Questions:
QUESTION 1=
"ESOPs, MBOs, and Family Transition Exits" Please respond to the following:
• From the e-Activity, examine the similarities and differences between an ESOP, MBO, and a Family Transition Exit. Determine which one would be the easiest to successfully complete and which one would be the most difficult to complete. Support your answers.
• Successfully transitioning a family business from one generation to another is a goal of most owners of family firms. Provide advice to a business owner who wants to have a family member take over the business. Create a checklist for the owner to follow and include an introduction and closing statement that provides a summary of your recommendations.
Question 2=
• Successfully transitioning a family business from one generation to another is a goal of most owners of family firms. Provide advice to a business owner who wants to have a family member take over the business. Create a checklist for the owner to follow and include an introduction and closing statement that provides a summary of your recommendations.
Here is my advice if you would like a family member to take over the family business, you must assure yourself that the person who is taking over loves the business, acts as if the business has always been theirs, puts the business first, understands the finances, understands the working conditions, understands what it takes to operate the business and knows how to pick the business up when it seems to be having a rough year. Below is a check list that should be followed before you give the family business over to a family member:
1. Establish Goals and Objectives
2. Establish a decision making process
3. Establish the succession plan
4. Create a business and owner estate plan
5. Create a transition plan
By following the check list and making sure all elements are in place, then it would be easier to choose your successor, I think it it really important that you know the person will ultimately love the business unconditionally and will always have the best interest for the business in their hearts.
Question 3=
"Public Offerings" Please respond to the following:
• Determine the conditions and reasons why a company should consider a public offering. From the viewpoint of the owner of the business undertaking the Initial Public Offering (IPO), determine three advantages and three disadvantages of an IPO.
• From an investor's point of view, determine three advantages and three disadvantages of an IPO. Contrast these advantages and disadvantages with those from an owner's point of view.
Question 4=
• Determine the conditions and reasons why a company should consider a public offering. From the viewpoint of the owner of the business undertaking the Initial Public Offering (IPO), determine three advantages and three disadvantages of an IPO.
• A company may consider a public offering because there are many ways to become big and large, successful IPO's financially set up families for life.
Advantages:
• Your access to capital will increase - many companies 'go public' to raise additionalfundingthat doesn't need to be paid back
• You'll generally have an easier time raising private funds
• Business can often attract more highly qualified employees by offering stock options, bonuses, and other incentives with a known market value
Disadvantages:
• POs are one of the most expensive ways to finance a business - the fees and expenses of 'going public' can reach six to seven figures
• Many businesses fail trying to become IPOs - typically less than 1,000 businesses a year are successful
• You must keep all shareholders informed on business operations, financial and management conditions.
• From an investor's point of view, determine three advantages and three disadvantages of an IPO. Contrast these advantages and disadvantages with those from an owner's point of view.
Advantages:
• Potentially higher valuation than is available in a private offering.
• Increased net worth of the company, facilitating future debt and equity financings.
• Increased future access to public markets.
Disadvantages :
• Two outside directors are required if stock is to be listed on the Nasdaq National Market or the major exchanges.
• Earnings per share will be diluted.
• Stock exchanges and Nasdaq will require public disclosure of significant events.
An owner may really look forward to all of the explicitly the company will get, forgetting the amount of work and guidelines that must be followed on a daily basis when becoming an IPO, and investor pays more attention to the numbers, where the company is heading and how they can increase the numbers.