Do You Spend More Time Maintaining your Cars than your Business?
February 13, 2008
I have never met a funeral director who got in the profession because they were interested in management and accounting. Funeral professionals are there because they want to serve the families that need them. But good management and accounting systems not only pay off when an owner is ready to transfer, they enhance the ability to provide services to families. Most of us buy cars and trucks because we like or need to drive them, not because we like working on them, but we know that vehicles that are regularly serviced and well-maintained last longer and are worth more than those that aren’t. Even if a poorly maintained vehicle is “detailed” prior to sale, evidence of past neglect is easy for buyers to see.
Detailing and good marketing can help, but they are no substitute for regular maintenance. This article is a reminder that the same sort of regular maintenance and attention will increase the value of your business to you, as well as the next owner.
WORST Here is a common (and costly) process, especially for older owners:
- Decision to sell
- Approach possible purchasers;
- Set value, approach purchaser’s lender for financing;
- Lower price or re-evaluate goals, approach different purchasers;
- Repeat as necessary;
- Sale.
BETTER Any professional or advisor with experience in business sales and transfers winces at the above sequence. Once an owner has decided it is time to sell, a better sequence, in terms of time, disruption to business and value, is:
- Professional valuation of business, outline owner’s goals;
- Evaluate purchasers positioned to meet owner’s goals, identify financing sources;
- Confidential controlled auction to several qualified purchasers;
- Sale.
This process is more profitable and more predictable. But even in the properly sequenced sale something is missing. At this point, there is usually little time to remedy imbedded problems, such as below-market prices, excessive salaries and benefits, lack of management, lack of records or improper tax structure. What steps can an owner take throughout his ownership that will enhance the marketability and value of his business? . Effective management and accounting systems are accurate, timely and ef- ficient. For some owners, “off the shelf ” systems and software can get the job done, if the owner is willing to set them up, train themselves and stick with them on a long-term, consistent basis. Other owners may outsource these responsibilities completely, though lack of participation in the process sometimes leads to failure to pay attention to the results.
Do-it-yourselfers may even create their own systems, if they have the time and expertise to maintain and troubleshoot the systems. Increasingly, we have found many owners do best with systems managed by third parties (similar to a “silent board member”), who can keep them up to date and deal with the technical issues, while the owner remains engaged in the process of inputting and reviewing the results on a regular basis. Valuing a funeral home or cemetery with effective management and accounting systems invariably yields higher, more predictable values, with a wider range of suitable purchasers and willing lenders.
BEST If you think you will ever transfer ownership (and one way or another, you will), try working backward from the sale. Here is a timetable for any funeral home or cemetery who wants to maximize their value:
- Sale
- 1 month prior - buyer due diligence; lots of lawyers. Seller maintains business in ordinary course through systems in place;
- 2 months prior - sign letter of intent. Prepare for limited public knowledge;
- 3 months prior - deliver marketing package to prequalified buyers;
- 6 months-1 year prior - decision to sell. Prepare market package, sufficient also for bank/lender review;
- 1 year prior - review market value, tax effect, long - term projected income needs. Refine acceptable purchasers criteria for ability to pay, finance price;
- 3 – 5 years prior - efficient management and accounting systems that include: ability to generate timely, accurate accounting and fi- nancial reports throughout the year; holding expenses within budgeted ranges; periodic surveys of prices, competition and customer satisfaction; development of management capable employee(s); profit sharing or other incentive retirement plans; regulatory compliance; and employee training and oversight to enhance profitability. Obtain first appraisal. Initial consideration of acceptable successors, as well as owner’s post-sale role;
- Upon acquisition or founding of business, anytime – Review by professionals for correct legal formation, to protect assets, as well as facilitate eventual transfer. Begin establishment of management and accounting systems.
Consider Steps 6-8 like standard maintenance for your firm and you will be rewarded throughout your ownership, as well as upon transfer.
This article does not constitute legal or tax advice and no action should be taken based on the information provided without consulting a qualified advisor.
D. Brooks Cowles, Jr., Esq.
Brooke Credit Announces Re-Branding as Aleritas Capital
February 11, 2008
Finance Company positions itself for $1 billion milestone in 2008
OVERLAND PARK, KS, January 3, 2008 - Brooke Credit Corporation (OTCBB: BRCR; BRCRW; BRCRU) today unveiled its new brand initiative and visual identity, along with the launch of the company’s new website www.aleritascapital.com. The launch of the new brand is effective immediately, and, while the company will continue to operate under the legal name Brooke Credit Corporation for a short period of time, all future business activity will refer to the company as Aleritas Capital. Brooke Credit plans to present for vote to its shareholders a change of its legal name and articles of incorporation at the upcoming shareholder meeting scheduled for sometime in early 2008. In addition to the announcement regarding re-branding initiatives, Brooke Credit also announces its goal of achieving $1 billion in loan portfolio balances during 2008.
