Calhoun Companies

Blog

Take a look at Calhoun Companies' blog written by our business brokers in Minnesota for advice & guidance in buying & selling a business!

Subscribe to feed Latest Entries

Star Tribune: Minnesota sees strongest M&A action since 2007

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 26 January 2015 Category Industry 0 Comments

Calhoun Companies’ president, Andy Kocemba, recently shared his insight about the Twin Cities deals market with Star Tribune business reporter Neal St. Anthony. Andy spoke about one of Calhoun's most successful deals which is a great example of Calhoun Companies' dedication to helping real business owners achieve what matters most to them in a deal. Read below for the full article and Andy's insight on 2015’s mergers and acquisitions market in the Star Tribune.

 

ToolKraft

Gary Hadley is president of MultiSource, which bought ToolKraft in Fridley last summer. MultiSource wasn’t the highest bidder but offered the best future for ToolKraft’s workers, said former owner Roger Zbikowski.

 

Roger Zbikowski wasn’t positive he was going to sell until he got the offer he couldn’t refuse for ToolKraft, the high-precision machine factory in Fridley that his late father started in the 1970s.

“The company was a project we built together,” Zbikowski said. “After he died about 3½ years ago, I just didn’t have that feeling for the business anymore. And I have no kids, no next generation to pass the business on to.

“I’m pulling out earlier than I expected. But it’s a fantastic time to sell a profitable company that weathered the recession. We reduced hours, but I didn’t lay off one employee or cut benefits. This is a highly trained group, and we needed to retain them. When business came back, we were ready to go.”

Zbikowski, 55, accepted the offer last summer of Gary Hadley’s MultiSource, the growing contract manufacturer that kept the nearly 40 ToolKraft employees. The addition expanded MultiSource’s capabilities, with an eye to expanding the former ToolKraft, now known as MultiSource’s Fridley division.

Zbikowski indicated that MultiSource was not the highest bidder, but came close to his price and offered the best future for employees.

That was just one of the 416 deals announced last year in which a ­Minnesota company was a buyer or seller, making 2014 the most active mergers-and-acquistions year locally and around the country since 2007, before the Great Recession.

“The trends we currently see from the Twin Cities make us optimistic for 2015,” said Andy Kocemba, president of Calhoun Companies, the Edina business brokerage that represented ToolKraft. “Buyers and sellers are gaining confidence and local small businesses are performing increasingly well.”

Generally, growth in the buying and selling of companies, as well as increased levels of equity capital raising, are indicators that corporate ­sellers are confident that they can get a good price. And the acquirers, either financial buyers such as private equity investors or strategic buyers seeking to expand or deepen their businesses, have ­confidence that they are buying a decent firm that can deliver improved performance in an improving economy.

Nationally, mergers and acquisitions hit the highest annual volume on record with $1.61 trillion worth of deals announced in 2014, up 42 percent from 2013 and exceeding the previous high of $1.57 trillion in 2007, according to Dealogic.

“This [2014] was the first year of four good quarters in a row since the recession,” said Matthew Knopf, head of the M&A business at Dorsey & Whitney, which represents such companies as UnitedHealth Group, Mosaic and Medtronic, which have been active. “In the past, there was always fear about the economy or government shutdowns or something,” that would shut down the deal pipeline for a quarter or two.

“It’s hard to have four good quarters in a row,” Knopf added. “I haven’t worked harder in a long time, particularly in the fourth quarter. ­People wanted to get things done. If people were ­worried about the economy you wouldn’t see that.”

Significant fourth-quarter transactions included:

• Graco Inc. selling liquid finishing business assets to the Carlisle Companies for $590 million. Minneapolis-based Graco had acquired those assets from Illinois Tool Works in 2012, but had to sell the business after the Federal Trade Commission required Graco to divest liquid finishings over industry concentration issues. Graco used proceeds of the divestiture to make four additional acquisitions in January, including the $160 million acquisition of Pennsylvania-based High Pressure Equipment.

• Thomas McNerney Partners, a health care venture capital firm based in Minneapolis, was part of consortium of 13 investors who invested in InVitae Corp. a San Francisco genetic information company. The $120 million financing was one of the largest venture capital investments of a Minnesota firm last year.

• Olson, one of the largest advertising and marketing agencies in Minneapolis, announced it will be acquired by ICF International, a Fairfax, Va.-based professional services firm. The deal was valued at $295 million and the two firms said the 545-person Olson agency would operate as a stand-alone unit of ICF.

• UnitedHealth Group announced it would acquire Alere Health of Atlanta and closed the deal on Jan. 19. Alere provides rapid diagnostic tests for infections diseases and toxicology. Alere will become part of UnitedHealth’s Optum health services arm adding to Optum’s portfolio of health management services. The deal was valued at $600 million, the largest announced deal of the fourth quarter.

• The Pohlad Companies announced that it will sell Marquette Financial, the last of the banking empire founded by the late Carl Pohlad, to UMB Financial of Kansas City for about $190 million in stock. The properties are in Arizona and Texas. The Pohlads previously sold their Minneapolis-based banks to what are now U.S. Bancorp (1991) and Wells Fargo (2001).

Also in the fourth quarter, the $570 million sale price was disclosed for Henkel’s acquisition of the Bergquist Co. of Chanhassen, a deal that was announced in the previous quarter. The low-profile Bergquist, a maker of thermal insulation for electronics founded by Carl Bergquist 50 years ago, had revenue of about $200 million and employs about 1,000 at several Minnesota and Wisconsin plants.

