Finding a great attorney can be a difficult task. Many factors need to be taken into account before this choice can be made. The person that is chosen to represent you not only is invaluable for dispensing legal information, but also offers strategic advice and has the ability to apply sophisticated technical skills to the legal issues at hand. Ideally one should seek to find an individual to serve as more of a ‘legal coach.’ Such a person would help to educate you to the maximum extent in regards to your specific legal situation and would offer the ability to take over as your legal council only when it is deemed necessary.

There are several things to be considered when deciding to select an individual as your legal representative and there are a variety of avenues that you can explore before you make your final decision. One of the most tried and true ways of receiving information has been around as long as civilization itself which is just by simple word of mouth. Personal referrals are an excellent source of information. Speaking with family, friends, co-workers, or other acquaintances is one way of gaining insight on specific individuals that could potentially qualify to represent you legally. Asking someone who has recently retained services for a similar situation from an attorney offers much insight.

Some may choose to refrain from obtaining information from personal referrals, as they feel that the legal issues in question are private. If this is the case, there are several different ways in which to obtain legal representation. Business referrals are another way to find out information about legal council that is available. Businesses that provide services to key members of the legal arena are current on the proceedings of law related incidents and occurrences. Local businesses have frequent contact with lawyers, which represent them on a multitude of issues.

Gathering information on the internet is also a way to locate potential advocates for your case. Using online legal directories gives you the opportunity to research legal representatives and what specific characteristics they have to offer. The Nolo Lawyer Directory is one web site that offers a comprehensive profile for each attorney in its database. This information runs the gamut on a variety of topics for each lawyer. It covers everything from attorney experience, education, and fees to his/her general philosophy on practicing law. This website also ensures that the legal representation in question has a valid license and is in good standing with his/her bar association.

If personal and business referrals and the internet are not substantial resources, you can always engage in requesting professional lawyer referral services. The Lawyer Referral Services Program (LRS) enables you to contact state bar certified lawyers in your area. LRS can be contacted can also be contacted online. When doing so, you should make sure to ask for which specific qualifications the referral service expects in order to list an attorney and how carefully the attorneys are screened.

Directors of your state or local chamber of commerce are another useful source of information. They are in touch with the happenings of the local community and have access to a wealth of information in regards to business lawyers and their proceedings. A director of a nonprofit group interested in your particular subject matter of your lawsuit would also be a good frame of reference to consider. For example, if your case for concern involved issues related to public reforms of surrounding property, it would be wise to consult with a local environmental group and ask for its advice.

Contacting a law librarian is another way in which to receive information on the available legal representation or current laws and community procedures. They can help identify authors in your state who have written books or articles on a particular subject that you can use to your advantage when doing research. Considering a specialist in lieu of a general practitioner is also an option. Selecting someone that is experienced in your specific issue could only aid in your defense.

Organizations such as male and female support groups can also be beneficial and useful resources to consider. They are good resources in regards to obtaining information on good divorce attorneys or attorneys specializing in family law. As is often difficult to find a decent divorce attorney, the insight of members in such organizations is truly beneficial.

Overall, when seeking and selecting legal representation, you have to consider a variety of factors and characteristics of the individual and/or firm in question. Ultimately, you need to choose an attorney with whom you feel a certain degree of comfort. Establishing a relationship with the individual who will potentially be representing you or your business legally is key. Upon interviewing a legal candidate, paying special attention to personal chemistry is crucial. Speaking with this person should evoke feelings of confidence and trust.

Other characteristics that should be apparent include the willingness of the attorney to work with you. One you entrust to represent you should be willing to help you acquire a good working knowledge of the legal procedures and principles that will be needed in order to deal with your particular situation. In addition, your legal council should speak with you in terms that you can understand. Communication is of the utmost importance. If there is not a complete understanding of legalese, make sure you ask a lot of questions.

Communication and understanding between you and your legal advocate should also include contact information and accessibility, the expectancy of prompt and immediate action, and the clear handling of legal fees.
In order to establish an effective relationship with your attorney, a several areas need to be examined. Everything from education and experience to a personal rapport and an acceptable level of comfort should be considered. After all, the person whom you select is an advocate on your behalf. He/she is not only representing your case, he/she is representing you.

