Michael F. Coyle Earns Certifiied Exit Planning (CExP™) Designation

February 23, 2012 at 3:54 pm | Posted in Building Business Value, Business News & Topics, Business Strategy & Growth, Business Transfers M&A, Exit Planning & Transition Strategies, Family Business Topics | Leave a comment

Michael F. Coyle Earns Certifiied Exit Planning (CExP™) Designation

Franconia, NH 2/23/2012:  Michael F. Coyle, CBI, CExP™, member of The BEI Network of Exit Planning Professionals™, recently earned the designation of a BEI Certified Exit Planner (CExP™). The BEI CExP™ designation is the standard for Exit Planning certification. Through training, rigorous testing and in-depth Exit Plan Creation coursework, Michael has advanced is expertise in providing comprehensive, professionally executed Exit Planning services to owners of privately held businesses.

“Exit Planning Professionals who successfully complete the BEI Certified Exit Planner program have come to be known as premiere Exit Planning Professionals because their in-depth knowledge and demonstrated application of The BEI Seven Step Exit Planning Process™  perfectly positions them to counsel business owners and their advisors on a wide array of business issues ranging from building value within a business to identifying exit objectives, addressing key employee incentive planning and retention issues, incorporating business continuity planning, and establishing wealth preservation,” said John Brown, President of Business Enterprise Institute.

“This is another example of the ongoing personal and professional dedication CenterPoint Business Advisors brings to our business clients,” said Michael Coyle.  “We continually strive to increase our ability to serve our clients by achieving the highest professional and education standards in each of our service areas.”

The business owner community benefits from engaging an Exit Planning Professional who holds the BEI CExP™ designation by having greater confidence that the service they receive is professional in quality, adheres to ethical and industry standards of practice, and meets a level of expertise BEI deems credible and worthy of one of its certified members.

CenterPoint Business Advisors was formed in 2004 to assist business owners throughout New England in planning for and executing a successful exit from their businesses.  CenterPoint offers a suite of professional services including; Comprehensive Exit Planning; Business Valuation & Appraisal; Value Building Consulting; Business Intermediary services.

For more information, or to contact CenterPoint Business Advisors, call 888-988-0999 ext. 101 or, go to www.cpointadvisors.com,

A Summary of Positive Signs & Statistics from the Lodging Industry

October 22, 2010 at 1:29 am | Posted in Building Business Value, Business News & Topics, Grocery Store News | Leave a comment
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A Summary of Positive News and Statistics from the Lodging Industry!

By OJ Robinson

Increasingly good news and positive statistics are being reported by the lodging industry based on year to date performance in 2010.

We all know that the 2008-2009 period was devastating for our industry:

  • US Occupancy:    down  14%
  • ADR:   down  $9.40
  • RevPAR:   down   18%
  • Sales of US Hotels 2008: down  42%
  • Sales of US Hotels 2009: down  42.7%
  • Avg selling price/unit:   down  39.0%

2010 year-to-date, and the future forecast show a much brighter period ahead of us. HVS Hospitality is the world’s premier hotel consulting and valuation firm and produces a “Valuation Index” based on historical data and future forecasts. Here are some highlights from their October 2010 report:

2010 YTD:

  • RevPAR:    up  4.3%
  • Occupancy:  up  5.3%
  • Value per room:   up 16.1%
  • Hotel sales volume:  up 21.5%
  • Hotel sales with a per unit price over $200K:  up 120%

What is most exciting about this HVS report is the future projections. After 3 straight years of significant decline, all major metrics are predicted to increase for the next five years. In 2012, the value per room is expected to surpass its previous high, and in 2013, RevPAR is expected to set a new record.

The anticipated rebound in occupancy and RevPAR will lead to hotel values that will increase up to, and then surpass the high of 2006. HVS has attributed the value of a 1987 hotel room as 1.00, and then has tracked the increase/decrease in value over the years, with projections into the future. Here is there data:

In 2009, investors shied away from the hotel sector. In 2010, dealmaking and investment has picked up dramatically. The pace of large deals has increased the most, led by REITs that have cash and can acquire hotels with no financing. For the first 6 months of 2010, hotel sales by dollar volume is up 143% over the first half of 2009. Sales by number of hotels is up 70%.

