How To Buy Out your Business Partner
Buying out your business partner can give you more autonomy over the company, but the process can be complicated. To minimize potential issues, it’s critical to approach a buyout with care and strategy. If you’re considering changing or dissolving your business partnership by buying out another partner, try following these six steps for a smooth transition.
A business valuation is an independent and unbiased process of determining a supportable opinion of the transferable value of a business or company as of a specified date. The field of business valuation encompasses a wide array of tools and methods with variations between valuators, businesses and industries. Different business valuations are used for purposes as basic as establishing benchmark expectations for potential business marketability through to compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation as well as the Business Appraisal Standards of the Institute of Business Appraisers.
How are we different?
The FIRST thing to realize is that your financials incorrectly state what you earn in the business. The IRS allows you to deduct expenses like depreciation, amortization, interest, your salaries, benefits and other perqs. We have a list of 30+ items that increase your cash flow, and the exciting part, is that these can increase your valuation by 3, 4, 5 and 6x….we’ve even seen 9x. Similarly, your fixtures, furniture, equipment and vehicles are typically understated on your balance sheet. The IRS allows you to depreciate these but you can increase their values typically to their used fair market values. We guide you through the entire process to recast your income statements, balance sheets and income tax returns.
We have been doing this for THREE DECADES ! We handle the entire process discreetly and confidentially. We encourage you to read some of the testimonials from our clients (see below).
We provide business valuation services to meet your EXACT personal and business needs and situation. You will have ONE point of contact through the entire process who will explain ALL steps, answer ALL questions and review the final report. We are highly responsive to your personal needs. Unlike other companies that only use 3 methods of business valuation, we use 8 methods to complete your business valuation.
- Asset Approach
a. Adjusted Asset Value Method
b. Tangible Asset/Cash Flow Method
- Income Approach
a. Single Period Capitalization Method
b. Excess Earnings Method
- Market Approach – Private Company Sales Comparison Method
a. Price/Revenues Multiple
b. Price/SDCF Multiple
c. Price/EBITDA Multiple
d. Price/EBIT Multiple
How do You Choose Who to Perform a Business Valuation?
There are 5 KEY factors:
- Independent – needs to be done by an independent company
- Third-Party – not your accountant, not your brother-in-law, not anyone you have even done business with.
- Must be a Business Appraiser – not an equipment appraiser or Real Estate appraiser.
- Experienced – The appraiser must know and use all 8 of the Valuation methods
- National – the appraiser needs to do business all over America. They can’t be limited to a small number of companies in N Tx for instance. They should have a database all over the USA
Comments from our Clients
I can’t say enough about Jeff and his team. My business partner and I decided to separate ways and needed a comprehensive evaluation done so I could purchase his shares. I’m in a very unique and competitive industry with many different growth factors, but Jeff was not taken back at all. In fact, he was so patient and sensitive to our situation knowing that it could go south quickly, and you could tell he did not want that for us. We were able to have a peaceful buyout mostly in part that we both totally agreed with the factual, professional, and thorough evaluation report we received from them. I’m sincerely grateful the Lord let us find them.
Joel Webb, Managing Partner, Lifetime Commercial Roofing LLC
I called several valuation companies. I was so impressed with your company from the initial web search, to speaking to you and your employees and through to the references. You run a first class operation!
Phyllis Cox, Steve Hatcher Plumbing and Drain, LLC
It was a pleasure working with Jeff on the sale of my business. He showed a high degree of professionalism through the entire process with great communication. Anytime I had a question or concern he immediately addressed it regardless of where he was (even while he was in the middle of a hurricane).
My degree of satisfaction with Jeff personally exceeded my highest expectations as he mentored me throughout the sale process. His coaching was extremely helpful as he brought potential buyers sooner than I was expecting.
I always felt he took a great personal interest in me and my family and was careful to make sure I was okay with the direction and terms of the sale. I have appreciated his follow-up as transition was being made with new ownership and potential issues addressed in a discreet manner.
I would certainly recommend Jeff to other business owners who were considering their potential sale.