Francis Murphy, Minneapolis-based director of transaction services at KPMG, the accounting and advisory firm, said the merger-advisory business is strong.

“We’re seeing an uptick in Twin Cities deal volume,” Murphy said. “The sectors that have been busy nationally have been busy locally: health care, technology, industrial products. The trends in health care and pharmacy and life sciences are drivers here.”

Neal St. Anthony • 612-673-7144

Read more on StarTribune.com

Tags: transactions, deals, brokerage, small business, selling, buying, M&A
Read More Hits: 17

The Business Journals: Strategies for buying a business without risking long-term regret

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Friday, 23 January 2015 Category Buyers 0 Comments

Calhoun Companies President and Co-owner, Andy Kocemba, is a contributing writer for The Business Journals. Every month he will provide tips on making the most of your small business.

Biz Journal 2

I like to say that buying a business doesn't happen by accident.

There are challenges, hiccups or "gut-check" instances throughout any transaction, and it takes a truly committed buyer to get a deal done.

As a business buyer, how do you know you are committed to the right deal? Here are two major ways to purchase a business without risking long-term regret.

 

Read about the ways to purchase a business without risking regret on the Business Journals website.

 

Tags: buying advice, buying strategies, small business, purchasing, buyers
Read More Hits: 38

Five New Year’s Resolutions Every Business Person Should Make

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Tuesday, 20 January 2015 Category Industry 0 Comments

Every New Year, millions of people make resolutions to improve themselves – lose weight, quit smoking, help others. Odds are, you’ve probably made a few resolutions of your own. However, you may not have made them for your company. If you didn’t, now is the time business owners should make resolutions to help their businesses thrive.

Ian Altman, CEO of Grow My Revenue, LLC, recently shared his suggestions for five resolutions every business person should make.

1. Know how to describe why people need your help.

It’s easy for small business owners to describe what they do, but not always why it matters. To run a successful business, resolve to explain why, and when, people may need your company.

2. Define three intermediate steps for a long term goal.

Achieving your goals is much easier if you establish an action plan first. You don’t have to lay out every milestone, but define the first three steps to get you started. For example, if your goal is to expand your business by entering a new market, your first steps might be:

1) Define the problem you solve for that market.

2) Identify three clients who would be influential in capturing your market.

3) Make a list of the first 10 clients you plan to approach to validate the market.

3. Don’t complain, act.

Things will not always go your way. Don’t allow yourself to be the victim. Think about what you can do to overcome obstacles, then do it. Once you overcome one major obstacle, you’ll start seeing potential in overcoming what seemed like even bigger challenges.

4. If you don’t like the weather, change your environment.

Life is too short to deal with jerks. If you work for a bad employer, or if you have a bad client, it might be time to move on. Define a plan to improve your situation and act on it.

5. Increase your value to your friends and coworkers: be a great teacher.

The best thing you can do in 2015 is to establish yourself as a subject matter expert. Make yourself valuable by being helpful and providing content that answers your clients’ and coworkers’ questions.

 

How are you doing on your New Year’s resolutions? Tell us about it in the comments below.

Read more on Forbes.com.

 

 

Tags: business, small business, lessons, Resolutions
Read More Hits: 911

Minnesota Business Magazine: Buying and selling of small businesses on the rise

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Wednesday, 14 January 2015 Category Industry 0 Comments
More qualified buyers and motivated sellers stimulate the market
 

By Erica Rivera
01-13-2015

andyIf you’ve been thinking about buying or selling a business, 2015 just might be the year to do it. A recently released nationwide survey conducted by BizBuySell shows that sales and purchases of small businesses are at record high levels since that online marketplace began tracking such statistics in 2007.
 

Increases in qualified buyers, motivated sellers, financing availability, and confidence are responsible for the uptick in small-business transactions. According to a Wells Fargo/Gallup Small Business Index Survey, small-business optimism was also on the rise in 2014. Seventy-one percent of business owners surveyed reported “expecting their overall financial situation to be very or somewhat good over the next 12 months.” Small-business owners also reported plans to invest more in their companies and to increase the number of jobs in those companies. Overall, the survey concluded that “small-business owners are the most optimistic they have been in more than six years, and business owners are feeling the most upbeat about the year ahead since the start of the Great Recession.”

Calhoun Companies, an independent business brokerage serving the Twin Cities area and the Upper Midwest since 1908, has felt the recovery firsthand. Its 2014 transactions totaled 48, with one-quarter of them exceeding $1 million. “What the government would classify as ‘small businesses’ that we deal with are families, so that optimism and confidence comes into play very strongly in these situations,” says Andy Kocemba, president of Calhoun Companies. One might assume Baby Boomers going into retirement are responsible for the increase in sales, but Kocemba says the market isn’t seeing that full effect just yet. “Third quarter, nationwide, Baby Boomers were the top sellers — but they were also the top buyers.”

As the financials change, so do the reasons for selling a business. Company owners, Kocemba says, are “returning to the more traditional reasons for selling, primarily retirement. During the recession, retirement accounts and savings were hit and business values diminished in such a way that people weren’t able to retire. If they wanted to sell, or did sell, it was other reasons beyond retirement that was motivating them.”

Regardless of the reasons for selling, sellers are asking for more and receiving more. BizBuySell reports that the median asking price for small businesses in Q4 of 2014 was $224,990, up from $200,000 the previous year. Sales prices also rose, from $175,000 in Q4 of 2013 to $200,000 in Q4 of 2014. Median revenue and cash flow were also at record highs (since 2007) at the end of Q4.

