GABB Class: Business Broker Models, July 13
Business brokers will learn how to set up their practice, identify and define their market, identify clients, conduct feasibility studies; recruit, supervise and train staff, and the ethics of different broker models, in this July 13 class presented by the Georgia Association of Business Brokers.
Business Broker Models will be offered both in person and via Zoom on July 13, and is part of the GABB’s Board-Certified Broker credential program. Students who successfully attend all three hours of the class and pass the test will be eligible for credit through the Georgia Real Estate Commission.
The class will be taught by former GABB president Michael Ramatowski, CBI, chief executive of RamBizGroup Business Solutions, a specialty M&A business brokerage firm. Mr. Ramatowski’s business brokerage profession began in 1992.
Michael Ramatowski, CBI
Mr. Ramatoswki’s clients include general brokerage and candidates for merger by acquisition from manufacturing, distribution, and service businesses. A longtime member of the GABB, he has owned and managed businesses that included a real estate master franchise, a property management networking company, and a service business. As COO of a banking conglomerate, he managed brokerage operations, title companies, home and service warranty programs, and a relocation company. Mr. Ramatowski has served on the board of directors of eleven different organizations with diverse specialties including real estate brokerage, mortgage companies, title insurance, banking, health care, and office supply operations. He served as an Electronic Specialist in the U.S. Navy Submarine Service. He attended Cleveland State University and Baldwin Wallace College. He has been awarded the Certified Business Intermediary professional designation by the International Business Brokers Association.
The class (GREC number pending) will be held from 9:30 a.m. until 12:30 p.m. at the classroom of the Georgia Association of Realtors at 6065 Barfield Rd, Sandy Springs, GA 30328. Per GREC rules, students arrive promptly and stay for the entire class are eligible to earn three hours of continuing education credit through the Georgia Real Estate Commission and the GABB’s Real Estate School, GREC #8074. Students who prefer to attend via Zoom must remain on camera; the link will be sent after you register.
The class will cover the sole proprietorship and enterprise business models of business brokering; market analysis; defining business buyer and seller clients; defining business types; and defining the overall market. Students will learn how to conduct a feasibility students of the financial health of a prospective business to be sold, including examining the income statement, as well as identifying areas where the prospective business could build wealth. In the final hour of the class, Mr. Rawatoswki will teach students how to conduct a feasibility study of the financial health of a prospective business to be sold, including examining the income statement, as well as identifying areas where the prospective business could build wealth.
The class fee is $49 for GABB members, $75 for non-members, and $225 to register for the BCB program and one class. Note that the BCB program is only open to GABB members. Contact GABB Executive Director Diane Loupe at diane.loupe@gabb.org or text her at 770-744-3639 for more information.
GABB BCB Classes
Form for GABB BCB Classes
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Using Retirement Funds to Buy a Business, May 25 GABB Meeting
Larry Carnell, ABI, CBI, CFB, CFE, Vice President of Business Development with Benetrends Financial
Gathering enough cash for a down payment for an SBA loan to buy a business or other business needs can be a challenge. Larry Carnell, ABI, CBI, CFB, CFE, Vice President of Business Development with Benetrends Financial, spoke to the Georgia Association of Business Brokers about how entrepreneurs can use their 401(k), IRA or other qualified retirement account to acquire capital to get approval for an SBA Loan to purchase a business. He also talked about an instant buyer engagement program on how to use cash or retirement funds to help exempt buyers from future capital gain taxes (and proposed increases) and potentially double net inheritance for spouse/children/family.
View a video of the entire meeting on the GABB YouTube channel.
Larry Carnell is a national award- winning entrepreneur and management consultant, as well as a respected business and funding expert at Benetrends. Carnell’s company has programs that allow investors to use part or all of their existing retirement accounts to fund a required down payment for an SBA Loan.
By using long-standing provisions of the Employee Retirement Income Security Act of 1974 (ERISA), Carnell’s company uses a corporate capitalization strategy that enables 100% of the gain on the sale of the company to be tax free. To use this strategy, the business owner rolls over a portion of the funds from a qualified plan or IRA to start a business. When it’s time to sell the business, you may be able to pay no Federal and State tax on any gain from the sale of the business. Up to 100% of the gain can be invested to gro
w tax-free, including making an investment in another business, according to Carnell.
Carnell also discussed Rollovers as Business Startups or ROBS plan, first introduced by Benetrends Financial as The Rainmaker Plan® in 1983. A ROBS plan is a debt- free funding solution that allows a person to draw from their retirement funds without incurring upfront taxes or early withdrawal penalties. A ROBS plan allows business owners to use their retirement funds, tax-deferred and penalty-free, for the purchase or startup of their business, using a four-step process. He also discussed a Roth Advantage Plan, or RAP.