Hotel buyers are commonly looking to hold the property for a 5-10 investment period. “Flippers” are no longer active in the marketplace as it is no longer makes financial sense to buy, renovate, re-brand, and quickly sell a hotel property.

All of these data are from the whole country. What is the situation in New England? Here are my observations:

  • Buyer activity has increased. I have seen more buyer inquiries lately. In my recent sale of Woodward’s Resort in Lincoln, NH, I had more qualified inquiries in the final 8 weeks of the transaction than in the previous 7 months of active marketing.
  • Banks have money to lend. Interest rates remain historically low. The SBA has extended it waiver of fees.
  • Flagged hotels or well-branded independent hotels remain most in demand with buyers and banks.
  • The New England market is strong. Larger city locations are improving more quickly than average. The Boston market has shown a 14% increase in RevPAR in 2010 YTD, compared to 4.3% nationwide.
  • The local tourist lodging business is reporting a very good summer due to near perfect weather and low area unemployment. The unemployment rate in New Hampshire just reported its 7th month of continued decline!
  • If you are considering a sale of your hotel or motel, you do not need to sit on the sidelines and wait. There are buyers and banks ready to make deals happen.

CenterPoint Business Advisors is sending you this information with the intent of helping you to realize the full value from your hospitality business. CenterPoint assists business owners to build the value of their business, to plan for an exit from their business, to value their business, and to broker the sale of their business. Please contact us if you are considering a long or short term exit from your hospitality business.

O.J. Robinson of CenterPoint has many years in the hospitality industry in New Hampshire. He is the former owner of Parker’s Motel in Lincoln and is one of the owners of the Whale’s Tale Waterpark in Lincoln. He has provided consulting, exit planning, and brokered the sale of numerous lodging properties of various sizes.   oj@cpointadvisors.com

Links:

CenterPoint Business Advisors:  www.cpointadvisors.com

HVS Hospitality Services: http://www.hvs.com/

HVS 2010 U.S. Hotel Valuation Index:   http://www.hvs.com/news/4888/hvs-presents-the-2010-us-hotel-valuation-index/

 

The Cold Winter Air is Coming…

October 21, 2010 at 3:00 pm | Posted in Business News & Topics, Business Strategy & Growth | 1 Comment
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The cold winter air is coming. Will you complain about it, or use it to reduce your electric costs? 

For supermarkets and convenience stores, utility costs have become a major focus in reducing expenses. After labor costs, utilities are generally the greatest expense for convenience and grocery stores. Many store owners are turning to “green” solutions not only to save the planet, but to also save money.

Price Chopper was recently awarded the EPA Green Chill Silver Level Certification for their Warwick, NY store. Their Colonie, NY store was named “Best Green Chill Certified Store”. “Green Chill” recognizes stores that reduce refrigerant charge by 50% and refrigerant emissions by 75%.

Kroger has reduced their overall energy consumption by over 27% since 2000. Part of this was accomplished through their use of LED lighting.

But it is not only the large chains that see the economic advantage to reducing energy costs. In my work with various stores throughout Vermont, Massachusetts, and New Hampshire, I have seen many smaller store owners incorporate green technology into their businesses.

For several years, the Champlain Farms family of store have used outside cold air to keep their beverages cold. Their fresh air exchange system pulls cold air from outside rather than using compressors during much of the winter season. According to the owner, this system has already paid for itself and is now saving them money beyond their original investment.