Jeff Adams is a full time investor who has done over 350 deals and is a leading expert in the buying and selling of real estate. For more information visit http://www.FreeForeclosureCourse.com or sign up for a free seven day e-course at http://www.RealEstateWebProfits.com.

[tags]real estate investing, business, attorney, asset protection, legal advice[/tags]

If you have currently decided to invest in the vast opportunities available in real estate at the moment, the first thing to consider is that you need to have your financing securely in place before you can move forward. Now is an awesome time to invest, as there are so many bank owned properties, foreclosures, and pre-foreclosures out there. It is very much apparent that people are basically not able to afford the homes they originally purchased and are losing them left and right. If you have the right funding in place, now is definitely the time to invest and there are a variety of ways to go about when seeking to secure a deal.

Many investors have been recently establishing their financing through revolving accounts. Whether it is through a bank or a credit card, revolving accounts have increasingly become more substantial during a market for buyers. A revolving account is a type debt associated account where the balance that is outstanding does not have to be paid in full. Rather it is paid in installments, usually on a monthly basis. The borrower is required to make a payment that is dependent on the balance on the accounts. These payments are generally calculated with minimum interest rates and also with no property reduction included.

What a revolving account involves are the customer, the billing cycle, a credit card, and a creditor. The customer is the borrower who has accepted the account and all of the conditions associated with it. The billing cycle is the interval between each billing cycle and when each payment is due. The credit card, whether it is through a bank or other credit card company, is the actual confirmation of the money loaned. It can be in the form of and identification, a check, or other written request that allows the customer to obtain access to the revolving account. A creditor is the authorized lender who honors the loan amount or extends the credit limit amount. A creditor can be a bank, credit card company, or other party acting on behalf of the lender. An agreement is established between the lender and the borrower that provides for the use of the funds.

One such revolving account is a home equity line of credit (HELOC). Qualification for such a loan is a direct result of the amount of equity a homeowner has to offer. He/she can use this home equity as collateral on the loan. It is basically a bank credit card that is secured by a mortgage or deed of trust on the borrowers property. Many times it is taken out as a second lien on an already existing loan.

In addition to assisting individuals dealing with debt consolidation, financing via a HELOC is also beneficial to real estate investors, especially those purchasing real estate owned properties (REOs) and properties in foreclosure. Although it is often more of a high interest loan, it does offer the advantage to the borrower of receiving money fast. One major component to remember if opting to receive financing through a home equity line of credit though, is that it is directly attached your property, and failure to make the payments will inevitable result in loss of your house.

The most commonly used revolving accounts are those available on credit cards. A revolving credit card account incorporates a type of credit that does not define a fixed number of payments. Using credit cards to secure financing is another option that has proven useful to many investors. Credit card holders have the choice to either take out a cash advance or even borrower money from their accounts with checks.

It is genuinely an easy and uncomplicated process, but tapping into the funds that are available to you on a credit card does have a downside. This is because it usually requires a high transaction fee and/or interest rate. On the other hand, advantages of obtaining money in this way include allowing the customer twenty-four hour access to his/her funds.

Also, because the loan is an unsecured loan, other costly factors such as title insurance, appraisals, and inspection costs are eliminated. Receiving financing using this method would be the most cost effective in an investor was planning to incorporate it as a temporary means to an end.

Jeff Adams is a full time investor who has done over 350 deals and is a leading expert in the buying and selling of real estate. For more information visit http://www.FreeForeclosureCourse.com or sign up for a free seven day e-course at http://www.RealEstateWebProfits.com.

[tags]real estate investing, buying and selling property, financing, mortgages, loans, funding[/tags]

Properties sold at public auctions currently have some of the greatest profit potential in the real estate market. The number of homes and properties and foreclosures currently on the market is steadily increasing, so the time to take advantage of all of the deals that are available is now.

Before even considering bidding on a property, there are a few things to consider in order to insure the success of the deal. Attending several auctions even if you do not plan to bid on a property, is always a good idea. Familiarize yourself with the whole process and mingle with the other attendees. Not only are auctions a good way to see what is on the market, they are also a good place to network and connect with real estate professionals and others interested in real estate.

Once you have a clear understanding of what the auctioning process entails, it is important to do your homework. Researching the property is key. Make sure that you know exactly what you are getting yourself into. Know who has the title to the property as well financing that is already in place and any liens or encumbrances that are attached to the property. By finding out this relevant information, you can avoid any potential pitfalls and problems.