Advantages of ROBS and RAP plans and similar strategies, according to Carnell, include:
- Increases client engagement (including spouse)
- Superior wealth accumulation & protection (retirement assets cannot be seized by creditors)
- Superior tax benefits (capital gain, income and payroll taxes on retirement contributions)
- Reduces debt and interest payments, Improves cash flow
- Investment NOT a loan – NOT subject to credit rating
- Does NOT adversely impact debt ratios or credit scores
- NOT subject to business profitability
- SBA approved as down payment / equity injection OR used alone
- Improves loan approval rates
- Improves debt ratios Debt free money (SBA approved)
- Improves post close liquidity
- Can be used to leverage BIGGER deal – (Business AND Land) & Broker Fees
- IMPROVES CLOSE RATE
Traditional ROBS features:
- PRETAX use of retirement funds to invest or purchase company stock
- C CORP retirement plan adoption [401(k), hybrid or custom options]
- Retirement Plan BUYS common stock in company
- Company GROWS. Revenues are used to run business. From Profits:
- 401(k) contributions are made NET of payroll taxes (currently 15.3% and rising)
- Rainmaker retirement contributions are EXEMPT from payroll taxes
- Company is SOLD – ‘pretax’ proceeds go into retirement plan
- Proceeds are taxed in the future at future tax rates (expected to rise)
Benetrends offers a NEW Rainmaker/Roth Advantage Plan:
This plan allows business owners to realize the full appreciation of their business tax-free upon the sale of the business, given certain circumstances following the Tax Reduction and Job Creation Act of 2018 (TRJC).
- Cash (minimum of $10k) OR Retirement Funds to invest in company stock
- C CORP creates & adopts 2 CUSTOM retirement plans
- Rainmaker [not a traditional 401(k)] & Rainmaker Roth 401(k)
- Use custom plans to create structure that invests money POST-TAX to BUY common & preferred stock (Taxes due NEXT Year OR 5 year option)
- Company GROWS. Revenues are used for operating expenses
- Retirement contributions are often payroll tax EXEMPT (currently 15.3% and RISING)
- Company SOLD – proceeds forever TAX-FREE & Lifetime protection (no RMDs)
View the PPT presentation of this plan.
CARNELL Rainmaker Advantage Program GABB CLIENT Outline LC
Lenders are finding that these resources are creating enhanced motivation for business ownership, according to Carnell. The perceived security of a job often discourages people from assuming the risks associated with buying or starting a business. When presented, these resources are proving to be effective in helping to engage more borrowers, improve lending approval rates, reduce defaults and leverage larger loans by providing greater access to liquid capital for injection needs, thereby reducing borrowers’ fears while creating dramatic benefits for both the borrower and lender.
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Georgia Added 24,000+ Jobs in Early 2021
ATLANTA, GA—More than 24,000 jobs were created across all regions of Georgia by economic development projects in Georgia during the first three quarters of fiscal year 2021, the Georgia Department of Economic Development (GDEcD) announced. These projects total over $8.43 billion in new investments, representing a 67% increase in new investments compared to the first nine months of the previous fiscal year. Likewise, job creation is up 49% over the same period during fiscal year 2020.
“Creating high-paying jobs for hardworking Georgians – no matter their zip code – has been a key priority of mine since day one,” said Governor Brian P. Kemp. “These numbers show that our continued, targeted investments in K-12 education, workforce development, and innovative partnerships are doing exactly what they’re supposed to – delivering opportunities to Georgians in every corner of the Peach State.”
During the third quarter of the fiscal year between January and March 2021, Georgia also further solidified its position as an internationally recognized tech hub and data center region with game-changing commitments from Airbnb, The Adecco Group, and Google. Microsoft also announced plans to build on their existing Georgia footprint to develop one of the company’s largest hubs in metro Atlanta. The company will also establish new data centers in Fulton and Douglas counties. Georgia’s significant fiscal year-to-date totals do not include complete details on the expected investments and job creation totals from Microsoft or Airbnb.
Georgia business expansions accounted for 68% of all projects and total investments as companies chose the state as the best locations for growth. New locations to the state accounted for 58% of new jobs in economic development projects from July 1, 2020, through March 31, 2021.
Food processing, manufacturing, and logistics and distribution industries in the state continued their robust pace of development, accounting for 63% of jobs created by economic development projects. Georgia’s automotive and information and technology industries also continued to flourish, accounting for nearly 5,000 new jobs generated three-quarters into the fiscal year.
A few examples of newly announced projects across the state include Freshly opening their first Southeastern U.S. facility in Cobb County, Sailfish Boats expanding in the southwest Georgia city of Cairo, and Feit Electric investing in their first East Coast distribution facility in McDonough. Brake pad supplier KB Autosys selected Meriwether County in west Georgia for their first U.S. automotive manufacturing facility, near customers in the region, such as Hyundai, Kia Motors Manufacturing Georgia, and General Motors.