Ultimately, these survey numbers are a guidepost indicating that the market is good and getting better. Whether you should buy or sell is a personal decision made on a case-by-case basis. “Our business is much less dollars and cents and numbers and analytics than you might think,” Kocemba says. “It’s more of a gut-based feeling, relationship kind of business.”

Tags: BizBuySell, 2015 Outlook, small business, brokerage, Q4
Read More Hits: 84

Press Release: Record-Setting Year for Sale and Purchase of Small Business is Positive Indicator for 2015

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 12 January 2015 Category Industry 0 Comments

logo top new

 

 

 

 

For Immediate Release:
January 9, 2015

Record-Setting Year for Sale and Purchase of Small Business is Positive Indicator for 2015

Calhoun Companies Averages Nearly $1 Million per Small Business Sold in 2014

 

EDINA, MINN., January 9, 2015 – In a nationwide survey conducted by BizBuySell, 67 percent of business brokers reported a year-over-year increase in transaction activity in 2014. This is consistent with reports that indicated 2014 was on track to record the highest number of small business transactions since 2007. In 2014, Calhoun Companies completed 48 transactions with more than 25 percent of those transactions surpassing $1 million.

“We regularly track these national trends and evaluate the extent to which they reflect what’s happening in the Midwest market,” said Andy Kocemba, president of Calhoun Companies.

In the fourth quarter alone, Calhoun Companies closed 15 transactions, representing more than $10 million in sales. Overall, the company ended 2014 with transaction totals of more than $47 million. The average price each business sold for increased from 2013, and included 13 deals exceeding $1 million.

The main driver of growth in 2014 was an increase in the number of qualified buyers, drawn in by an overall increase in small business performance and confidence. According to the Wells Fargo/Gallup Small Business Index, in the fourth quarter of 2014, small business owner optimism increased to 58, up 34 points from this time last year. An increasing number of sellers and an improved overall small business environment were also significant contributors to growth in 2014. These trends are expected to continue into 2015.

“The trends we are currently seeing from the Twin Cities make us optimistic for 2015. Buyers and sellers are gaining confidence, and local small businesses are performing increasingly well,” said Kocemba.

The highest levels of optimism among brokers occurred in the Midwest and Eastern regions, with 22 percent of respondents expecting transaction levels to significantly improve. Nationwide, 82 percent of brokers expect transaction activity will improve in 2015. Surveyed brokers also expect sold businesses will command a higher price in 2015 due to an increase in overall business performance.

About Calhoun Companies

Calhoun Companies is a leading independent business brokerage serving the Twin Cities area and the Upper Midwest since 1908. Specializing in business valuation, buying and selling businesses, and commercial real estate, the team at Calhoun confidently connects buyers and sellers through a successful transaction. Current listings and additional information included on the Calhoun Companies website.

###

Tags: brokerage, industry trends, small business, press release, Q4
Read More Hits: 2102

Calhoun Companies' Best of 2014

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 05 January 2015 Category Industry 0 Comments

At the start of every year, we all take a moment to look back on the things we’ve accomplished and the lessons we’ve learned in the previous year. In this spirit of reflection, Calhoun Companies would like to take a look back at our most popular blog posts featuring top brokerage tips, small business advice and business news from 2014. Click on the title of each blog post to read more.

  • Five Ways to Not Hate Public Speaking - As you become more and more successful as a business owner, chances are you'll be asked to speak in front of a group of people about your product or service. To some, this provides a great thrill, but to most, it provides anxiety, stress and fear. 
  • Minneapolis is a Top City for Women Entrepreneurs - Financial website NerdWallet revealed the top 10 cities for women entrepreneurs, and Minneapolis landed at spot number four in 2014.
  • Selling Your Business Can Take an Emotional Toll – Judith Glaser, an executive coach who has trained many business owners through transitions, likens the depression some sellers feel to the post-partum blues. She says that when someone else comes and takes your (former) business in a new direction, it's "like performing plastic surgery on your child."
  • Small Business Owners are Feeling Good - In January 2014, the Wells Fargo/Gallup Small Business Index hit its highest level in five years. Small business owners reported improved cash flow and a brighter outlook for revenue and earnings.
  • EMyth Shares Small Business End-of-Year Tax Tips – CPA Martin Kamenski provides tips and a brief explanation of some of the more common tax deductions small business owners may be able to utilize.
  • Three Traits Needed to Lead Your Company - Boris Groysberg, a professor of business administration at Harvard Business School, surveyed senior search consultants at a global executive placement firm to find out what headhunters are looking for in leaders.

Remember to subscribe to our blog to stay up to date on the latest small business tips, brokerage advice and local business news. Here’s to a successful 2015!

Tags: tips, small business, 2014, recap, selling, buying, brokerage, advice, business advice
Read More Hits: 2710

Calhoun Companies Agent Spotlight: Don Orke

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Wednesday, 17 December 2014 Category Industry 0 Comments

Get to know our Calhoun Companies agents!

Each member of our staff has the unique knowledge and experience necessary to help you make a mutually beneficial business deal. Whether you are looking to jumpstart your future by buying a business, or sell your business to the best buyer possible, these are the men and women who make it happen.

 

Don Orke

Family: Wife Karen, one daughter and grandson, two stepsons

Education: BS, MS, University of Minnesota

Home: Plymouth, MN

Organizations: MN Lodging Association, Wisconsin

 

don orkeHow many years have you been working at Calhoun Companies?

13 years

What type of businesses do you like to work with?

