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15 May What Keeps Business Owners Up at Night?

The following post comes to us from Tim Truebenbach and John Lee of Morgan Stanley’s financial advisory practice. The views expressed here are those of the authors. 

Is my business growing at the right pace?  What are my options when I’m ready to retire?  What happens if any of my key employees leave?  When is a good time to think about selling or transitioning out of my business?  How do I minimize taxes?  How much is my business really worth?

Thinking ahead to retirement?  It’s unfortunate, but true:  Baby Boomers are feeling the economic pressure to work much later in life than in any previous generations (Source: Fox Business, May 26, 2016.)

You have several options when you’re ready to retire.  We explore all possibilities to help you make informed financial decisions.  Starting with a carefully crafted financial plan gives you confidence, knowing you can maintain your desired income and lifestyle.

What happens if a key employee leaves?   Planning for the unforeseen event of key employees leaving or passing away allows you to focus on the long term goals of your business (Source: Business News Daily 6/11/14.)  We help you explore all options to manage risk of losing key employees or partners.

Is my business growing at the right pace?  Is there room for improvement?  The right advisory team will work to help you:

  1. Gain access to capital to grow your business.
  2. Look at the potential of acquiring another business to grow your bottom line
  3. Explore ways to improve margins and growth projections.

Is now a good time to consider selling my business?

Investment banking firms report the mergers and acquisitions market is in its third straight year of favorable market dynamics for sellers.  Since 2009 there are lots of unused purchasing funds, and U.S. economic factors are positive for deal making:

  • Continued low interest rates means cheap financing
  • Active market and attractive valuation multiples
  • Rising corporate earnings surpassing pre-recession levels
  • Unemployment is returning to pre-recession levels

(Source: Bloomberg 1/5/16)

How long will these favorable conditions last?

Interest rates are currently low, but they are rising:  This leads to tougher credit and less access to capital for buyers (Source: Fortune 12/16/15).

Additionally, valuations will normalize: Recent economic recovery has seen a boom in valuations due to growth expectations (Source: Forbes 1/13/16).

There are also several unknown variables, including:

  • Macroeconomic shocks could arise from political events, affecting business and consumer confidence.
  • The EU (European Union) and volatility surrounding Greece, Italy and Spain where economies have failed to recover to pre-recession levels (Source: The Economist 1/09/16
  • China’s growth rate decline continues to concern investors (Source: WSJ 1/20/15).


When is a good time to consider selling my business? How much is it worth?

Planning for the sale or transition out of your business can be overwhelming.  We use a bottom up approach; the first step is to figure out how much income you need to maintain your desired lifestyle.  Second, we work in cooperation with your team of advisors to help you determine:

  1. What is the market value of my business and how does this compare to what I feel the business is worth?
  2. Should I sell to a strategic buyer, family member, or employee(s)?
  3. How should I structure the sale to minimize taxes, income versus capital gains (Source: Forbes 7/26/2015)

We work closely with business owners to help assure the net sale price is in line with your financial goals.

The Truebenbach Lee Group is dedicated to helping business owners in three key areas:

  • Access to capital to grow and expand your business
  • Executive financial and retirement planning
  • Building a team of professional advisors to assist with exit strategies


Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice.  Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

The views expressed herein are those of the author and do not necessarily reflect the views of Morgan Stanley Wealth Management or its affiliates.  All opinions are subject to change without notice.  Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.  Past performance is no guarantee of future results.

Morgan Stanley Smith Barney LLC is a registered Broker/Dealer, Member SIPC, and not a bank.  Where appropriate, Morgan Stanley Smith Barney LLC has entered into arrangements with banks and other third parties to assist in offering certain banking related products and services.

Morgan Stanley Smith Barney LLC. Member SIPC.