April 26, 2013

Craig Castelli

Bridge Ventures, LLC

Chicago, Illinois 60662

This story is about a stubborn old coot who thought he could sell his business without help. Big mistake. Having exhausted several attempts to sell my hearing aid practice from 2010 through 2012, I reluctantly dug out a business card from Craig Castelli of Bridge Ventures in Chicago. My last communication with Craig had gone something like this: “If things go south on the sale, I will get back to you.” It went all the way to the South Pole.

The first surprise came with the extraordinary and in-depth business valuation Craig generated. I received more information about the financial health of my business than during the course of my 23 year ownership. It underscored the reason I became an Audiologist and not an Accountant. When the time came to set the asking price my response was “Yeah, right!” Imagine my embarrassment when I was offered more than the asking price. Continue reading →

What is the difference between an investment and a career? The two words are rarely compared, but in the context of business ownership perhaps we should pay closer attention to their meaning. A career is your occupation or profession, followed as your life’s work and hopefully something you are passionate about. An investment is an asset purchased with the idea that it will provide income in the future or appreciate and be sold at a higher price. Whereas a career only provides you with an annual income, an investment can provide you with both an annual income and a return (hopefully for a gain) of your invested capital.

Perhaps the best way to compare the two is this: you retire from a career, but you exit an investment. This distinction sums up the difference in approaches – retirement is a highly personal and emotional decision whereas exiting an investment is a highly rational, non-emotional, business decision.  Unfortunately for many small business owners, when it comes to exit strategy it’s tough to separate the emotional from the rational.  Therefore, exit is typically linked to retirement rather than the real factors that drive exit timing.

Continue reading →

Plenty of CPA’s handle business transactions, and do a good job.  Chances are good, however, that yours is not one of them.  Most small businesses rely on a CPA for tax preparation and general tax advice, and most CPA’s that cater to this type of client rarely handle other types of work.  Over the course of their careers they are “involved” in multiple transactions, but always in a very limited sense that is aligned with their expertise – tax guidance.

Many small business owners ask their CPA for advice about when and how to sell their business.  Why not go to someone who you have relied on for years and who knows the financial piece of your business intimately?  This may be harmless and they may give you useful feedback, but should always think objectively about their input unless their practice is based more on transaction advisory than tax prep.  Let’s consider two common examples of how they can misguide you: Continue reading →

March 1, 2013

For Immediate Release

Bridge Ventures announced today that it assisted in the sale of Advanced Hearing Systems of Joliet, IL, to a regional competitor.  Bridge represented the seller on an exclusive basis in this transaction.  At the buyer’s request, their name will not be disclosed in this announcement.

Craig A. Castelli, Managing Director of Bridge’s Chicago office, led the transaction.  The seller hired Bridge after trying to sell the company on his own.  Despite the time on market, the seller received the premium valuation he sought out of the transaction paired with favorable post-closing employment terms. Continue reading →

Fed Chairman Ben Bernanke is once again testifying before Congress, largely defending his current policy and generating tons of press coverage.  Most of it focuses on the impact on the stock and bond markets, large banks, and U.S. economic growth, all of which affect the small business owner indirectly, but the coverage misses the direct impact.

Interest rates have been held at historic lows by the Fed for the past few years.  Eventually they will rise, most likely accompanied by inflation.  As a business owner, rising interest rates means your cost of capital increases.  Likewise, the cost of financing an acquisition is higher. Continue reading →