Category: Breakfast at Epiphany’s

Introducing a new weekly blog that covers legal matters, business strategy, and life perspectives… all from the mind of a non-attorney (Project Specialist: Kelton Dopp).


Due Diligence

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.


So you want to sell your business, eh?

Obviously, the reality is somewhere in the middle. Which end of the spectrum does it fall on? Hard data indicates that reality is much closer to the latter.

70% of businesses placed on the market NEVER sell.

That’s 7 out of 10.

If you’re a small business owner, I want you to think about your top 2 competitors. If you all went on the market today, statistically speaking, only one of you is going to sell. The other two would be liquidated. Yikes.


Even if you are fortunate enough to receive an initial Letter of Intent, you are not “home-free”.

According to Forbes, nearly 50% of all deals fall apart in the formal due diligence process!

That means, in a TON of cases, the money and mutual interest is there, but it doesn’t get to the finish line because of something that happens in Due Diligence!


What is Due Diligence?

Merriam-Webster says, “Research and analysis of a company or organization done in preparation for a business transaction.”

I really like that definition. It’s simple and straightforward. Unfortunately, Due Diligence is anything but simple and straightforward.


It’s a HIGHLY complex process that requires a TON of time, for both the buyer and the seller.


The process of formal Due Diligence begins when a Letter of Intent is executed. This letter is generally non-binding, and usually discloses a range of possible purchase prices.

Next, the buyer will likely sign a non-compete and non-disclosure agreement in exchange for the ability to review the seller’s sensitive documents.

Then, all H*** breaks loose.

A well-educated and experienced buyer will look for every conceivable way to “re-negotiate” terms of the original offer. They analyze and scrutinize until they are satisfied that every stone has been overturned. This includes:

  1. Financial Documents
  2. Organizational Documents
  3. Physical Assets
  4. Technology
  5. Intellectual Property
  6. Customers
  7. Strategic Direction
  8. Contracts
  9. Employee Benefits
  10. General Employee Issues
  11. Key Personnel
  12. Litigation
  13. Environmental Issues
  14. Tax Matters
  15. Insurance Matters
  16. Professional Affiliations
  17. Press Releases

These are just a handful of the topic areas typically covered. Have you ever seen an actual Due-Diligence Checklist? A short checklist is 10 pages long. An extensive checklist can push 25 pages without blinking an eye.

What if you can’t find some of the information requested?

…Or it takes you a few weeks to deliver the information because you’re ‘busy’?

…Or you feel uncomfortable disclosing the information?

As the selling party, that’s all your prerogative. I can promise you, though, it doesn’t paint you in a good light.


Buyers generally are given 30 to 60 days, just to review the material once it has been received. At that point, all parties may come back to the negotiation table to try and close the deal.

Start to finish, most deals take at least 6 months to close. Many can take significantly longer. Can you imagine the pain of having a deal fall apart in the final stages?!

If the Due-Diligence process equates to actual wartime preparation (in terms of the planning and strategy required to do it well), most business owners act like they are preparing for a casual water gun fight in their backyard. Woefully unprepared.


Practice Makes Perfect

Wouldn’t it be nice if you could get a practice run at Due Diligence? You know, get bruised up a little bit – maybe a few years in advance of your exit. That way, you could figure out the things that you need to correct while you still have time on your side. Plus, you wouldn’t be blindsided by anything when Due Diligence happens for real, because you’ve got experience on your side. No surprises.

Man… That would be perfect…


By Exit Planning with Epiphany Law, you can do just that.

Your first step is completing a State of Readiness assessment, which offers an unbiased opinion on the preparedness of YOUR COMPANY for a transition / sale. If you’re ready, great! Keep up the good work until it’s time to hit the ‘eject’ button. If you aren’t, we will recommend ‘next steps’ to get you where you need to be.


Give us a call or shoot me an email if you have more specific questions!

Thanks for reading! To subscribe to our weekly content, you can enter your email on our homepage.

Exit Planning: When to start?

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.

A few weeks ago, we sent out emails to several business owners, inviting them to attend a presentation on Exit Planning. We met our desired room capacity pretty quickly, but we did get a few responses like this:

  • “I’m not exiting my business for 3 or 4 years, I’ll attend the presentation then.”
  • “We aren’t exiting until next year. Will you be doing this again in 6 months?”

Two separate business owners made a conscious decision to delay attending this kind of presentation until their exit is at arm’s length.

As a person who is very educated on what Exit Planning is and how much work it takes, let’s just say those decisions scare the s*** out of me.

Yes, I know, there is a certain contingent of business owners who simply cannot – and will not – mentally or emotionally handle the task of planning for their exit. In fact, we even wrote a blog about it: Exit Planning: Why Do Business Owners Avoid It? Bottom line: It’s just too much for them, so they stick their heads in the sand.

Those responses we got – you know, a few weeks ago after the presentation – those felt different. To my mind, it feels like those business owners actually think it is OK to wait longer than they already have. Like, with the rational part of their brain.

They weren’t being emotional, afraid, or willfully negligent.

It seems like they were just living their reality.

If that is the case, I have failed you all miserably.


The truth is, executing an Exit Plan takes a hell of a lot longer than 6-12 months. If you wait until then to even start LEARNING about Exit Planning, you are way behind the 8 ball. You are asking for disaster. I’m not saying you are S.O.L, but I AM SAYING that you have effectively put the ball in someone else’s court and left value – i.e. MONEY – on the table.



Okay… So how long DOES it take?

Internal Transition

First of all, did you know there are really only four (4) practical ways that you can transition a business internally?

  1. Intergenerational Transfer: The transfer of a business to direct heirs, usually children. About 50% of business owners want to exercise this option; only 30% do it successfully.
  2. Management Buyout: Owner sells all or part of the business to the company’s management team. Management uses the assets of the business to finance a significant portion of the purchase price.
  3. ESOP: Company uses borrowed funds to acquire shares from the owner and contributes the shares to a trust on behalf of the employees.
  4. Sale to Existing Partners.

Here’s the deal: If I’m going to be your Exit Planner, and you are considering an Internal Transition of any kind, I want our initial meeting to be at least 10 years prior to your exit.

You heard me. 10 years.

Why? 2 Reasons.