Sincerely, Keith Short, President, Asset Retrieval & Investigations, LLC
Thank you for your exceptional support from initial meeting, coaching regarding exit planning, preparing for meetings with purchasers through to service after the sale. I feel that you cared for me and my family. Will I recommend Adam Noble Group to other business owners? OF COURSE I WILL !!
Md Ahsan Habib, iArisha, LLC
We built a very successful brewpub in Rowlett, thanks to great employees and customers. Jeff’s firm completed a business valuation and then found an awesome buyer for the business. I recommend using his business valuation and sale services!
Kevin Lefere, President, Bankhead Brewing Co. LLC
Your company was highly recommended to me. Jeff Adam met with my wife and me and described all the steps from business valuation to marketing to sale to closing and to after-sale transition. Over 26 years, I had grown my company to be one of the biggest garage door and gutter companies in Texas. With over 50 employees, I was very concerned about confidentiality and finding the right buyer for the business. We began with a business valuation and I was astonished at the value of my company
Jeff quickly presented many qualified candidates and we sold our business to an excellent company. The sale happened 2 months earlier than expected. As Jeff promised, he put the BIGGEST CHECK OF MY LIFE in my pocket. Coronavirus did not slow us down ! Jeff personally followed up with both the buyer and me regularly during the transition to make sure that everything went well. He was always available, from start to now.
I strongly recommend the Adam Noble Group to anyone considering buying or selling a business!
Windell Chamblee, President, Kodiak DGS Inc
Jeff Adam and his staff did a great job for me regarding the sale of Railhead Smokehouse. After 11 years I decided to sell and could not be more pleased. From the valuation of the business all the way thru to post-sale follow up, everything was spot on. I had no idea there were so many details to this type of sale and Jeff handled it all. Very discreet, honest, confidential, timely and professional. I highly recommend Jeff Adam and his company.
Burt Parnell, Railhead Smokehouse
How can we help you? Fill in your information and we will CONFIDENTIALLY and DISCREETLY respond. Call our office at (817) 467-2161 if your situation is urgent or you need an immediate response.
Contact Jeff Adam, PE, MCBC, FRC, CBB at Adam Noble Group, LLC
Phone: (817) 467-2161
Are you looking for a Business Buyer? Search buyers at SEARCH OUR BUYERS, email or call us to discuss your opportunity. It may fit an active buyer’s search criteria. Thinking of selling: Contact us TODAY to Sell your Business
I just wanted to take a moment to thank Jeff for completing the valuation of our brewery. From the beginning, he was upfront and professional about what steps needed to be taken by either party in order to get the ball rolling. Jeff was very familiar with our industry, which helped tremendously in getting the right valuation that helped in completing the selling phase of the process.
We always felt he took the time to understand our needs and concerns and why we were making the tough decision to sell our business. I was always able to call Jeff, even when he was on vacation, he was checking in to see how we were doing! If, at any time, I was feeling uneasy about the way things were progressing, he was more than willing to discuss these concerns and make any adjustments necessary to ease my concerns.
Jeff was instrumental during the due diligence phase once we received an offer. He provided us with a qualified buyer and assisted both parties through this phase which led to a very uneventful “successful” closing!
Chris Deible, Woodcreek Brewing Company LLC
Jeff Adam guided us from the Business Valuation, the process and everything that goes with the sale. He was thoughtful and understanding and gave us excellent guidance on all aspects of the process. His honesty and integrity were present during the entire exit planning process as he represented our interests. Jeff kept all parties calm and on track during our complicated sale. The final business sale was a mutual success for all parties. He put the biggest check of our lives in our pocket !
We highly recommend the services of Jeff Adam of ADAM NOBLE GROUP, LLC. A professional business broker with personal passion and a constant concern for his customers to meet their goals.
