By Holly A. Magister, CPA, CFP®

Before I share with you part two of my story about my own need to execute the business continuity plan as a result of my sudden and extended illness, I want to thank those of you who reached out to me to express your concern for my welfare.  Thank you.  Truly, I am doing very well and I very much appreciate your good wishes!

As I shared in my last blog post about business continuity planning, the need for a woman in business to plan carefully for a possible unexpected interruption to her business is real.  Things happen.  And when they do, you have no way to go back and say, gee let’s get this or that in place…It’s simply too late.

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By Holly A. Magister, CPA, CFP®

Recently I found myself looking around for a candid camera and asking “is this really happening?” You see, over the past three weeks or so, my own business continuity plan has been tested and tested and tested again.

I live to share my story and to encourage other women in business to be prepared.

Planning for What You Think Will Never Happen to You

Working with business owners who plan for the sale or transfer of their business to others gives me the opportunity to really get to know my clients. One very important part of our planning process is to work with the business owner as they decide how to protect their business in case of their incapacity and how to transfer their estate to others after they pass away. This is where my story begins.

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By Holly A. Magister, CPA, CFP®

If I have said under my breath once, I have done so at least one hundred times… “The devil is in the details!”  As we work with business owners and deal makers on the hunt for profitable businesses to acquire, this expression has become our theme song!

Recently, we have been working closely with one of our clients while they sorted out the details from documents dating back several decades to the language drafted into a Letter of Intent negotiated about six months ago.  And every word, literally—every word in between, has been scrutinized. 

Hard work?  Yes. 

Exhausting?  Of course. 

Rewarding?  Absolutely!

So, with several thousand pages of documentation, where are the details that matter?   

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By Holly A. Magister, CPA, CFP®

Bankers and Entrepreneurs rarely see eye-to-eye.  Recently, my observation of this unfortunate reality caused me to chuckle as I sat with one of my clients and her business banker.  What made me laugh was how two extremely accomplished individuals could define the term “special assets” so differently.

Before I explain, I want to paint the whole picture for you.

My client has an incredible business employing more than 90 people.  She started with three only seven years ago.  And at that time, the bank let her borrow $50,000 after she and her husband signed a personal guarantee secured by the equity in their $140,000 home.  That would also be the same home that my client and her husband reside and raise their three children in. 

Over the years, this entrepreneur managed to bootstrap the business into a $19 million dollar business.  And over those years, the bank stuck by my client, increasing the company line of credit to the multi-million dollar level. 

In early 2008, life was incredibly good for this entrepreneur.  Her home mortgage was paid off and receiving unsolicited offers to acquire her successful business was a common occurrence. 

We all know what happened in late 2008 and like most, this business was hit very hard.  Not hard enough to close the doors, however, hard enough to bleed red ink all over their otherwise pristine financial statements.

Even though this banker grew his relationship from a $50,000 signature loan to a $2.5 million dollar line of credit and the company average daily checking account balance exceeded $500,000, he was not happy.  And his boss was not either.

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By Holly A. Magister, CPA, CFP®

Working with business owners offers me an incredible window into the world and ways good people think and act.  It is such a wonderful pleasure to be part of the lives of successful women entrepreneurs!

Recently, small business owners and people who start a business were identified in both the Rasmussen Reports and the Harris Poll with the highest favorability ratings.  These two reports confirm what I have observed for decades.  Entrepreneurs are good people who work very hard, create opportunities and help others succeed.

Just last week I listened to a lifelong entrepreneur explain to her Attorney why she was allocating a substantial portion of her business sales price to be paid to her employees.  Several of those employees no longer work for her company.  In fact, they left the company’s employ many years ago.  So, why would a woman entrepreneur divert several million dollars from the sale of a business to others, when a written contract does not require it? 

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