  1. In all likelihood, you are not just GIVING this thing away. And you want cash at closing, not a promise to pay.
  2. In all likelihood, the person(s) you are selling it to can’t afford to buy it, and wouldn’t be able to secure financing.

If you come meet with me 10 years in advance, we can create a pot of money for your successor(s). The concept is simple: Money gets bonus-ed into the pot if – and only if – they achieve predetermined objectives that help you grow the value of the business. Pick your scenario:

  • Give successor(s) $0.00, have a company worth $2,000,000. In 10 years, receive a 20 year note and a $150,000 first year payment.
  • Give successor(s) $1,000,000.00, have a company worth $3,000,000. In 10 years, receive $2,000,000 and a 10 year note for the balance.

I know which one I’d pick.

If you come meet with me 5 years in advance, we cannot do that.

If you come meet with me somewhere in between, the numbers might work. They might not. It’s anybody’s guess.

External Sale

If you’re planning to pursue a sale to a third party, I will be thrilled if you give me a 5 year runway to work with.

You see, Exit Planning is a lot like flipping a house:

If you give me 5 years, we can update everything: new hardwoods, appliances, siding, and roofing. We can check the plumbing and electrical. We can remodel the kitchen and master bedroom. Hell, we can even toss on an addition. And the best news: All of that will be done in 2-3 years, giving us the opportunity to truly pick our spot and capitalize on favorable market conditions when they are present.

If you give me 3 years, we can still make a ton of updates. The house will truly be in great shape for buyers. Only problem: you aren’t giving yourself any time to play the market. Once the house is ready, you’re going up for sale, whether it’s a buyer’s market or a seller’s market.

If you give me 1 year, we can update a handful of things and slap on a fresh coat of paint. That’s it. Smart buyers – yes most of them are smart – are going to try and poke holes to drive the price down.

I know what you’re thinking: “Yeah, remodeling makes everything look great, but it ain’t free either. Is it really worth the investment?”

  • For most of you it’s going to mean the difference between a business that sells and one that sits on the market for 2 years before getting liquidated because nobody wants it.
  • We track ROI for our clients. We’ve never had someone come out in the negative. We generally EXPECT our clients to earn at least 30% on their investments in Exit Planning by the time it’s all said and done.

Getting Started

We generally kick off the process with a complimentary “exploratory” meeting. You’ll have the opportunity to ask questions and help us understand your true desires.

Assuming all parties agree to move forward, we jump into “Benchmarking” your business.

To stick with the remodeling analogy, it’s the basic equivalent of obtaining a real estate appraisal – on steroids. Yes, we deliver you with an estimate of value based on your financials. We also take it 5 steps further. We give you insight that says, “Hey, someone is going to fall in love with this house and pay 20% more if you gut the basement clean, paint the stairwell olive green and put a giant picture of Aaron Rodgers in the family room.”

At that point, whether you hire us to gut the basement and paint the stairwell, contract it out to someone else, or ignore our advice is entirely your prerogative.


Thanks for reading! To subscribe to our weekly content, you can enter your email on our homepage. You can also follow Epiphany Law on Facebook and LinkedIn for regular updates from the Firm. Finally, you can follow me on Instagram (@kelton.official), where I regularly post links to new blogs, as well as random pictures of my life.

Miller Restoration: 3rd Time’s a Charm

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.


Built to Sell Radio is a weekly podcast for business owners. Each week, host John Warrillow asks a recently cashed out entrepreneur why they decided to sell, what they did right and what mistakes they made through the process of exiting their business.

As an Exit Planning Advisor, I was excited to discover this podcast based on its topic category alone.

I was thrilled when I listened to an episode to find that John Warrillow is an absolute gem as a host.

My jaw hit the floor when the podcast responded favorably to my request to write a monthly article based on their episodes.

It’s the thing we haven’t been able to give to our readers. That is, the perspective of business owners who have gone through the rigors of exiting a business.

After all, I can talk about Exit Planning until I’m blue in the face.

I can tell you the best practices for Transferring Ownership to Children.

I can even explain Private Equity like I was speaking to a 7 year old.

But when it comes right down to it, you don’t want to hear about this stuff from some hot-shot advisor. Nope. You want to hear it straight from the horse’s mouth.

Let’s do it.

EPISODE 128 (February 16th, 2018)

Episode Summary:

Scott Miller owned Miller Restoration – a company specializing in residential fire and water damage restoration – for 12 years before ultimately selling the $3 million-per-year-company for a 3.5x multiple in 2018.

On two previous occasions, Scott tried – and failed – to come to terms on a deal. The meat-and-potatoes of this episode comes from Scott’s dialogue as he reflects on those failed attempts.

Clip #1:

John Warrillow: “You shared earlier that you had gone through a couple of ‘false starts’ with potential acquirers. At what point did you start to think, ‘Hey, it’s time to sell.’? Was there a triggering event?”

Scott Miller: “There were a couple different phases of that. Earlier on, maybe about 5 years into the business – I listed it. I just didn’t like it anymore. I felt like I needed to do something else with my life. I had a 1 year listing agreement with this person and he didn’t bring one potential buyer.”

“For a few months I was angry that he wasn’t bringing me anyone. But then I thought to myself, ‘You know what? I have a good team, and I’m making a good income… This isn’t so bad.’ Maybe this is just for the best. And I didn’t relist it.”

“I never disengaged during that listing period. That was really important. I had kept growing it during that time and identified the things that I didn’t like to do and delegated and hired so that I didn’t have to do those things.”



Do you buy or sell that Scott Miller made a critical mistake when he delegated tasks that he didn’t like doing?




In the last 2 weeks, I’ve heard 3 different business owners reflect on the reasons they began reorganizing the structure of the business, building systems and processes, and delegating tasks. All 3 identified a failed attempt to sell their business as the main reason. Somebody literally told them, ‘Hey, I’m not interested in the business unless you’re coming along with it.’


As an Exit Planning Advisor, listening to a business owner talk about delegating and hiring is music to my ears. It is easily one of the top 3 things that all business owners can do to increase business value.


In Scott Miller’s case, he didn’t do it because someone told him to, and he didn’t do it to create business value – he did it because he was plain sick of doing certain things every day. In the end, his reason for doing it doesn’t matter. The fact that he began delegating at this point was absolutely instrumental to the eventual sale of the company for a 3.5x multiple. 


Continue reading “Miller Restoration: 3rd Time’s a Charm”

Why Business Owners Should Fear Exit Planning

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.