CenterPoint Business Advisors assists business owners with understanding and growing the value of their business. We have done this for numerous grocery and convenience stores. A key method of increasing the value of your business is to make permanent expense reductions that will result in a higher profit. As energy costs continue to rise, reducing your usage becomes a long term value builder for your business.
CenterPoint is also providing consultation to Freeaire Refrigeration in Waitsfield, Vermont. This company is a leader in designing and manufacturing the controls and systems that allow the use of cold, purified, outside air to maintain a constant and reliable temperature inside commercial walk-in coolers. With the compressor system sometimes not running for months at a time, the FreeaireTM system can save you as much as 50% on your refrigeration energy costs. It’s also eligible for large rebates from your utility company that accelerate the payback period. You can learn more about how they can reduce your long term operating costs at: www.freeaire.com

I encourage you to contact Freeaire today, or one of the many other companies that offer products that can help you reduce your energy costs and increase the value of your business.
CenterPoint Business Advisors is sending you this information with the intent of helping you to better operate your retail food store business. CenterPoint assists business owners build the value of their business, plan for an exit from their business, value their business, and broker the sale of their business. Please contact us if you are considering a long or short term exit from your business.

Updating Buy-Sell Agreements and Business Valuations

June 17, 2010 at 6:26 pm | Posted in Building Business Value, Business News & Topics, Business Strategy & Growth, Business Transfers M&A, Exit Planning & Transition Strategies | Leave a comment
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I met the other day with a Business Risk Advisor and we were discussing exit planning for business owners.  Our conversation evolved toward discussing risk management and business continuity during the exit planning process.  We talked about various insurance strategies to protect business assets and personal ownership interests.  However, I told him from my perspective the greatest risk factor for any business with more than one owner is the lack of an up-to-date buy-sell/shareholder agreement.  The probability that there will be an ownership dispute or some type of triggering event is quite large for most businesses.

Often what is at stake is the survival of the business itself.  If the business fails due to a poor buy-sell agreement, suddenly the value of the business equals the auction value of the assets and nobody is happy.  Most business owners I have encountered have some type of buy-sell agreement drafted, but have not looked at it in years.  Most often it has not been reviewed since they started the company.  The outdated agreements usually have either some understated value of the business or a loosely defined formula or process for valuation if a triggering event occurs.

CenterPoint recommends that all business with shared ownership review their buy-sell/shareholder agreements annually with their business attorney and other advisors.

These agreements can contain complex and sometimes emotional topics, but the best time to discuss these is before there is an event or dispute.

The agreement should cover each triggering event (death, disability, sale to anoutside party, termination of employment, planned or voluntary retirement, and shareholder dispute)

1.  You should decide:

a. Does the departing shareholder have a right or obligation to sell… and to whom?

b. Does the remaining shareholder and/or company have a right or obligation to purchase… and how?

2.  How will the ownership interest in question be valued?
3.  How the acquisition be funded?
4.  What are the terms and conditions of any acquisition?

Often neglected is the process of revaluing the business.  We recommend that the value be agreed upon annually and noted in the corporate records.  The complexity of the valuation will be determined by the size of the company, the number of owners, and the likely parties that may evaluate the valuation (courts, IRS).

In summary, one of the largest and perhaps easiest risks for business owners to mitigate is to have an up-to-date buy-sell agreement and business valuation.  Failing to do this could put all the business value at risk.  If you are an advisor to business owners suggest that they address this area of risk.

SBA Small Business Lending Bill

December 16, 2009 at 3:04 pm | Posted in Business News & Topics | Leave a comment
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The Senate Small Business Committee will mark up S. 2869 next Thursday, December 17th.  Highlights of the legislation include:

  • Increase the loan limit on 7(a)* loans from $2 million to $5 million.
  • Increase the loan limit on 504* loans from $1.5 million to $5.5 million.
  • Increase the loan limit on microloans from $35,000 to $50,000.
  • Allow the 504 loan program to refinance short-term commercial real estate debt into, long-term, fixed rate loans.
  • Extend the authorization to provide 90 percent guarantees on 7(a) loans and fee elimination for borrowers on 7(a) and 504 loans through December 31, 2010.
  • Direct the SBA to create a website where small businesses can identify lenders in their communities.
  • Increases the maximum guarantee on 7-A loans to $4.5 million
  • Changes the eligibility criteria to  (a) a tangible net worth not to exceed $15 million and (b) the average net income after Federal Taxes over the past two full fiscal years is not more than $5,000,000

CenterPoint Business Advisors feel this piece of legislation is a very important element in creating a broad economic recovery.  This bill is being closely monitored by our industry trade group, the International Business Brokers Association (IBBA).