Mick Lowry, Chief Executive Officer stated, “We believe that our target markets offer tremendous growth opportunities, as local businesses in the insurance and death care industries have been underserved by traditional lenders over the years. We are committed to loaning money to these underserved business owners, as evidenced by our bold objective of achieving a $1 billion portfolio during 2008. During 2007, management spent considerable time positioning the company for growth by evolving the company’s lending and risk management platforms, expanding its staff and recapitalizing the company through the merger with Oakmont Acquisition Corp. Re-branding and the corresponding launch of an aggressive marketing campaign reflect the next stage of positioning the company for growth in 2008 and beyond.”
Capitalizing on the company’s proven lending platform, the new brand better positions the company for growth within its target markets and offers a more transportable brand across lending segments. The name “Aleritas” was created borrowing from the Latin root alere, which means to support, strengthen, increase, promote and advance. The new brand reinforces the company’s promise to helping our customers realize their dreams of business ownership, by not only providing capital but also providing them with access to tools to help our customers advance their local businesses.
“The process of re-branding involved significant analysis on the part of the company’s management. The Brooke brand has served the finance company well over the years and carries with it a strong heritage associated with the distribution of insurance. Utilization of the Brooke brand made good business sense in the past, because most of Brooke Credit’s loan origination activities were to franchisees that also utilized the Brooke brand. However, in recent years Brooke Credit started to transition from being a franchise lender to becoming an industry lender. It has been successful in this regard, as a majority of Brooke Credit’s 2007 loan originations were to non-franchise business owners. In light of this transition, it makes good business sense today to re-brand the finance company under a more universal brand,” stated Lowry.
Our company’s philosophy is to provide its customers with the capital to fund their dreams of business ownership and the tools to build them. Consistent with this philosophy, Brooke Credit is pleased to announce the launch of LoanPlus, an assortment of tools available to our customers to help them advance their businesses. LoanPlus, which is a voluntary value-added service, provides our customers with access to top consulting, sales coaching and educational firms, at no additional cost to our customers. Furthermore, Brooke Credit has formed a Customer Advisory Committee composed of our customers and industry leaders, which will help expand the tools available under LoanPlus to better serve our customer’s evolving businesses, such as providing them with access to resources for marketing, human resources, and tax preparation, among others.
Lowry also noted, “Although business ownership can be rewarding, it can also be difficult and sometimes challenging. In addition to providing capital to our customers, Brooke Credit is committed to providing our customers with access to tools and services to better deal with the challenges of business ownership and to help them build their businesses. As a finance company, our long-term success will ultimately be determined by the success of our customers. Through LoanPlus, Brooke Credit is making an investment in the success of our customers, by paying for services and tools that they would otherwise have to pay for if they were not customers of Brooke Credit. This is not only good lending, but represents a true commitment on the part of Brooke Credit to our customers.”
About the Company… Brooke Credit is a specialty finance company that originates loans to insurance agencies and insurance-related businesses. Loans are mostly sold as individual loans to participating lenders or as pooled loans to investors through asset-backed securitizations.
This press release contains forward-looking statements. All forward-looking statements involve risks and uncertainties, and several factors could cause actual results to differ materially from those in the forward-looking statements. The following factors, among others, could cause actual results to differ from those indicated in the forward-looking statements: the uncertainty that the Company will achieve its short-term and long-term profitability and growth goals, uncertainties associated with market acceptance of and demand for the Company’s products and services, the impact of competitive products and pricing, the dependence on third-party suppliers and their pricing, its ability to meet product demand, the availability of funding sources, the exposure to market risks, uncertainties associated with the development of technology, changes in the law and in economic, political and regulatory environments, changes in management, the dependence on intellectual property rights, the effectiveness of internal controls, and risks and factors described from time to time in reports and registration statements filed by the Company with the Securities and Exchange Commission. A more complete description of the Company’s business is provided in the Company’s reports and registration statements, which are available from the Company without charge or at www.sec.gov.
Contact Info:
Brooke Credit Corporation
Anita Larson, Chairman and Chief Operating Officer
913-661-0123
anita.larson@aleritascapital.com
The Equity Group, Inc
Adam Prior, Vice President
212-836-9606
aprior@equityny.com
Johnson Consulting Group Acquires Legacy from Keystone
February 8, 2008
Johnson Consulting Group is pleased to announce their acquisition of Legacy Management and Accounting Services from Keystone Group Holdings, Inc.Jake Johnson, President of Johnson Consulting Group, a market leader in Mergers, Acquisitions, Valuations and Succession Planning introduced their Accounting and Management Services last year. Johnson states that
“This acquisition further strengthens these services of Johnson Consulting Group. A funeral home can now rely totally on Johnson Consulting Group for all their financial and operational improvement needs. Our intent is to become the funeral profession’s “Total Solutions Company.”
Johnson further stated,
“We are pleased to bring Legacy and their valued customers into the Johnson Consulting Group. The Legacy team has developed strong customer relationships across the country over the past years. This expansion should clearly demonstrate to these clients’ and the funeral industry at large, JCG’s long term commitment and continued dedication to serving funeral homes coast to coast with all their operational needs.”
To learn more about the services that Johnson Consulting Group offers, call 888-250-7747.