After a very brief hiatus, Breakfast at Epiphany’s is back – and better than ever.

Due – in part – to a recent uptick in demand for our services, yours truly got a sweet new title: Exit Planning Advisor.

It’s a definite blessing, and certainly part of the vision I had for my future with the firm when I joined a little over a year ago.

For the prospective client, very little changes. Kevin Eismann (Attorney/MBA/CEPA) is still the lead consultant. His unique blend of education, professional experience, and business acumen is the reason Epiphany Law is the premier source of Exit Planning in the Fox Valley.

The new guy simply provides an extra set of eyes and ears to sit in on your conversations. I also bring an interesting new perspective to the table: As a ‘millennial’, I’m naturally inclined to process information through the eyes of a business owner’s potential buyers/successors.

Compare that to most respected business consultants who – rightfully so – are well-seasoned, experienced, and trained to see the world exactly how business owners do. I’m inclined to see it with a twist. This allows me to chime in from time to time playing “devil’s advocate”. That perspective is particularly valuable to business owners selling or transitioning to a younger generation.

The Emotion of Fear

I talk a lot about emotions in this blog. I don’t know. Maybe I’m an emotional guy.

I asked my fiancé, Morgan, what she thought: “Eh… Yeah, kind of.”

Thanks babe. Appreciate the love.

She did go on to explain that with big decisions I tend to spend a lot of time analyzing and thinking things through, but when it comes down to it I will go with my gut. That made me feel marginally better.

It’s interesting that she would bring up decision making, though. Today’s post is all about how one emotion – fear – plays a huge role in influencing strategy and decision making.


Fear plays an interesting role in our society. Sometimes it manifests itself in response to a legitimate threat to our wellbeing. This emotion was extremely valuable in more primitive times – say, thousands of years ago when day by day survival was anything but a given.

Fast forward to present day, and many of us are blessed to be able to navigate through an entire lifetime with less than a single handful of true life-threatening experiences.

From a purely logical standpoint, one may try to assume that fear plays a lesser role in today’s society. After all, it’s original adaptation and purpose – survival – is no longer the prevailing purpose of our lives.

People much smarter than myself indicate that assumption is far from the truth. According to Ahmad Hariri, a professor of psychology and neuroscience at Duke University, “Change has occurred so rapidly for our species that now we are equipped with brains that are super sensitive to threat but also super capable of planning, thinking, forecasting and looking ahead… So we essentially drive ourselves nuts worrying about things because we have too much time and don’t have many real threats on our survival, so fear gets expressed in these really strange, maladaptive ways.”

In other words, the fear-center of our brain is still very-much alive. But it doesn’t just sit around patiently waiting for the once-in-a-blue-moon instance where it truly needs to be used. Instead, it continues to be used by our brains on the daily.

In the absence of true threat, our brain has figured out how to conjure up illusions of threats to our existence.

Dr. Karl Albrecht concludes that ALL of these illusions stem from one of 5 core fears common among humans.

  1. Extinction – The fear of literal death.
  2. Mutilation – The fear of damage to one’s body.
  3. Loss of Autonomy – The fear of immobilization, imprisonment, or other loss of control.
  4. Separation – The fear of rejection.
  5. Ego-death – The fear of public humiliation or self-disapproval.

Why Business Owners DO Fear Exit Planning

Without question, there is underlying fear (some real, some self-conjured) at play for business owners who consider Exit Planning as a resource. I want to expose those fears for what they truly are, and discuss whether they are illusions of the mind or justified concerns.

1) Fear of getting old.

Through numerous conversations with business owners and years of research into the field of Exit Planning, it’s apparent to us that the departure from business ownership signifies “the end” of youth for many. The words “I sold my business” literally equate to “I’m old”. Ouch.

But old age isn’t one of the 5 core fears common among humans.

So what exactly is the underlying fear? At first blush, one may assume it to be death itself. People who fear old age are really fearing death, right?


We have to be careful about making sweeping generalizations in this arena, as each individual is different. However, in our experience, it is actually more common that the classic “old age” fear is more closely associated with an Ego Death fear. In this case, being old equates to a dramatic loss of self-worth.


Exit Planning = Old Age.

Old Age = I’m worthless (Ego-Death).

I fear Ego-Death; Therefore, I fear Exit Planning.


One of my favorite quotes is from Abraham Lincoln, “It’s not the years in your life that count. It’s the life in your years.” Every day is a blessing, and making the most of it is simply a matter of choice. Those who choose to live with that perspective are able to find meaning in spite of a number.

Bottom line: Aging is a state of mind. If you think you’re old, you are. If you think you’re young, you are. Retirement has nothing to do with it.


2) Fear of being bored.

Make no mistake, simple “boredom” is relatively easy to cure for people who value themselves and have passion for life outside of work. We live in an era of limitless activities and hobbies for people of all walks of life. One simply has to open their eyes and give it the “ole college try”.

In our experience, those worried about “boredom” are covering up a much deeper-seeded fear. Once again, it’s Ego Death. This time, self-deprecation stems from a feeling that their value as a human being is intrinsically attached to the title on their LinkedIn profile.

If you look in the job description of most business owners, you will find the word “workaholic” as a prerequisite. Decades of painstakingly building a business hard-wires the need to be “productive” in one’s DNA. However, most will tell you that mowing the lawn and working around the house does provide the same level of satisfaction as spending a full day at the office.

But why? Work is work, isn’t it?

Many business owners describe their passion for the job as, “It’s all on me.” The level of responsibility is unmatched: Quite literally, the entire livelihoods of employees, families, and – in some cases – entire communities depend on you. Over the years, the relationship between business and business owner becomes almost symbiotic – that is, they need each other to carry on.

It’s the feeling of being needed that drives the productive nature of many business owners. While the relationship is alive, few things provide more satisfaction. When it’s over, many find themselves asking, “What’s the point?”


Exit Planning = I am not a Business Owner.

I am not a Business Owner = I’m no longer needed (Ego-Death).

I fear Ego-Death; Therefore, I fear Exit Planning.


Business ownership creates an illusion of high self-esteem. It isn’t until the former is abruptly ripped away that the problem is exposed.