It is also beneficial that you realize that you are not dealing with the homeowner of the property. This translates to the either a lender, a mortgage company, a bank, or another corporations that has claimed ownership of the property is probably not emotionally attached to the property. They have the right idea. An investor should also avoid an emotionally attachment to any property he/she is attempting to bid on. Whether you are planning to keep it, flip it to another investor, or sell it, it makes more sense to just simply consider the property as another potential option for profit.

In addition to the many advantages, such as higher profit margins in a short period of time, an investor should also consider the risks involved. There are also disadvantages to buying a property at auction. Investing in real estate at a public auction is not without its own share of limitations and requirements. Deals are typically closed on an all cash basis which means that there is a lot of money necessary up front. Also, most of these homes are sold ‘as is’ and investors that have not had the property properly inspected are at a definite disadvantage. Always have the property viewed and checked prior to bidding on it.

Evaluate, the time, effort, and sweat equity you are willing to put into the house. If a house is in a good location but needs a lot of work, it still may prove to be profitable. Most properties that are structurally sound and do not have costly issues with plumbing and electrical, may still prove to be profitable.

It is also a good idea to know if the property is vacant or currently occupied. Dealing with the eviction process is never easy and if can be avoided, that is a definite plus. In addition, it is important to note whether or not current tenants are a part of the package. Some purchase agreements require the maintenance of current tenants. So although, this situation may not be problematic, especially if a buyer is planning to rent the home, it does offer some limitations that may be avoided if this contingency did not exist. Spending some time doing your homework will lead to less potential headaches and unforeseen problematic situation.

Jeff Adams is a full time investor who has done over 350 deals and is a leading expert in the buying and selling of real estate. For more information visit http://www.FreeForeclosureCourse.com or sign up for a free seven day e-course at http://www.RealEstateWebProfits.com.

[tags]real estate investing, foreclosures, auctions, buying and selling property[/tags]

When time is of the essence in regards to a business transaction, it is good to know the quickest avenues to take in order to locate the necessary information and connect with the necessary individual to be a part of the business transaction. Finding a notary public when you need documents done right away can propose quite a dilemma if you do not have one that you already refer to.

By definition, a notary is an officer who can administer oaths and statutory declarations, verify and prove signatures, and witness and authenticate documents. They are probably the only impartial entity within the mortgage lending process. Finding a notary that is reputable and trustworthy and is also efficient and expedient can be quite challenging, especially for the investors who are not yet familiar with the investment process.

When a deal has been negotiated and documents need to be completed and signed promptly, how does an investor locate a notary public, if he/she does not know where to find one? One way to find a notary is as easy as clicking a button. Thanks to the massive information that is readily available on the internet, finding whoever or whatever you need is not as difficult a task as it once was. Navigating the information super highway allows you access any information you may need.

In regards to finding a Notary, by visiting Notarypublic.com, you can view the national directory of notary publics. This directory offers local and nationwide mobile notary signing services to lenders, brokers, and title and escrow companies. The National registry of Notaries is another organization that provides useful information as well.

The National Notary Association (NNA) is professional notary resource that can be utilized. The education and support they provide to United States Notaries is substantial to their role of protecting the public. This organization was established in 1957 and is the leading authority on the office of the American Notary. In addition to presenting updates on the current United States Notary laws, it also advocates over 4.8 million notaries nationwide. The NNA includes high-demand professional programs and services and encourages consumer protection, just legislation, and technical initiatives.

Online closing, also known as eNotarization is a relatively new process that is greatly gaining notoriety in the real estate market. Technological advancements have made it possible to receive notarization almost immediately. Electronic notarization is a safe and secure procedure that is fast and effective. A notary initially meets with a borrower at the convenience of the borrower in order to review the documents for the loan. These documents can either be viewed on the website of the lending company or on the laptop of the Notary. Upon the completion of the review, the borrower electronically signs the documents in the presence of the notary.
The notary then electronically notarizes the documents and they are transmitted to the lending company immediately.

Electronic notarization also offers the benefit of less risk involved in the transaction. Because of its growing popularity among investors, the demand for digitally based transactions is increasing. For this reason, both in the government and in the private sector, more action has been taken in regards to new laws, requirements, and programs to protect them against fraudulent or unethical practices and predatory lenders. Trusted Enrollment Agent (TEA) program is being established in some states in order to protect important and sensitive information and also to identify and verify the authenticity of digital credentials. This program is being developed jointly with government contractors, medical professionals, and the NNA.

