and body let go of the day and slip into necessary, health promoting, deeply restorative sleep.

2) Basic R and R- This is nature’s way of recharging our energy reserves. Without proper relaxation the body and mind become overworked and inefficient, good health and peace of mind suffer. Take a break from high-stimulation, plugged-in environments to do something that you enjoy…garden, read, be outdoors in nature, sing, play with your pet, get a massage, tap your creative juices, listen to soothing music, take a power nap or a warm bath.

3) Establish a regular exercise routine- This is without question the best stress reduction tool available, loaded with physical and emotional side benefits. It will help facilitate easier restorative sleep, reduce the buildup of muscle tension and stress hormones, and help maintain good health.

4) Eat a wholesome nutrient rich diet- What, where, and how you eat will all have an important bearing on the state of your mind and body. Be mindful of the effects of caffeine and sugar on your particular physiology. Focus on health maintenance, weight loss can come later.

5) Certain vitamins help lessen stress’s effects by helping the brain produce more of the “feel good” hormones.  Nutrients and supplements also support a healthy lifestyle.  You really don’t want to add a nutrient deficiency on top of an already overloaded stress response.  Life is challenging enough.

6) Relaxation Techniques/Yoga Breathing/Meditation-These ancient mindfulness practices may seem esoteric, however they are simple, easy to learn, and can be incorporated into a modern and busy lifestyle with little effort or special equipment. Slow deep abdominal breathing interrupts the stress cycle and can help maintain a clear head that can more effectively problem solve and concentrate. These practices reliably increase the production of the calming hormones prolactin, melatonin, and serotonin, while decreasing stress hormone levels. Regular practice produces a wealth of positive results in mind, body, and spirit. Try taking a few long slow deep breaths followed by even longer, slower complete exhales next time you feel pressured.  It works!

7) Social Support- Supportive close relationships can offer emotional buoyancy and a place to let off steam while reigning in negative thinking.  If friends or family can’t offer the unconditional sounding board needed, consider seeing an empathic professional who can offer tremendous service if the burden feels too severe.

8)Cultivate A Positive Attitude/Spiritual Practice- Optimism and positive thinking are well worth cultivating even if you’re not the religious type.  The ability to find positive meaning in the inevitable adversity may be one of the reasons why actively spiritually oriented people cope better with challenge, and why they more often describe themselves as happier than those who do not engage in spiritual practices. When we cultivate an attitude that is not driven by approval or results we are better able to move with equanimity through frustration, fear and emotional pain. We become more skillful at dealing with stressful situations, rather than our own emotional reactions to them.

9) Goal Setting- Beyond acquisition and achievements, materialism and consumption, explore and strengthen qualities that bring enduring happiness: Loving-kindness, courage, composure, tenacity, generosity, insight and humor. When we operate from a place that embraces these qualities we experience liberation from the limited world of desiring “things”.

The above suggestions are most beneficial when practiced regularly. They quickly become self-reinforcing as we feel better when we apply them in our lives.  Their effects are cumulative and allow us to better cultivate the emotional resiliency necessary to more skillfully ride the waves of the inevitable stressful challenges we will face throughout life, allowing the possibility of experiencing more of the joy and happiness that is our birthright.

Qestions for the Francisors

Kensington Company & Affiliates will hold a "Meet the Franchisor" seminar on April 26th.  The seminar will provide a great opportunity to learn about a number of franchises and to speak directly with one of their representatives.  With this in mind, we are pleased to share the following helpful tips.

Strong and successful franchise systems don't sell franchises, they award them.  It is important to show the franchisor that you are a smart and capable prospect who is serious about their business opportunity and are motivated to be successful.  As much as you are evaluating the franchisor to see if they have a successful model and are a fit for your goals, they are evaluating you to make sure that you are somebody they want to work with and have in business using their name and system.

When speaking with franchisors it is very important to keep scheduled appointments and be interactive with the franchisor.  Remember that researching a business or franchise is a process.  You are not going to make your decision in one phone call, or one meeting.  You do not need to bombard the franchisor with all of your questions on one call.

It is a best practice to have specific goals and topics that you wish to cover with each scheduled contact with the franchisor.  Below is a list of suggested questions that should be discussed with the franchisor.  It is very important to take the information that you receive from the franchisor and discuss it with their franchisees to make sure there is no disconnect.

Here is a list of questions to bring with you when you meet with a Franchisor:

• How long have you been with the company and what is your background?
• Describe the industry you are in and the competition.
• Is this a growing industry?
• How sensitive is the industry to technological changes?
• Who are the competitors and what are the barriers to entry?
• How do you differentiate yourself from the competition?
• Make sure you understand the fees associated with the franchise.
• Is there a marketing fund and if so, how are the dollars collected and spent?
• How long have you been franchising?
• How many corporate units does the company own?
• Have any changes been made to the business model or system in the recent past?
• What are the costs to opening the business?
• What is your grand opening support? Have you had any failures in your system? WHY?
• How many units do you wish to award in the next year, three years, five years.
• Do I get a protected territory?
• What is the role of the owner in the business?
• Can you recommend some successful franchisees to speak with?
• Do you have an earnings claim? Please describe.
• What training and ongoing support do you offer?  Describe the experience of the management team.
• Does the franchisor have any plans to sell?  Go public?

Meet the Franchisor Workshop on 4/26/12

 

MEET WITH 7 TOP NATIONAL FRANCHISORS ON THE SPOT !

Don’t miss this popular workshop. Find out what it takes to purchase and operate your own franchise.. 

• Complimentary LUNCH.
• One-On-One time with TOP NATIONAL FRANCHISE REPRESENTATIVES.
• LEARN HOW TO FINANCE YOUR BUSINESS IN TODAY’S LENDING ENVIRONMENT.
• Learn how to find a business that is right for you.

Get up close and personal with the development teams of 7 Top-Rated Franchise Companies looking to grow on Long Island. These carefully pre-screened companies are searching for business professionals that are looking for the right opportunity to be their own boss.

Featured Franchise Resales
Kensington Company represents exclusive business resale opportunities. Whether you are looking for a Million Dollar facility or a home-based business visit us at our resale table.

If...

• You are in a career transition or considering one
• You want the freedom and control of owning your own business
• You have been or might be downsized or outplaced
• You are looking for financial security and independence
• You have always dreamed of owning your own business

Then this Workshop is for YOU!!!

You will...

• Learn how to find a business that is right for YOU
• Learn how to finance your business
• Have one on one time with Top National Franchise Executives

Thursday, April 26, 2012 from 5:30 PM to 8:30 PM (ET) FREE DINNER

 

Thursday, April 26, 2012 from 10:30 AM to 1:30 PM (ET) FREE LUNCH