For business owners who actually want to deal with the issue, there is truly no better resource than Exit Planning. The best Exit Planning consultants take emotional challenges of business departure very seriously, making it a staple in their process. That is, they dedicate several hours to the conversation – forcing clients to truly consider the impact that retirement will have.


3) Fear of consultants.

Business owners of the D / C personality type (DiSC Personality Profiles) are particularly prone to this, but for different reasons:

C-style personalities take enormous pride in their expertise and show tendencies to fear criticism – no matter how constructive it may come.

D-style personalities take enormous pride in their independence and show tendencies to fear giving up control of any kind.

Type-D “Logic”:

Exit Planning = Hiring a Consultant.

Hiring a Consultant = Giving up Control.

Giving up Control = Ego-Death.

I fear Ego-Death; Therefore, I fear Exit Planning.

Type-C “Logic”:

Exit Planning = Hiring a Consultant.

Hiring a Consultant = Potential Criticism.

Potential Criticism = Ego-Death.

I fear Ego-Death; Therefore, I fear Exit Planning.


If there is one message that we consistently drive home with clients, it’s this: “It’s your business, not ours. You don’t have to listen to our advice. We are simply here to provide recommendations based on our years of experience working with owners that were once in your shoes.”

If you avoid hiring someone because they bring nothing to the table – you are a wise.

If you avoid hiring someone because they know more than you – you are a fool.

Why Business Owners SHOULD Fear Exit Planning

Business owners should fear not what Exit Planning is, but the root cause of its existence as a practice.

Consider for a moment the first time you heard of “Exit Planning”. With a great degree of confidence, I’d venture to guess that most have learned about it within the last 5 years. I’d be shocked if you knew about it prior to the Great Recession.

Why is that? Why does it feel like this is such a new and growing idea?

Did we just begin buying and selling closely held businesses in the past decade?

Of course not. In a free economy, businesses transactions have taken place from the time the first one closed its doors.

The real reason is that selling a business the way you want, at the time you want, and for the price you want is getting harder and harder with each passing day.

To be fair, selling a business has never been “simple”. On a scale of complexity, it’s always been closer to “figuring out your wife’s mood” than “figuring out your dog’s mood”.

These days, the scale has been flipped into overdrive. Vastly more complex, we are now talking about a scale that includes “figuring out your pregnant wife’s mood”.

One needs only to have a rudimentary understanding of supply and demand economics to understand what I mean.

Baby Boomers own 67% of private businesses in the United States. Let me repeat: two out of every three small businesses are owned by individuals aged 54 to 72.

Two out of every three private businesses in this country are owned by someone that is VERY NEAR normal retirement age.

That, my friends, has the makings of a mass exodus.

What happens when the market becomes flooded with businesses trying to sell? Is that an attractive situation for business owners who need to net big money in order to retire?

Nope. When supply abruptly exceeds demand – we call that a buyer’s market. The proportionately few individuals that are looking to scoop up small businesses will become extremely picky. Businesses who don’t make the cut will sell for pennies on the dollar – if they sell at all.

Roughly 10 – 15 years ago, very smart people saw this trend coming. In response, they created a practice called Exit Planning – something to teach business owners how to prepare for the sale of their business. I guess it took a while for word to spread.

I have news for you: the floodgates have begun to open. Brokerage firms are reporting that business sales are at all-time highs.

The sliver of good news, for business owners selling soon: Your potential buyers have extremely easy access to capital. For the time being, demand for private businesses is keeping up with the supply on the market. That will not always be the case, particularly as interest rates continue to rise.



The knee-jerk reaction of many business owners is to fear Exit Planning for what they associate it with: A threat to the Ego.

By digging a little deeper, it’s easy to see that Exit Planning itself is in fact acting as the scapegoat for pre-existing character flaws that are likely to be exposed regardless.

Business owners SHOULD fear Exit Planning because of what its existence represents:

Businesses are becoming HARDER TO SELL. Business owners who don’t capitalize on a business sale lose control of their future.

Now THAT is a legitimate fear.


Want to take back control? PLAN. FOR. YOUR. EXIT. 


Give us a call or shoot me an email if you have more specific questions!

Thanks for reading! To subscribe to our weekly content, you can enter your email on our homepage. You can also follow me on Instagram (@kelton.official), where I regularly post links to new blogs, as well as random pictures of my life.

Exit Planning: Make it Rain

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.


First, a quick recap of where we’ve been on the Exit Planning parade:

What is Exit Planning?
How long does Exit Planning take?
Transfer a Business to Children
Private Equity
Due Diligence
Selling the Family Farm

Today, a new perspective: Making STACKS by participating in Exit Planning.

That’s right. I said it. Stacks.


Skrillas. Cheddar. Guacamole. Benjamins. Cabbage. Dough. Paper.

Whatever you want to call it. We’re talking about the same thing here: MONEY.


That beautiful, disgusting green parchment that people will die for and kill for.


What if I told you that you could make money by spending 40 hours in the next year focusing on Exit Planning?

The natural question is: How much?

What if I said $400? Probably not worth it, right? Most business owners probably value their time a little more highly than that.

What if I said $6,000? Maybe… $150 / hour isn’t TOO bad…

What if I got crazy on you and said $80,000? $2,000 / hour.

What if I said you could easily exceed that?

Fair. If I was in your shoes, I probably wouldn’t believe it either. There are too many frauds out there these days looking to make a quick buck.

But before you close the page, please hear me out.

This isn’t some magic pill that instantly helps “cut the fat” from your business. No, what I’m talking about is much more “pushups and situps” than it is “scientific breakthrough”.

It requires sound business strategy, commitment, and a long-term focus.


Making Stacks

Exhibit A

If you are a business owner, one of two methods of valuation apply to your business:

  1. The business is worth the fair market value of the assets it owns
  2. The business is worth a multiple of the income it generates


1) Adjusted Book Value

If a business is completely dependent upon the business owner, that business will likely be valued based upon an adjusted book value of the assets on its balance sheet.




      Current Assets      Current Assets
            Cash……………………………… $50,000            Cash……………………………… $50,000
            Accounts Receivable……… $200,000            Accounts Receivable……… $160,000
            Inventory………………………. $50,000            Inventory………………………. $30,000
      Fixed Assets      Fixed Assets
            Equipment…………………….. $400,000            Equipment…………………….. $300,000
            Land……………………………… $50,000            Land……………………………… $60,000
            Building……………………….. $200,000            Building……………………….. $220,000
TOTAL ASSETS……………………. $950,000 **TOTAL ASSETS……………………. $820,000**

Adjusted book value also applies if there are major risk factors that prevent the transfer of customers, revenue and ultimately the income stream to a new buyer.