Motels/Hotels

What is one of your most rewarding memories or the thing you like most about working at Calhoun Companies?

The opportunity for success

Where can people find you on the weekends? Or during a Minnesota summer?

Fishing, hunting, wildlife photography

If you had tickets to a concert, who would you like to see?

Josh Groban

What is one food item that you couldn’t live without?

Chocolate

What’s the best gift you’ve ever received?

The opportunity to attend the University of Minnesota

If you had to choose another job, what would it be?

A retirement that would include teaching my grandson about nature and the joys of outdoor recreation.

Tags: agent spotlight, don orke, agents
Read More Hits: 3786

The Business Journals: 3 Reasons Why Family Succession May Not be an Exit Strategy

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 15 December 2014 Category Industry 0 Comments

Calhoun Companies President and Co-owner, Andy Kocemba, is a contributing writer for The Business Journals. Every month he will provide tips on making the most of your small business.

Biz Journal 1

It seems just about every week there is a different seminar, webinar or blog that comes through my email inbox pertaining to succession planning. The experts want to share how to best transition your business to the next generation.

But what if transitioning the business to your children is not in your best interest, their best interest or the company's?

Here are the top three reasons why you may want to look to an outside buyer when it becomes time to transition out of your company.

 

Read more about why family succession may not be your exit strategy on The Business Journals website.

 

Tags: Succession, small business, planning, selling
Read More Hits: 297

EMyth Shares Small Business End-of-Year Tax Tips

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Wednesday, 10 December 2014 Category Industry 0 Comments

As 2014 comes to a close, small business owners often start thinking about end-of-year taxes. We recently found an informative article on EMyth.com that offers advice on what deductions small business owners may be able to utilize.

In the article, CPA Martin Kamenski provides tips and a brief explanation of some of the more common tax deductions small business owners may forget.According to Kamenski, deductions for small businesses could include: the use of a home office, travel expenses, year-end spending, inventory donations and the small business health care credit.

To read Kamenski's tips and explanations, visit EMyth.com.

Tags: small business tax tips, small business tax advice, advice, tax tips, tips, tax, deductions, year-end bill, industry, small business, taxes
Read More Hits: 4325

Minnesota Business magazine: More Small-business Owners Selling Companies -- and Learning Lessons Along the Way

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 08 December 2014 Category Industry 0 Comments

As economy rebounds, brokerages report better-performing businesses, more cash-ready buyers, and more sellers in the marketplace.

By Dan Emerson, Minnesota Business

11-20-2014

andyRegardless of industry, target market, or other factors, no one stays in business forever. For most entrepreneurs, the ideal outcome is selling the business at the “right” time — however that may be defined — for a nice profit.

Of course, business deals don’t occur in a vacuum. Current conditions in a given industry and the overall economy have a major impact on transactions, helping determine the size of the prospective buyer pool, negotiating challenges, and ultimate sale price. The recent recession had a dampening effect, but the rebounding economy has led to increased sales-and-acquisition activity, as reported by business brokers.

Andy Kocemba, president of Edina-based Calhoun Companies, Minnesota’s oldest and largest business brokerage, has experienced the uptrend firsthand. He cites several reasons for it, as listed by the International Business Brokers Association: more cash-ready buyers in the market; better-performing businesses, which makes them more attractive to prospective buyers; more confidence and less uncertainty among buyers; and more sellers in the marketplace.

The recession not only had a negative impact on business performance, but it also took a bite out of retirement accounts, causing many company owners to postpone selling. Recently, “more business owners have been able to build back up to where they once were and are again in position to sell,” says Kocemba, who runs Calhoun Companies along with his father, Wally Kocemba.

One of the first steps in considering the sale of a business is usually enlisting the help of a qualified business broker. The latter can access and market to the business-for-sale marketplace, navigate the universe of potential buyers, and achieve the desired outcome.

“Our business is about connecting people and building trust, because to some degree the buyer and seller are working together,” says Kocemba. “They have a common interest in seeing the deal succeed.”

The broker’s focus on getting the deal done allows the business owner to concentrate on running a successful business. “It’s a process that does take some time, and if a business owner loses focus and drops the ball for even a few months, that can have a negative effect on the numbers,” Kocemba points out.

According to Craig Arends, a business broker, CPA, and partner with Minneapolis-based CliftonLarsenAllen, one of the crucial steps in selling a business is arriving at a fair, realistic, and empirically supported valuation for the enterprise. It’s also an area with potential pitfalls. Less experienced owners, he notes, sometimes make the mistake of starting with an arbitrary target price. “Someone might say, ‘My company is going to be priced at eight times EBITDA.’ ” But valuation, he says, is based on a number of factors, including recent, current, and projected revenue growth; industry trends; degree of customer concentration; and quality and age of the management team.

Also, “transition date” and “retirement date” are often negotiable points in a merger or acquisition deal, Arends notes. Typically, a buyer will be willing to pay a little more for a management team and ownership that is going to stick around, if only on a temporary basis. “If the seller’s group retains some percentage of minority ownership and has ‘skin in the game,’ that will give you greater valuation, as well,” he says.

Small-business acquisitions are most often financed by a bank, with a combination of cash-down and seller-financing, according to Kocemba. His firm often uses business acquisition loans from the U.S. Small Business Administration, which can generally qualify up to 70 percent of the loan amount. In a typical case, the buyer might make a 20 percent down payment, with the seller financing another 10 percent. Helping buyers secure suitable financing is another one of the broker’s functions.