Another element of protection is the Electronic Notary Signature (ENS) that the NNA utilizes. The ENS makes electronically notarized documents tamper evident. In some states, such as Florida, Notaries are required to have a unique signature that is solely under their control, has the ability be verified and associated with a document, and can also show any changes or alterations that may have been made after the original document had been signed. This digital age offers the investor the ability complete transactions in a more direct, time efficient, and safe manner.

Jeff Adams is a full time investor who has done over 350 deals and is a leading expert in the buying and selling of real estate. For more information visit http://www.FreeForeclosureCourse.com or sign up for a free seven day e-course at http://www.RealEstateWebProfits.com.

[tags]real estate investing, notary public, property[/tags]

Unless you are work in or have some affiliation with a business oriented working environment, the concept of due diligence is probably irrelevant. But if you are associated and involved in the world of business, finance, or real estate, then due diligence is a concept that is very familiar to you and its presence is heavily incorporated.

So what does being a diligent investor entail? Well, diligence is synonymous with being meticulous, conscientious, and thorough. This combination may sound like the pre-requisite for having obsessive compulsive disorder (OCD), but realistically making sure that everything is in order and that all of your bases are covered during a real estate transaction is a positive thing. Making sure you know as many details about the property before the purchase is negotiated is really the best defense if an investor wants to make the best deal possible.

Doing research and finding as much information about a property of interest is of the utmost importance. Before even considering making an offer, investors need to physically visit the property, get comparable rates for other homes that have sold in the area, and do extensive research on the property. Knowing the exactly how much money you are willing to invest and the ultimate price you are willing to negotiate is an essential aspect of the deal. It is important to have a fixed purchase price that you are willing to adhere to. Knowing what you want and what you are willing to pay for it demonstrates a level of strength and integrity.

Due diligence clarifies and questionable areas of concern. Before becoming involved in any deal or signing any formal contract agreement, an investor has to evaluate several important areas. Information regarding the bank and lender responsible for the loan, financing currently in place, and the title holder are essential. Also, it is imperative that an investor is aware of any financial situations that are attached to the property, such as liens or taxes.

Doing due diligence is basically covering your ass-ets. Taking the necessary precautions and making sure that all necessary actions are executed to their full potential is at the forefront of any potential deal or agreement. Before making an offer on any home or property, no matter how sweet you think the deal is, an investor needs to gather as much information as he/she can. This just means basically just doing your homework. Make sure the who, what, when, where, and why questions are adequately addressed and answered prior to making an offer. Knowing exactly what you are getting yourself into can only be beneficial and could save you from a ton of headaches and unforeseen problems in the future.

Jeff Adams is a full time investor who has done over 350 deals and is a leading expert in the buying and selling of real estate. For more information visit http://www.FreeForeclosureCourse.com or sign up for a free seven day e-course at http://www.RealEstateWebProfits.com.

[tags]real estate investing, buying and selling homes and properties, due diligence, profits[/tags]

When you have a business, it is vital to monitor the cash position to ensure liquidity of the organization. You need to be able to pay your debts as and when they fall due. To ensure you can operate effectively it is vital to have a cash flow, not matter how simple to give you a snap shot of the business cash performance.

When you have a situation where you have a negative cash flow, this can alert you to potential problems within the business. The first thing to ascertain is whether this is a once off or a small hump which is typical for most business.

There is often a timing difference between the cycles of when you pay for things and you receive your income. You can look at debtor finance if you have a large portion of your cash flow invested in some large sales. If it is a small blimp there are ways to manage the cash flow with things like creditor payment plans and installments. This can assist in the short term.

It is also wise to analyze the cash flow cycle of your business and see how many days it is taking for you to receive your money. How long does it take between sale, invoice of product or service and payment of the invoice?

Depending on how long it takes to receive money in from your debtors, you may like to look at ways of speeding up the payment. For example, can you offer a small discount to encourage prompt payment? Can you offer a bonus to the purchaser for prompt payment? Can you look at altering your trading terms, if for example you offer 30 days, could you change this to 14 days? You can offer this to just new customers if you have a loyal old client base which would not look favorably on this type of change.