2) Multiple of Income

If a business IS transferrable, a new valuation method applies:

EBITDA * Risk Multiple = Value



EBITDA………………………………………….. $300,000
Risk Multiple Range………………………….. 3x – 6x
Business Value…………………… $900,000 – $1,800,000
1) Adjusted Book Value vs 2) Multiple of Income

It doesn’t take a rocket scientist to understand that small business owners want to be on the green line.

Exit Planning does that.

It takes a business that would be on the white line, and – using sound business strategy – helps reorganize the business so a future buyer will see them as a “safer” investment.

In this case, simply moving from the white line to the lowest possible value on the green line means an increase of $80,000 in value.


Exhibit B

The next step in the Exit Planning process is taking a business that is situated on the green line and making calculated steps to move them up.

The average small business has a myriad of risk factors that – when seen by a potential investor – serve to constrain the value toward the bottom of the green line.


A good Exit Planner knows what those risks are and tells you to correct them so you can increase your value.

A great Exit Planner gives you tools, advice, and essentially becomes an active stakeholder in your business to help you get the job done.


Some examples of risk factors that we see in small businesses:

Weak culture

Poor communication

No long term strategy

High customer concentration

Weak management team

No contingency plan


Identifying when you have a risk and telling you to correct it is easy. Our process is literally built for that.

We also have tools and expertise to share that can help make change happen.



Exit Planning is THE way to maximize value as a business owner approaches retirement.

Obviously true potential depends on the facts involved, but you know that old adage “the sky is the limit”? Yeah, it applies here.


Cynical minds will say I “made up” numbers to serve my own agenda.

My response: Yes. You are correct. Those are fictional numbers. I did not think it a prudent idea to throw balance sheet and income figures from our actual clientele up on a public blog. However, I needed numbers to help you visualize and solidify the concept. In the end, this isn’t a submission to the Harvard Business Review. It’s a casual blog dedicated to teaching complex subjects in a way that people can easily understand. We accomplished that purpose today.


Last thing: what I did here – particularly as it relates to the art and science of business valuation – is EXTREMELY rudimentary in nature. Individuals who want to learn more should seek expert counsel.


Give us a call or shoot me an email if you have more specific questions!

Thanks for reading! To subscribe to our weekly content, you can enter your email on our homepage. You can also follow me on Instagram (@kelton.official), where I regularly post links to new blogs, as well as random pictures of my life.

Protecting What’s Rightfully Yours

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.


Asset Protection

Asset Protection is a type of planning intended to safeguard one’s assets from creditor claims.

Aaaaaand most of you have already tuned out.

That’s the challenge.

It’s really difficult to write about complex legal topics in a way that makes sense.

I mean… Creditor? Safeguard?

They aren’t quite on the level of, “hippopotomonstrosesquipedaliophobic” (the fear of long words).

But still.

We don’t use those words in our daily life, so when the brain reads them it has a tendency to shut down.

I guess that’s why I’m here.


Please don’t absquatulate, I resolve to disambiguate this axiom.


Let’s Try Again

Asset Protection is a type of planning that helps you protect your assets from someone trying to get them.

So… A bank vault provides asset protection?

Well, yes. But that’s not the kind of Asset Protection I’m talking about.

I’m talking about Asset Protection in the world of lawyers, judges, and juries.


So tell me, who would try to come after your assets by using lawyers, judges, and juries?

Someone that’s suing you would, right!?


Right… But Kelton, I’m a good person. I’m not going to get sued. So does that mean I can stop reading?


There are over 100 million new cases opened in the United States each year (fun fact: that’s over 95% of the WORLD’S lawsuits). Out of those, how many times do you think the person getting sued said, “Yeah. This isn’t a surprise. I’m a bad person. I was planning on getting sued.”

Probably not too many.

GOOD people get sued all the time in this country. Life happens. Mistakes happen.


Asset protection is about putting your assets – your cash, your investments, your property – inside the right vehicles so that even if you make a mistake, nobody can take them!


Wait, what? Are you saying there are places I can put my money so that – no matter what happens – people cannot sue me and take it?

Yes. That’s exactly what I’m saying.


Asset Protection Vehicles

Here are some basic Asset Protection vehicles to be aware of:

Personal Exemptions

Homestead: In Wisconsin, each single individual is protected for up to $75,000 of home equity. For a married couple, this means $150,000 of home equity is “untouchable”.

Life Insurance / Annuity Contracts: In Wisconsin, each single individual is protected for up to $150,000 of cash value in life insurance and annuity contracts. For a married couple, this means $300,000 of cash value is “untouchable”.

Retirement Benefits: In Wisconsin, effectively ALL value that is allocated to qualified retirement accounts (401k, IRA, Pension, Disability Benefits, Profit Sharing Plans) is protected.

Irrevocable Trusts: In Wisconsin, effectively ALL assets that are gifted / sold / held by an irrevocable trust are protected.


There are many other strategies that can be utilized, but explanation of those strategies requires too many big words.

Regardless, the point has been made.


The Catch

When something sounds too good to be true, it usually means there is a catch.

This time, the catch is fairly straightforward: You cannot move assets around after you have committed the act that leads to a potential lawsuit.

Meaning, you can’t hit someone with your car, and then transfer all your assets into an irrevocable trust. It doesn’t work that way.

You need to do things ahead of time. Just like you can’t buy a better homeowner’s policy after your house burns down.


Common Asset Protection Clients

These are the people who are most likely to be the target of a lawsuit, and therefore benefit the most from diligent asset protection planning:

  • Medical Professionals
  • Financial Professionals
  • Lawyers
  • Architects
  • Engineers
  • Recipients of Large Inheritances
  • Business Owners
  • Signors of Personal Guarantees
  • Officers of Public Companies
  • Owners of Boats, Airplanes, etc.
  • Real Estate Investors
  • Independent Contractors
  • Celebrities
  • Wealthy Spouses
  • Children of Wealthy Individuals



When you put together an asset protection plan with Epiphany Law, you get an expert opinion on where you should put your assets to achieve maximum protection.