*  The 7(a) and 504 programs are lending programs administered by the Small Business Administration to support the growth of small businesses.

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STR Predicts Good News in 2011

December 8, 2009 at 2:47 am | Posted in Business News & Topics | 1 Comment
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By OJ Robinson

As part of its monthly forecast program, STR (Smith Travel Research) is projecting the US Hotel industry will report increases in all three key metrics in 2011.

STR’s forecast projects 2011 occupancy to be up 2.4 percent to 56.2 percent, average daily rate to increase 3.0 percent to US$96.81, and revenue per available room to jump 5.5 percent to US$54.41.

“For the first time since 2007 occupancy will improve in 2011,” said Mark Lomanno, president of STR. “With that, we think that finally the industry will have the ability to raise room rates, though we think that it will be very mitigated ADR growth, about the 3 percent range. It won’t nearly come close to getting back to 2007 levels, but will at least be the beginning stages of improvement.

“We think that most of the construction pipeline will be built between now and 2011,” Lomanno continued. “We are looking for supply growth in 2011 to be about 0.8 percent.”

Demand for 2011 also is expected to end the year positive with a 3.2-percent increase.

STR’s revised forecast is expecting 2009 occupancy to end down 8.8 percent to 55.0 percent, ADR to drop 8.9 percent to US$97.30, and RevPAR to drop 17.0 percent to US$53.52.

“The current forecast predicts RevPAR to be down 17.1 percent for 2009,” Lomanno said. “Our latest revision modifies that slightly to 17 percent. Part of the reason for that is the ADR declines have plateaued and didn’t go down as far as we thought they might, which is a good thing.”

The outlook for 2010 looks slightly better than 2009, but still the industry is expected to end the year with decreases in all three key metrics. Occupancy is projected to end 2010 with a 0.2-percent decrease, ADR is forecasted to finish with a 3.4-percent drop off, and RevPAR is expected to close with a 3.6-percent decline.

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Tourism: Cautious Optimism

November 22, 2009 at 3:05 pm | Posted in Business News & Topics | Leave a comment
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By OJ Robinson, CBI

There are several signs that give area hospitality properties reason for cautious optimism for the near future.

After a 2009 summer season that was disappointing for most area operators, a recent survey suggests that leisure travel will improve during the holiday and winter seasons. According to a recent press release from Deloitte:

“While the tourism, hospitality and leisure (THL) sector continues to be challenged by current economic conditions, a new survey from Deloitte suggests reason for cautious optimism heading into the holiday and winter travel season.

Deloitte’s survey of 2,000 consumers in the United States revealed that almost half (45 percent) will take a vacation or leisure trip that involves staying overnight in a lodging facility, such as a hotel, motel or a timeshare, from the beginning of Thanksgiving week through March of next year.”

Read the entire press release and survey results here.

I find it encouraging that 70% of the respondents said they plan to travel as much, or more, than they did during this same period last year. However, the majority of these travelers plan to spend the same, or less, than a year ago. Our industry will continue to be challenged with rates and occupancy that remain lower than before the recession, but we are seeing the signs of a turn-around.

For those of us that do business in New Hampshire

New Hampshire was again ranked 7th nationally for the State Business Tax Climate. This is a very statistical analysis by the Tax Foundation that helps legislators and business executives understand the total tax burden put on businesses as compared to all other states.

Other New England states ranked as follows:

State Ranking
New Hampshire 7
Maine 34
Massachusetts 36
Connecticut 38
Vermont 41
Rhode Island 44

An executive summary of the Tax Foundation report can be found here.

I hope you find this article informative and helpful. Let’s hope for some cooperative weather and a  busy winter season!

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