Kocemba counsels business owners that “it’s never too early to start thinking about selling your business. Even if you are only a few years into a startup, you should always have an exit plan in mind, because — one way or another — every owner eventually leaves the business.” Following, the stories of business owners who recently sold their companies — and the lessons they learned along the way.

 

To read the rest of the article in Minnesota Business, click here.

 

Tags: Minnesota business, sellers, small business, lessons, industry, tips, business advice, advice, selling a business, selling
Read More Hits: 635

The Business Journals: 3 Ways to Get the Biggest Buck for your Business

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 01 December 2014 Category Sellers 0 Comments

Calhoun Companies President and Co-owner, Andy Kocemba, is a contributing writer for The Business Journals. Every month he will provide tips on making the most of your small business.

 

business-for-sale-generic-thinkstock 800xx3799-2139-0-375

 

Imagine two businesses. Owner A works long hours and doesn't make much money. He hasn't had a vacation in years and doesn't really stand out in the market place.

Owner B runs a highly profitable company and takes three vacations a year. Her staff excels while she's home or away. Her company has distinct processes and a reputation as being the best in the business.

All else equal, for which business would you pay a higher price?

At some point during every business owner's career, the question of business valuation comes to mind. Whether you are nearing the point of selling your company, or are in the earlier stages of building your business, there are three main value drivers to consider.

 

Read more about the three value drivers on The Business Journals website.

 

Tags: business valuation, industry, sellers, selling tips, small business, selling, Business Journal
Read More Hits: 678

Small Business Saturday

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 24 November 2014 Category Industry 0 Comments

At Calhoun Companies, we are dedicated to serving current and potential small business owners. This week, you have the opportunity to support small businesses as well. Saturday, November 29, is Small Business Saturday. American Express founded Small Business Saturday in 2010 to help local business owners take advantage of the holiday shopping season. It has since been recognized by Congress and has grown into a $5 billion movement that celebrates that backbone of the American economy: small business owners.

In the United States, there are currently more than 28 million small businesses, classified as 500 employees or less. Together they employ more than 50 percent of the adult working population. These businesses stimulate local economies by bringing growth and innovation to a community as well as provide employment opportunities to people who may not be considered employable by larger corporations. Small businesses also regularly give back to their communities by supporting local nonprofits, schools and events.

The U.S. Small Business Administration shared a few more reasons to love small businesses:

  • Between 1993 and 2011, small businesses accounted for 64 percent of the net new jobs created in the United States.
  • Small businesses make up 98 percent of exporters and produce 33 percent of all export value.
  • Small businesses make up more than 46 percent of America’s nonfarm private GDP.
  • Small businesses create 43 percent of all high-tech employment.
  • Small businesses create 16 times more patents per employee than large patenting companies.
  • More than 7.8 million small businesses are owned by women.
  • More than 3.7 million small businesses are owned by veterans.

This Saturday, take the time to visit with some familiar faces and support your local businesses. They will be thankful you did.

Tags: small business administration, industry, small business, Small Business Saturday
Read More Hits: 2645

How Healthy is Your Small Business?

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Wednesday, 19 November 2014 Category Industry 0 Comments

Measuring your business’ financial health only by the profits generated per month or the balance in your bank account means you are missing valuable pieces of information. Examining the right metrics has the power to inform you about your business’ financial health as well its ability to grow or weather difficult times. If you want to build a deeper awareness about your business’ finances, analyze your three core financial statements once a quarter. They are:

1. Income Statement – This shows the changes that have occurred over a specific period of time. It displays revenue and expenses as well as net profit or loss.

2. Balance Sheet – This document shows your assets, liabilities, and equity as of a given date. Assets are all of the things you own: money in the bank, real estate, equipment, patents, etc. Liabilities are all of the things you owe to people which must be repaid, such as loans. Finally, equity refers to everything you have earned such as your own money and your business’ profits. Remember, your assets always equal your liabilities plus your equity.

3. Statement of Cash Flows – Your statement of cash flows explains all the non-income statement ways that your bank account balance is affected.

A recent article from EMyth.com explains a few key metrics you should look for.

  • Liquidity – Look at the Current Ratio to determine your ability to cover short-term debts with readily accessible assets. A measure of 2:1 is healthy.

Total Current Assets / Total Current Liabilities

  • Cash Flow – The cash flow ratio will tell you how much cash flow you are generating from your total sales. For example, a cash flow ratio of 23.49 percent tells you that for every $100 in sales, you are earning $23.49 in operating cash flow.

Cash Flow from Operations / Total Revenue

  • A/R Collections – The Accounts Receivable Turnover shows you how many days it takes to collect the money your customers owe you. For example, an A/R Turnover of 3.33 means that your accounts receivable is turned over 3.33 times per year, translating to an average of 110 days to collect.

Net Credit Sales (no cash sales included) / Average Accounts Receivable

  • Profitability – Your Profitability Ratio tells you the amount of profit you are making for every dollar in sales. For example, a ratio of 12.5 percent means that for every $100 you create in revenue, $12.50 goes into your pocket.

EBIT (earnings before interest and tax) / Total Revenue

  • Returns – Your Return on Capital Employed (ROCE) can help you measure how quickly your business is adding to your net worth.

Annualized EBIT / Total Invested Capital

Taking the time to accurately measure your business’ financial performance allows you to make better decisions. If you have any other tips on tracking your small business finances, tell us about them in the comments below.