Better yet, you get a list of action items and a due date for completion.

We say, “Hey, Mr. Client. In the coming year you should focus on putting the maximum amount possible in your fully protected 401k and IRA account. Then next year, you should come back and meet with us about creating an irrevocable trust to put your family cottage in.”

Nobody can do everything all at once. But everyone can take palatable, bite-sized steps toward protecting more of their assets.


Give us a call or shoot me an email if you have more specific questions!

Thanks for reading! To subscribe to our weekly content, you can enter your email on our homepage. You can also follow me on Instagram (@kelton.official), where I regularly post links to new blogs, as well as random pictures of my life.

What can “The Office” teach us about Non-Compete Agreements?

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.



Fans of NBC’s hit show “The Office” will enjoy this one.

“I quit.”

Midway through Season 5, Dunder Mifflin’s fun-loving, crass, brilliant, idiotic, borderline-bipolar boss (Michael Scott) shockingly and abruptly hands in his two week notice.

The episode closes with Michael announcing: “You have no idea how high I can fly.”

For the first-time viewer, it’s an altogether jaw-dropping moment.


What happens next is a case study in why ALL companies must have Non-Compete, Confidentiality, and Non-Solicitation agreements in place for their key employees.


The next episode opens with Michael playing out his remaining two weeks as Regional Manager. Within the first 8 minutes of the episode, his persona spirals from taunting coworkers with his “I don’t give a f*** because I’m outta here” attitude – to legitimate fear when he finds out that the job market is bad – to utter desperation as he scrambles to steal company information and poach employees in an ill-advised attempt to start a rival paper company.

The episode culminates in a scene where Michael is literally sitting on the floor of the office – just out of sight of the interim boss – begging his former coworkers to join him on his new business venture. Nobody obliges and eventually Michael is escorted from the premises.

The camera shifts to receptionist Pam Beesly, who – for a brief moment – seems to contemplate all of her life’s decisions. Never a risk taker, Pam experiences a moment of impulsivity as she gazes upon an office that has just experienced major upheaval. As if sealing her own fate, she mutters, “Oh no…”, before standing up and running after Michael.

In that moment, the Michael Scott Paper Company is born.

As the remaining episodes of Season 5 play out, Michael Scott Paper is able to undercut Dunder Mifflin’s prices and steal away dozens of clients.


Let’s tie this into real world insights.


The Agreements

The opening remarks indicated that all companies should have three Agreements with their key employees. That might be a little aggressive. I’ll soften my stance:

All companies should understand what these agreements do, and consider the benefits of implementing them.

What are they? I repeat:

Non-Competition. Confidentiality. Non-Solicitation.

In theory, they can all be standalone documents. In reality, most companies mash them together, wrap a neat binder around them and call the whole deal an Employment Agreement.


If we pick it apart, here’s what each section says:



Mr. Key Employee, by signing this agreement, you are specifically restricted from:



Working for;

Associating with;

(Fill in the blank);

Any business that is substantially similar to our company, and operates within ___ (fill in the blank) miles of our current location.



Mr. Key Employee, by signing this agreement, you are specifically restricted from:

Using or disclosing our proprietary information (including customer lists, pricing methods, vendors, etc.)



Mr. Key Employee, by signing this agreement, you are specifically restricted from:

Encouraging company employees at (fill in the blank) location;

Encouraging company employees who you had direct relationship with;

Encouraging (fill in the blank)-level employees of the company;

To terminate employment with the company or otherwise solicit such individuals in a way that would diminish that employee’s service to the company.



These restrictions generally become effective upon the employee’s official hire date and may last up to 24 months after termination (depending upon a bunch of legal factors).


Would these agreements have stopped Michael Scott from starting his own company, while stealing clients and other employees in the process? Probably not. His character embodies .1% critical thinking.

BUT it is likely that any one of them would have given his former employer, Dunder Mifflin, legal recourse to shut the company down the moment he started it.

Having all three is an iron-clad no-doubter. Point. Set. Match. Game. Game Over. End of Game: Dunder Mifflin.


In the end, I wouldn’t rewrite a single line of “The Office”. It is one of the single greatest comedic masterpieces ever created.

But unless you want your business to become the inspiration of the next great comedic masterpiece, I recommend protecting yourself. The Agreements are a good start.


Give us a call or shoot me an email if you have more specific questions!

Thanks for reading! To subscribe to our weekly content, you can enter your email on our homepage. You can also follow me on Instagram (@kelton.official), where I regularly post links to new blogs, as well as random pictures of my life.



Private Equity

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.


The business model of a private equity firm is easy enough to understand. Right?

Per “Private equity is composed of funds and investors that directly invest in private companies, or that engage in buyouts of public companies, resulting in the delisting of public equity. Institutional and retail investors provide the capital for private equity, and the capital can be utilized to fund new technology, make acquisitions, expand working capital, and to bolster and solidify a balance sheet.”

Uhhh… What?

Don’t worry, I got your back.


Here’s how it all begins: A group of individuals (collectively, the PE firm) raise money by presenting an investment strategy to other companies (financial institutions, for example) and wealthy individuals.


Once money is raised, the investment period closes. The PE firm takes the money they raised and – following the core investment strategy – buys businesses.


Once a business has been purchased, the firm uses their expertise to manage the business for a period of time (5-ish years) before selling it (either back to the management team or to an entirely new party). If they’ve done their job successfully, the value of the business has grown, and they have a net profit to take home to their own investors.


*PE Firms usually want to buy a majority stake (over 50%) in the businesses they acquire. Why? Simple: They want to call all shots.



XYZ Equity is a new PE Firm. Their core investment strategy includes the following:

  • Industries:
    • Niche manufacturing
    • Business services
    • Food processing and packaging
  • Company Characteristics:
    • Enterprise values ranging from $5 to $50 million
    • Stable and consistent cash flow
    • Midwestern location or focus

XYZ Equity conducts multiple presentations of this core investment strategy in front of potential investors. Thanks to the soundness of their strategy and the experience of their consultants, they raise $10 million in the initial round.

XYZ Equity goes shopping for companies that meet their criteria.

XYZ Equity buys a 100% stake in AB Drilling, Inc., a niche manufacturer of Deep Sea Drilling Equipment in central Indiana, for $3.5 million.