“Georgia’s economy is diverse, promising, and continuing to gain momentum,” said GDEcD Commissioner Pat Wilson. “One year ago today, we faced an extremely volatile and uncertain economic future. I extend my thanks to all of our private and public sector partners for the incredible amount of resilience they have shown and for helping us maintain Georgia’s position as the No. 1 state to live, work, and raise a family.”
To view state announcements from the first three quarters of the fiscal year, visit www.georgia.org/newsroom.
About GDEcD
The Georgia Department of Economic Development (GDEcD) is the state’s sales and marketing arm, the lead agency for attracting new business investment, encouraging the expansion of existing industry and small businesses, locating new markets for Georgia products, attracting tourists to Georgia, and promoting the state as a destination for arts and location for film, music and digital entertainment projects, as well as planning and mobilizing state resources for economic development. Visit www.georgia.org for more information.
The Top Ten Ways to Avoid Wrecking a Deal
Finalizing a deal is usually a complex process with lots of room for error, misunderstandings, miscalculations, and good old-fashioned wild cards. That’s why it is critical to carefully think through the deal process well in advance. In this article, we’ll explore the top ten steps you can take to avoid wrecking a good deal.
- Confidentiality – Topping our “how not to wreck a deal list” is confidentiality. Everyone involved in the deal MUST take steps to avoid a breach. Experienced business brokers are experts at maintaining confidentiality.
- Flexibility – Inflexibility can absolutely destroy a deal. You shouldn’t go into a deal expecting to have all of your terms met.
- Be Open to Negotiations – Sellers are used to being their own bosses, but when it comes to successfully selling a business, no factor is quite as important as a willingness to negotiate.
- Advance Preparation – Sellers should have several years of well-prepared records and legal and accounting documents on hand. You can be 100% certain that any serious buyer will want to see your records and take a look at your financials.
- A Reasonable Selling Price – An inflated price will decrease the number of buyers that take a serious look at a business. Additionally, an unreasonable price may make a seller look uninformed. Business brokers and M&A advisors are experts at handling valuations. One of the single best ways to boost your chances of finalizing a sale is to establish a fair and justifiable price for your business.
- Maintain Operations – Far too often sellers lose track of the day-to-day operations once their business goes on the market It is absolutely vital that sellers continue operating their business as though it may never sell. It can take months or years to sell a business. The last thing any seller wants is for their business to lose value when they are in the process of trying to sell.
- Keep up the Momentum – A lack of momentum can kill a deal. Working with a business broker or M&A advisor is an easy way to make sure you maintain momentum throughout the process.
- Consider Your Buyer’s Needs – Serious buyers will need a variety of information from sellers in order to obtain financing. You can expect buyers to need appraisals of assets, information on environmental regulations, and more. Sellers should have this kind of key information ready and waiting.
- Encourage Competition – In general, it is a good idea to create a competitive situation – one in which prospective buyers know that there is more than one interested party. Brokerage industry professionals understand the delicacies of presenting this information.
- Seller Participation – Finally, sellers must stay involved in the entire process, and that includes being willing to help buyers during the transition. Showing a willingness to help during the transition period will help to foster goodwill and trust.
There are many reasons why a deal could potentially fall apart. You may not be able to control every single variable, but by following the ten key tips outlined in this article, you will be well on your way to increasing your chances of successfully completing a deal.
Copyright: Business Brokerage Press, Inc.
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Buying and Selling Businesses in a Pandemic: GABB Feb. 23
Despite the challenges posed by the pandemic in 2020, many Georgia business brokers continued to sell more than a million dollars worth of businesses. GABB board member Tanya Nebo and six members of the GABB Million Dollar Club offered a wide variety of advice on Tuesday, Feb. 23, during a panel discussion of how to buy and sell businesses during a pandemic.
To view their comments on how they prospered in 2020, watch this video posted on GABB’s new YouTube channel.
Among the 2020 members of the GABB’s Million Dollar Club who will be on hand on Feb. 23 are Jefffery Merry, senior business analyst at the BUSINESS HOUSE, inc.; J. Snypp, Vice President of Preferred Business Brokers, Inc.; Matt Wochele, founder of Preferred Business Brokers, Inc.; Rob Margeton, an M&A Intermediary with Ryco Advisors, LLC; Brian Judson, a business broker with Best Business Brokers; and Jon Roman, business intermediary, franchise consultant and developer at Transworld Business Advisors.
Ms. Nebo is both a business broker and an attorney. Her law practice, real estate agent and business brokerage services focus on commercial real estate, franchising and general business matters (including joint ventures and equity participation models). She is a graduate of Columbia University in New York and the University of Virginia School of Law.
The GABB is the state’s premier association of professionals who help in the purchase and sale of businesses. GABB is committed to promoting professionalism, education and high ethical standards in the profession of business brokering.
For more information, contact GABB President Judy Mims at 404-842-1997 or judy@childcare.properties, or Ms. Loupe at diane.loupe@gabb.org or 770-744-3639.
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