Tags: small business, small business finances, financial statements, advice, industry, small business owners, finances, tips
Read More Hits: 2196

Prepare Your Small Business for a Data Breach

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 10 November 2014 Category Industry 0 Comments

Data breaches among large corporations made headlines this year with alarming frequency. It may seem like it could never happen to your company, but businesses of all sizes are at risk. USA Today recently reported that in the past year, 43 percent of companies experienced a data breach involving the loss or theft of 1,000 or more records, a ten percent increase from last year.

Keep in mind, while many hackers target big businesses, small businesses are not immune to data breaches. In 2013, a Ponemon Institute study found that 55 percent of small businesses had suffered at least one data breach and 53 percent had experienced multiple breaches.

The question small business owners must answer is no longer, “Will you experience a data breach?” but rather, “What steps can you take to prepare for a breach?”

A recent article on Deluxe.com offers seven steps for developing a plan to prepare your small business for a data breach.

  1. Examine your coverage – Many business insurance policies include cyber liability coverage. Find out what level of protection you have.
  2. Dig into details – Explore those details to learn what your insurance policy actually covers. Will they help with the cost of notifying customers? Do they have a damage control program?
  3. Add protection – Add additional services where your business is vulnerable to data-breach liability.
  4. Time Sensitivity – Check on your insurance policy’s reporting requirements before a breach occurs. Failure to provide timely notification may void your policy.
  5. Customer Service – After a data breach, you will likely field many phone calls from affected employees and/or customers. Develop a plan to deal with their calls before it happens.
  6. Media Outreach – Your data breach will be news. Develop a plan for how you will work with the media. If you choose to hire a company to handle your media relations, pick your partner sooner rather than later.
  7. Restitution – To retain customer confidence after a data breach, many businesses offer credit monitoring or hire an outside firm to guide victims through the reporting and resolution process. Determine which steps your business will take to make things right with your customers.

Follow these steps to limit your losses and avoid damage to your business’ reputation and customer confidence.

Do you have other tips for how to appropriately handle a data breach? Tell us about them in the comments below.

Tags: small business, business owners, security, data breach, business advice, industry
Read More Hits: 1338

Calhoun Companies Agent Spotlight: Steve Bragg

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Wednesday, 05 November 2014 Category Industry 0 Comments

Get to know our Calhoun Companies agents!

Each member of our talented staff has the unique knowledge and experience necessary to help you make a mutually beneficial deal. Whether you are looking to jumpstart your future by buying a business, or secure your business’ future by selling it to the best buyer possible, these are the men and women who make it happen.

 

Steve Bragg

Family: Mom & Brother in White Bear Lake, Daughter in Brainerd, Girlfriend & her daughter in Grand Marais, soon to be Lutsen

Education: White Bear Lake High School & International Business Brokers Assoc.

Home: Lutsen, MN

Organizations: IBBA; Duluth, Superior, Iron Range, Hermantown Chambers

 

How many years have you been working at Calhoun Companies?SteveBragg pic

Since 1996

What did you do before Calhoun Companies?

Owned restaurants & rental business

What type of businesses do you like to work with?

Machine Shops, Industry Expert for Restaurants for Business Brokerage Press

Where do you like to celebrate a sale?

On my pontoon boat or snowmobile

What is one of your most rewarding memories or the thing you like most about working at Calhoun Companies?

The reputation and selling only businesses & commercial properties

Where can people find you on the weekends? Or during a Minnesota summer?

At home in Lutsen on Caribou Lake

If you had tickets to a concert, who would you like to see?

Rolling Stones, Pink Floyd, Eric Clapton

What is one food item that you couldn’t live without?

Shrimp or ice cream

What’s the best gift you’ve ever received?

Mud tires from friends when I moved up north in 1984

If you had to choose another job, what would it be?

I can’t imagine

Tags: Untagged
Read More Hits: 926

Press Release: Sale and Purchase of Small Businesses on Pace for Record-Setting Year

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 27 October 2014 Category Industry 0 Comments

logo bottom new

 

For Immediate Release:

October 23, 2014

Sale and Purchase of Small Businesses on Pace for Record-Setting Year

Calhoun Companies Sees Substantial Growth in Local Market during Third Quarter

 

EDINA, Minn., October 23, 2014 – The sale and purchase of small businesses, a reliable indicator of economic health, demonstrate that the Twin Cities market is continuing to experience growth in the third quarter of 2014, reports Calhoun Companies, an Edina-based business brokerage firm.

“Throughout 2014, we have seen a steady increase in buyer and seller confidence leading to more, and larger, transactions,” said Andy Kocemba, president of Calhoun Companies. “Sellers are welcoming the opportunity to undergo business valuations in order to set a sales price that reflects the value of their businesses, and represents a value to potential buyers who are increasingly eager to step into the role of small-business owners as the economy continues to recover."

According to BizBuySell Insight report, in the third quarter of 2014, business transactions nationwide increased by nearly 18 percent from this time last year, resulting in the largest number of business sales in the third quarter since before the recession. Additionally, sellers are regularly receiving nearly 95 percent of their asking price, the highest percentage since the recession hit in 2008. Following increases in the first and second quarters of the year, these numbers keep 2014 on pace to record the highest number of small business transactions since the Insight report began in 2007, indicating continued economic growth beyond recovery from the recession.

Steady growth is expected to continue into 2015 and beyond due to increased buyer and seller confidence. According to BizBuySell’s recent Buyer & Seller Confidence Survey, 95 percent of buyers and 75 percent of sellers hope to close a deal in the next one to two years.