It’s an ideal acquisition for XYZ Equity, because one of their senior consultants previously owned a profitable heavy-equipment manufacturing company, and two more of their consultants have extensive engineering backgrounds.

Over the course of 2 years, XYZ Equity invests another $1.1 million to grow the company, and successfully flips it to a competitor for $7.6 million. A $3 million gross profit!


Appealing to a Private Equity Firm


So that’s all fine and dandy, but the real question is… How do you – the small business owner – take advantage of Private Equity as a resource to sell your company?

It depends.

All of these PE firms are looking for something a little different.

Lucky for you, I did the research. Here are the criteria for six PE firms that work with Wisconsin businesses:


Mason Wells

Lubar & Co

Progress Capital Group

Lakeview Equity

PS Capital Partners

Blackthorne Partners

Minimum Size

$5 million EBITDA

$5 million EBITDA

$500k EBITDA

$5 million Enterprise Value

$10 million Annual Revenue

$1 million EBITDA

Geographic Focus

Midwestern US

Midwestern US

Within 2 hours of Milwaukee, WI

Midwestern US

Upper-Midwest US

Southeastern WI

Facilitate MBO?




Will Accept Minority (<50%) Ownership Stake?




   Building Products


X  X



   Consumer Goods















   Financial Services







   Healthcare Products




   Healthcare Services



   Niche Manufacturing








   Real Estate      
   Specialty Distribution




   Specialty Services





*Keep in mind that these are general guidelines. In many cases, PE firms have the ability to remain flexible with their investment criteria. It is recommended that business owners contact a PE firm directly to discuss any potential investment opportunity.


Meeting the initial “screening” criteria of a Private Equity firm is just the beginning. Moreover, ALL Private Equity firms are seeking companies that meet the following requirements:

  • Strong, experienced management team
  • Positioned for future growth
  • Limited customer concentration
  • Non owner-dependent
  • Competitive advantages
  • Solid strategic vision
  • Stable financial history
  • Quality reputation
  • Realistic expectations


Epiphany Law’s Exit Planning Program is designed to prepare a business for sale. It is designed, specifically, to help a business become more attractive in the eyes of a 3rd party buyer – like a Private Equity firm! It addresses each of those ^ criteria, and many more.


Your first step is completing a State of Readiness assessment, which offers an unbiased opinion on the preparedness of YOUR COMPANY for a transition / sale. If you’re ready, great! Keep up the good work until it’s time to hit the ‘eject’ button. If you aren’t, we will recommend ‘next steps’ to get you where you need to be.

Give us a call or shoot me an email if you have more specific questions!

Thanks for reading! To subscribe to our weekly content, you can enter your email on our homepage. You can also follow me on Instagram (@kelton.official), where I regularly post links to new blogs, as well as random pictures of my life.

What is Exit Planning?

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.


If you would be so kind, please share this with others. The madness needs to end. People need to know what Exit Planning is. Thanks in advance!


If you’ve been following this since the beginning, you may remember that I wrote a post with this same title last November.

Fast forward 6 months, despite many related posts and marketing efforts, I remain convinced that people still have no clue what I do.

That’s on me. I haven’t found easy, simple ways to explain it.

All of that changes now. For once – and for all…


What is Exit Planning?

From the dawn of time, business owners have sold their businesses just like they would sell their homes:


“Alright, I’m sick of doing this, I want to retire.”

*Contacts Business Broker* *Business Broker lists the business for sale* *Interested parties make offers*


Everything goes pretty smoothly until an offer is accepted.


“Sweet, I have offers. I’ll accept the highest one.”

*Accepts best offer.* *Interested buyer conducts due diligence, finds a bunch of things wrong with the company.* *Offer is ‘renegotiated’.*

“Damnit. That’s a lot lower than before.”


At this point, the business owner is exhausted after spending MONTHS negotiating the deal. They feel mediocre and insecure due to all the nit-picking that the buyer is doing.  They are stuck between a rock and a hard place – backing out means restarting the whole painstaking process and trying to find a new buyer, but moving forward means accepting a reduced offer.


“I just want this to be over with. Tell them they have a deal.”

*Deal closes* *Business owner goes to meet with accountant*


“Oh shoot. I forgot about taxes.”

“Pay off debt? I thought the buyer was assuming my debt!!”


And THAT is why 75% of business owners who sell their business feel “profound regret” about when, why, and how they sold within 12 months of the sale.


Don’t sell a business like you would sell a home

Selling a business is like WAY more difficult than selling a home.



When you sell a home, you have thousands of potential buyers.

When you sell a business, you have a handful.


When you sell a home, your buyers are not highly educated and often let emotion or feeling dictate when making their decisions.

When you sell a business, your buyers are highly educated and rely on concrete fact and skilled negotiations when making their decisions.


When you sell a home, an accepted offer may lead to a closing in a matter of days (and that offer is unlikely to change).

When you sell a business, an accepted offer may lead to a closing in a matter of months (and that offer is likely to be renegotiated along the way).


Practice makes perfect

Your kid wants to get better at basketball. What do you tell them?

“Practice! You need to get your butt out on the court instead of playing Fortnite all day.”


Heed thine own words.


You want to exit your business smoothly? Here’s what I tell you:

“Practice! You need to put the time in and plan out your exit if you want to avoid disaster.”


Exit Planning offers business owners an opportunity to learn, practice, and strategize in a safe environment. It offers business owners the opportunity to simulate the Due-Diligence experience so they can correct areas of concern before a potential buyer ever sees them.


Business owners get a “report card” and a detailed list of action items that they would be wise to accomplish before listing the company for sale. If they want our help in implementing the plan – great, we can do that! If not, there’s no hard feelings.


Succession Planning

But what if a business is being passed to family or management team? In that case, is there anything to practice?


Read this.

Basically, all the same principles apply AND we are faced with the additional challenge of helping your successor obtain financing.


Epiphany Law will conduct Due-Diligence on your company and tell you what to do in order to sell your business for more money.


Business Owner Beware

Exit Planning is a new practice, and it is becoming “trendy” among advisors who see it as an opportunity to generate new business.

I can vouch for the process we have. We give WAY more value than we receive for our services. I cannot definitively say the same for others.



Give us a call or shoot me an email if you have more specific questions!

Thanks for reading! To subscribe to our weekly content, you can enter your email on our homepage. You can also follow Epiphany Law on Facebook and LinkedIn for regular updates from the Firm. Finally, you can follow me on Instagram (@kelton.official), where I regularly post links to new blogs, as well as random pictures of my life.