With Best Regards, Dennis and Charmaine Dehn, Dehn’s Innovations LLC
Thank you for your coaching and expertise during the valuation and sale process. I was concerned that our concentration of oil and gas customers would negatively affect value but Jeff brought a strong team to our valuation and sale process and ensured that our interests were always foremost. As promised, he put the biggest check of my life in my pocket ! I highly recommend the Adam Noble Group, LLC
Nicole Tim Chiniaeff, President, Recorders Charts & Pens Inc
Chris and I want to sincerely thank you for your dedication and support during the valuation of our business. While we are experts in our field, selling a business was so much more involved than we initially realized. There are so many factors to consider from pricing and creating a profile to dealing with potential buyers; you are an expert in all those things. From our first call you reassured us that you would and could meet our goal and our timeline and you successfully did everything you promised in four short months. Every step of the way the process was explained and we liked the personal service that we could contact you anytime we had a question or concern. We are so thankful to have made the right decision selecting the Adam Noble Group. We can honestly say we could not be more pleased with the outcome! We strongly recommend the Adam Noble Group to any business looking to sell and let Jeff Adam do his job!
It has been a pleasure Jeff!
Sincerely, Dianna & Chris Hale, CHRIS HALE & CO., INC., Long Term Care Consulting & Cost Report Preparation
Jeff made the experience of selling our oil and gas services company the most smooth and simple process possible. The valuation process was very valuable and helped us understand the value of our company. Jeff took the time to explain to us the entire acquisition process and what to expect throughout each step. He even went through the emotions we may experience and helped us really take a good look and weigh all the options we had including to sell or not to sell. Once we decided to move forward with the sell, he found well-qualified buyers within a couple of weeks. He was always available to answer all our questions and did so in a timely fashion including weekends, nights, even when he was on vacation. Jeff had integrity and honesty that made us feel very comfortable and taken care of. He not only became our broker, but our friend. I highly recommend the Adam Noble Group and will use them again in the sale of our next business!!
Jo Beth Southard, President, Halo Coatings, LLC
Several years ago, we decided to value and sell our 50-year-old manufacturing business. After several frustrating experiences trying to sell the business ourselves and dealing with different brokers, we asked Jeff to sell our business. He knowledgeably evaluated our firm and outlined the process to professionally prepare our business for sale. Each step was explained and the entire process was handled confidentially. We followed Jeff’s recommendations to the letter.
Twenty-one days later, we accepted an offer at full price! If you want to confidentially and professionally sell your business, call Jeff. We strongly recommend his firm!
George K. Towles, Jr, President, American Foam Rubber Products Corp
Jeff recently worked for me as an M&A consultant to value and sell a business. His firm did an excellent job delivering timely results as well as providing a great assessment of the process. I enjoyed working with him personally and would recommend his firm to anyone considering hiring them.
Michael Gorton, President, Principal Solar
We had never sold a company. After completing an independent valuation, we hired Jeff’s firm to sell our business. He quickly presented several qualified buyers and helped us chose the best fit. He helped all parties work through some surprises and get to closing. We strongly recommend Jeff Adam and Adam Noble Group to anyone needing to establish the value or sell their business.
William & Khoan Do, CEO, Delta Signs, Inc
We had been so pleased with our previous experience with the Adam Noble Group, that we asked him to sell our industrial manufacturer. Jeff was able to work through all the sensitivities of dealing with a 50-year-old 3-person partnership. He facilitated a third-party valuation and structured a deal to meet our expectations. The buyers were an excellent fit. We strongly recommend his firm!
George K. Towles, Jr, Paul Sorrels, Owen Cobb, Partners, Frankston Paperbox, Inc.
Jeff helped guide me through the valuation of my 54 year old manufacturing business. The valuation supported my selling price and allowed my to sell my business trouble-free. Jeff provided the exact level of advice and service that I needed to discreetly sell the business to a dear friend. Thank you for your timely assistance and guidance!
Phylis Doyle, President – Harris Costumes
Why Perform A Business Valuation?
Business owners and entrepreneurs need a reliable company valuation for one or more of a variety of reasons:
- Business Sale
- Exit Planning
- Future Marketability
- Estate Planning
- Financial Planning
- Key Man Insurance
- Partnership Buyout
- Shareholder Agreement
- Shareholder Disputes
- Income Tax
- “C” to “S” Corporation conversions
- Third Party Independent Opinion