Reports of increased buyer and seller confidence in the Twin Cities are verified by current Calhoun Companies sales trends - the company wrapped up the third quarter with 12 separate transactions averaging nearly $2 million. With the inclusion of several multi-million dollar deals, including two greater than $5 million, total sales topped $23.7 million in what is traditionally the slowest quarter of the year.

About Calhoun Companies

Calhoun Companies is a leading independent business brokerage serving the Twin Cities area and the Upper Midwest since 1908. Specializing in business valuation, buying and selling businesses, and commercial real estate, the team at Calhoun confidently connects buyers and sellers through a successful transaction. Current listings and additional information included on the Calhoun Companies website.

###

Tags: Untagged
Read More Hits: 1084

Press Release: Calhoun Companies Welcomes Kendra Martin as Sales Agent to Focus on Family-Owned Business Transactions

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Wednesday, 22 October 2014 Category Industry 0 Comments

logo bottom new

 

 

 

 

For Immediate Release:
October 2, 2014

Calhoun Companies Welcomes  Martin as Sales Agent to Focus on Family-Owned Business Transactions

 

KendraEDINA, Minn., October 2, 2014 – Business brokerage firm, Calhoun Companies welcomes Kendra Martin to its agent roster. In January 2014, Martin joined Calhoun Companies as an office assistant, while working on her real estate license, and became a sales agent in August 2014. She specializes in business presentations, sales and marketing for family-owned businesses. 

“Kendra is a great addition to Calhoun. Growing up with a family-owned business, she easily relates to and understands how many of our clients operate,” says Andy Kocemba, president of Calhoun Companies.

Martin grew up working for her family’s construction business, LKO Contracting in Duluth, Minn. After receiving a B.A. degree in business management from Bethel University, she moved to San Antonio and worked for The University of Texas Health Science Center as a project coordinator in the curriculum department.

Martin is a member of the Minneapolis Chamber of Commerce. She lives in Minneapolis with her husband Ben.

About Calhoun Companies

Calhoun Companies is a leading independent business brokerage serving the Twin Cities area and the Upper Midwest since 1908. Specializing in business valuation, buying and selling businesses, and commercial real estate, the team at Calhoun confidently connects buyers and sellers through a successful transaction. Current listings and additional information included on the Calhoun Companies website.

###

Tags: Untagged
Read More Hits: 1352

Seller’s Discretionary Earnings (SDE) Decoded

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 06 October 2014 Category Industry 0 Comments

 

If you have been looking into buying or selling a business, you may have heard your brokerage agent use the term Seller’s Discretionary Earnings (SDE). Seller’s Discretionary Earnings is defined as net profit before taxes, plus compensation to one owner (salary and benefits), amortization, depreciation, interest, other non-cash expenses, and one-time and non-business related expenses. This formula assumes one working owner, and compensation to additional owners will be adjusted to market rates. The real question, however, is what does that mean for you?

Buyers generally look at the earning potential of a business in order to decide on the price they are willing to offer. Because small business accounting is handled differently on a case by case basis, brokers use SDE to determine a true bottom line profit which can be used in valuation and comparison.

Essentially, SDE is simply a business’ net profit plus the addition of accounting expenses, expenses that are not relevant to the business, and one-time costs that may have impacted the past year’s earning potential, but will not impact upcoming earnings. Expenses that are added back to the value of a business include the owner’s salary, organizational dues that are not necessary to business operations, personal expenses paid for through the business such as medical bills and cell phones, large one time expenditures for equipment, uninsured loss, renovations, or fines and penalties, and other expenses that a new buyer will not necessarily be paying. A good example of these additions is equipment costs. Say a business regularly pays $500 per month on equipment payments, but the equipment will be paid off in a year. Since the buyer will not be paying that expense, the $6,000 yearly fee can be added back to the business’ net profit.

Once the SDE is determined, a potential buyer can see the true net value of the business, that is, how much money the business has the potential to earn for them, rather than how much it made the previous owner. This value can then be utilized by both seller and buyer in their negotiations.

If you are unsure of how your broker arrived at the SDE for your perspective business, always ask.

 

Tags: Minnesota business, small business, Business planning, business valuation, business brokerage, buyer, seller, business owner, business broker, business, Seller’s Discretionary Earnings, SDE
Read More Hits: 1412

Pioneer Press: Edina brokerage is a local mom-and-pop M&A specialist

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Wednesday, 24 September 2014 Category Industry 0 Comments

 

Calhoun Companies was featured in the Pioneer Press on Sunday, September 21, 2014. Below is the Q&A with Andy Kocemba, president of Calhoun Companies.

 

Edina brokerage is a local mom-and-pop M&A specialist

By David Fondler

dfondler@pioneerpress.com

 

A couple of weeks ago, we reported on a study that found first-half 2014 national and international dealmaking at its highest level since 2007, just before the recession. The study, from global accounting and consulting firm PwC, reported national business transactions pushing a trillion dollars.

These are big deals being done by companies that think globally.

But other companies are thinking locally, and helping them is Calhoun Cos. in Edina.

For the second quarter, the business brokerage reported $4 million in total sales prices across 12 transactions; this on top of nine transactions in the first quarter.

These businesses are restaurants and shops, customer or business service companies, factories and health care.

Calhoun Cos. Andy KocembaMany are family-owned; none have outside investors. And the common denominator is that they are also being bought and sold.

"We certainly provide the same services as your larger M&A advisers and investment bankers, we've just carved a nice niche in that smaller range, and it served us well," said Andy Kocemba, president of the company, which he co-owns with his dad, Wally.

In a recent interview, Andy Kocemba discussed small-business transactions in the Twin Cities and beyond. His answers are edited for context and clarity.