How To: Transfer Ownership to Children

Legal matters, business strategy, and life perspectives from the mind of a non-attorney.

One of my life’s obsessions is empathy.

For those who don’t know what that is, empathy is the ability to understand and share in the feelings of another.

Put another way: It is the ability to put yourself in someone else’s shoes. To understand what they think, how they feel – and beyond that – why they feel the way that they do.

Empathizing with someone is one of the kindest, purest things you can do for another human being. It takes TIME to empathize. It expresses true care.


Beyond that, the practice of empathy helps YOU succeed in life. By empathizing, you instantly become a better communicator.

Practicing Empathy


Here is how most people give advice:

Friend: “My boss is such a jerk. He treats me like I’m an idiot or something, constantly patronizing me. I don’t know if I can handle working there anymore…”

Advice-Giver: “Yeah, I remember when I had a boss like that. I wouldn’t put up with that if I was you. You need to get out of there. Just move on? You deserve to be treated better than that.”

Friend: “You might be right…”


Here is how someone practicing empathy gives advice:

Friend: “My boss is such a jerk. He treats me like I’m an idiot or something, constantly patronizing me. I don’t know if I can handle working there anymore…”

Advice-Giver: “Yikes, that doesn’t sound good. Does he treat everyone like that?”

Friend: “Sort of. I’ve heard other people complain about it too.”

Advice-Giver: “Do you like the other people that you work with?”

Friend: “Yes, I really do. There are a lot of good people there.”

Advice-Giver: “Do you enjoy what you do?”

Friend: “Yeah, I actually love it. And they give me a ton of flexibility with my hours too. I just wish he wouldn’t treat me like that sometimes. It’s so frustrating!”

Advice-Giver: “That would frustrate me too. Definitely a confidence/morale killer for you. How do you respond when he talks down to you?”

Friend: “I don’t know… I guess I usually just not and bite my tongue. Try not to say something smart back to him, you know?”

Advice-Giver: “That’s definitely a good thing to do. It amazes me how some “leaders” can be so out of touch with the abilities of their employees. I had a boss like that once. Only thing I could say is that if you want something to change, you might have to experiment with how you respond to him talking down to you.”

Friend: “What do you mean?”

Advice-Giver: “Well, obviously you know the situation better than I do… But when you just nod and bit your tongue, he might walk away having no idea if you really understand what he said. It might kill you to do it, but you could try vocalizing your understanding, having more positive body language. I mean, don’t be overtly sarcastic about it, but force yourself to be genuinely positive and express your understanding. It might take a while, but eventually he might start treating you differently.”

Friend: “Huh. I never thought about that. I guess I could give it a try.”


Who gives better advice?


The best communicators are selfless. They take the time to gather more information. They figure out how the other person feels. Then they adapt their own actions/behavior/advice accordingly.


Communication is a huge key to the successful transition of a family business. As the current owner of the family business, you are in a great position to extend empathy to any children who are next in line.


Transfers to Children

Here are a few tips:

  1. If you want them, tell them. If there is an opportunity for them to “take over”, it is up to you to make it known. “Well they haven’t shown any interest” is a cop-out. Ask yourself why they haven’t shown interest. Talk to your spouse about it. There are likely some obvious reasons. If they aren’t clear to you, they may be clear to your spouse. Above all else, have an open and honest (non-confrontational) conversation with your kid(s). It’s up to you to be the leader that your family and your business needs. If you don’t do it, you will always wonder, “what if?”
  2. Don’t expect them to be you. It happens ALL THE TIME. There is a named successor. Maybe it’s the owner’s daughter. She has a solid role within the family business. Business owner: “I don’t know if this is going to work out. She just doesn’t have the sales skills to drive new business and that is an important part of what I do.” Stop it. Focus on her strengths instead of her one glaring weakness. Figure out if there is a way that you can restructure the business so that sales no longer fall on the owner’s shoulders… i.e. hire a sales team!
  3. Address concerns directly. If there ARE unavoidable concerns with your successor, address them directly. Don’t make backhanded comments hoping to send the message. Don’t embarrass them in front of other employees. And most of all, don’t sit on your concerns “hoping” that something will magically change. If you do, you are setting everyone up for failure.
  4. Don’t forget about non-family employees. Whether you made specific promises to key employees or not, don’t forget about them as you begin making a transition. Allow them to express any concerns, and let them be a part of the solution to those concerns. This will help them feel valued and “in control” as the transition begins to take place. Also, there are many ways to reward key people for their years of loyalty without giving them cash or a stake in the family business.
  5. Don’t get greedy. We see this one a lot too. A business owner will have an outstanding successor lined up, the transition of duties will go extremely smoothly and all-of=-a-sudden the business will experience a growth period. Of course, no formal agreements were made so the owner decides to hand on and reap the rewards a little (or a lot) longer. Make formal agreements and stick to the terms of those agreements, otherwise conflict is inevitable.
  6. Show them how to buy-in. It is entirely possible (likely, in fact) that you cannot afford to “give” the company to your successor. Don’t let this deter you from keeping the business within the family. If time is on your side, there are ways of helping your successor build enough capital to buy you out.
  7. Multiple children. The absolute worst thing you can do is ignore the conversation and keep the future of your estate a mystery to your children. In the face of mystery, most people begin to act very irrationally. Starving for clarity on the situation, they will formulate their own (false) set of facts to try and control the narrative. Depending on their outlook on life, those facts will be heavily slanted for or against them, and fracture within the family will ensue. This can all be avoided if you – the leader of the family – are willing to step up and provide a clear and well-reasoned agenda for how the business will be distributed. You should do it the moment you sense it becoming a concern among your children.


Above all, be selfless and practice empathy while exploring the possibility of business transition. For those that are able to do this, the logistics of “who, when and how” become exponentially easier. If you need someone to help you plan out the logistics, give us a call. J


As always, give us a call or shoot me an email if you have more specific questions!

Thanks for reading! To subscribe to our weekly content, you can enter your email on our homepage. You can also follow Epiphany Law on Facebook and LinkedIn for regular updates from the Firm. Finally, you can follow me on Instagram (@kelton.official), where I regularly post links to new blogs, as well as random pictures of my life.