 

Tell us a little about Calhoun Cos.

"It was founded 1908 by a woman out of South Minneapolis, so the name comes from the lake. Back in those days, if you were in real estate, you did whatever it took, so it was commercial, residential real estate.

Through the middle of the century it expanded into property management, insurance, business brokerage, as well the commercial and residential. Pretty big presence in all of those.

"In the 1980s, some of the businesses were sold off. There still is a Calhoun Insurance, and we're primarily a business brokerage. We still do some commercial real estate as well by virtue of the fact that the two are sold together.

"My dad and I bought the company in 2011, after I had previously worked here as a sales agent since 2003. He had worked here since 1993. So we both worked on the sales side, bought the company and moved into ownership."

What kinds of companies are you working with?

"We work with businesses in all industries, all different types. If you were to define a niche, it would be more size-based. We're talking primarily owner/operator business where the owner is there working.

"Service companies always do pretty well because the margins are good. So you can get a profitable service business for relatively low overhead, so that's always attractive to a business buyer. At the same time, people always have liked manufacturing operations, for almost the opposite reason -- that you're buying a lot of stuff; people like the assets. So those always do well.

"Right now, we're seeing trends in anything health-related. We do home health care, we do assisted living, and you can see population trends driving this."

What kind of year are you having?

"Through August, we've actually closed 33 transactions; that's pretty on track, maybe a little higher, as compared to years past. We always see a bigger push to year-end. Business transactions take a while to come together; it's a bit of a longer sales cycle, so based on the activity I've seen this summer, I think we could be in for a big year end."

How did the recession change things for your business or clients?

"What we've seen is through the recession and post, multiples tend to stay mostly the same, maybe they tick up slightly.

"Everybody's hearing about this wave of baby boomers that are coming, and the talk has always been about what happens when they decide to sell their businesses and retire. What really changed through the recession is that wave got pushed back a few years, people started working longer. They had to.

"If you were looking at pre-recession retirement account balances and business values, people were saying, 'I'm sitting pretty, we're all going to sell in 2014 or 2015.' I think that's not the case anymore.

"I read a fact that for the last two quarters, baby boomers have been the top seller group; they've also been the top buying group, which kind of surprised me. That goes to show that this wave of baby boomers is going to be with us for a while."

Did the recession affect the financing side?

"Yes, but somewhat indirectly. The money was still there, banks were still willing to lend on business acquisitions, but it was more a function of fewer businesses and deals that fit into their box. Bank standards didn't change, but market standards did. Banks always wanted three years of upward trends. Then, in comes 2008-2009, and every business takes a backslide. So it was kind of an adjustment; it took banks a couple of years to realize we still need to lend."

And now it's picking up?

"It is; they've adjusted their parameters a little bit, they've realized they have to get money into the market. At the same time, businesses are looking better and better, so it's coming together."

Where do you see the small-business sales market trending?

"Our traditional seller has always been the retirement age, our traditional buyer has always been sort of middle age, tired of corporate, wants to finally get out on their own and do something.

"I think what we're seeing now is a younger group of people, much less anchored into long-term positions, much more fluid. Younger people that maybe want to build a business with the intention of selling it."

 

Click here to read the full article.

 

Tags: Minnesota business, small business, baby boomers, buyers, sellers, leaders, business brokerage, recession, business, media, newspaper
Read More Hits: 481

Calhoun Companies Agent Spotlight: Sam Thompson

by Rose McKinney
Rose McKinney
Rose McKinney has not set their biography yet
User is currently offline
Monday, 15 September 2014 Category Industry 0 Comments

 

Get to know our Calhoun Companies agents!

Every few weeks we will be featuring one of our agents through our Agent Spotlight series. Each member of our talented staff has the extensive experience and knowledge necessary to help you with your own business. Whether you are looking to buy a business or secure your business’ future by selling it to the best buyer possible, these men and women can make it happen. Plus, it never hurts to know which agents have access to a boat!

 

Sam Thompson

Family: Kim (Wife), 3 Daughters: Rae (21), Sean (17), Lee (17)

Education: B.S. Hospitality Management at the University of Wisconsin Stout, CBI with IBBA

Home: Medina, MN

Organizations: Edina Rotary, IBBA, M&A Source, Minneapolis Chamber, Toastmasters

 

Sam Thompson pic resize

How many years have you been working at Calhoun Companies?

2 years

What did you do before Calhoun Companies?

Owned MetroConnections, a hospitality company, for 29 years.

What type of businesses do you like to work with?

Business to Business, Hospitality, IT

Where do you like to celebrate a sale?

Cold beer at Seller’s favorite bar

What is one of your most rewarding memories or the thing you like most about working at Calhoun Companies?

Great reputation, excellent group of agents

Where can people find you on the weekends? Or during a Minnesota summer?

Golfing, pool time with family, traveling

If you had tickets to a concert, who would you like to see?

Just saw Paul McCartney … Unbelievable!

What is one food item that you couldn’t live without?

Unfortunately, ice cream

What’s the best gift you’ve ever received?

Photographs of my family from my family that are for my office

If you had to choose another job, what would it be?

Famous author

 

 

Tags: entrepreneur, leadership, team, business brokerage, small business, business, agents
Read More Hits: 1669
Buy a Franchise

Business Brokerage &
Commercial Real Estate
Services

Buying: Search our listings of businesses for sale.

Selling: Call or contact us to learn more about our complimentary business valuation.

Commercial Real Estate: Inquire about buying, leasing or selling commercial properties.