You can also investigate forms of payment as an incentive for people to pay you promptly. Do you offer bank transfer or credit card facilities or bill payment facilities? The more options people have of paying, the easier it is for them to action the payment.

Review your debtor system. Do you have the right structure in place to contact your debtors prior to the payment being due? Do you have a staff member or even yourself available to contact your debtors a few days prior to the debt being due? You can then politely mention the amount which is due and confirm they do not have any issues with the service, supply or goods. Amazingly enough, even though this helps your cash flow, when done in the right way this can be looked upon as a positive customer service provision.

Julia Nitschke is an Accountant, Mother and Business Author. She specialises in small business and assisting people to set up their own small business. To find out more visit

http://www.freebusinessplan.info

[tags]cash flow report, cash flow reporting, cash flow budgeting, cash flow sample, cash forecasting,[/tags]

This scenario plays out across America each and every day: you find that you will have long term business in a big city such as New York or Chicago, but your home base is in Las Vegas. You don’t need to move all your facilities on a temporary basis, but you do need to have a reliable office space to call home during the months ahead. When considering office rental, here are essential qualities to look for that will make your temporary situation pleasant, efficient, and profitable.

You should be able to walk in the door and get to work right away. A rental office should come furnished with executive-level offices that provide all the amenities you need. Nothing is more discouraging than being put in a position of having to receive clients in a subpar facility. The office should be in a reputable if not prestigious part of town, should have quality furnishings, and be ready and accessible when you are any hour of the day and any day of the week.

– An exceptional rental company will not only provide the facilities you need, it will also have built-in staff that is ready and willing to handle receptionist duties, as well as perform phone answering, clerical, and mail handling duties.

– A business cannot be run effectively without having basic communications systems in place. Look for an office rental that comes with copy, fax, and printing services; it should also provide high speed internet access and offer telecommunications packages for you to choose from.

– Because you won’t have the time or want the bother of cleaning, janitorial service should be available as well as any other maintenance services that may be required. Security alarms and/or guards or other type of systems should be in place so that you never have to worry about the office space at night.

– Conference rooms should be available from the rental company on-site or on request if they are needed. They should provide everything you need audio-visually to make professional presentations and hold meetings just like you would in your home office.

In short, your office rental should truly feel like a home away from home and should be a place where you can do business and receive clients confidently, knowing that your temporary facilities are helping you to maintain a professional image away from home base. You don’t have to sacrifice your high standards when doing extended business out of town, just be sure to do your homework and select a turn-key committed rental company that will provide you with the very best.

Virgo Business Center (http://www.virgobc.com) business center hosting a variety of entrepreneurs, creating a fertile environment in helping to grow your business. Art Gib is a freelance writer.

[tags]office space rental[/tags]

If you have a business, the lighting inside is a very important component of your interior which gives your clients that first impression when visiting and allows the employees to enjoy their work environment. Lights have many functions in a business.

Most business owners, though, just concentrate on the practical uses for their lights, but in order to really add some flair to the inside areas, you might want to add decorative lights such as commercial accent lighting.

These types of lights will enable you to spotlight certain areas of your business. This is a good option for those with retail showrooms, museums, or theaters. Many commercial accent lighting fixtures will be flush with the ceiling, while others will not require cutting into ceiling tiles at all, such as illumination fixtures on desks.

If you are uncertain which lights to pick, you should consult with an illumination expert for advice. That way you will be certain to have the right products for your lighting project.

There are many options for your accent lights, and choosing among them can seem like a daunting task. You will need to consider both the rooms job and what is in it you wish to highlight.

Some top quality manufactures will offer answers to these questions with an illumination expert, he/she will be able to help you narrow down your options for commercial accent lighting. He/she can recommend the best products for your job.

It will be important to follow his/her expertise and not just adhere to general tips and suggestions. There are many possible lighting choices and since every business is different, the lighting you need will be unique to your business.

There are many advantages to installing commercial accent lighting in your business. Many company owners do not want to have lighting fixtures that extend from the ceiling, rather they want light, but they want it delivered in the most subtle method possible, preferably from a recessed light.

Recessed accent lights are perfect, and even if you lease a building that has prohibitions on internal improvements, you can still put commercial accent lighting in. All you have to do is opt for retrofit fixtures which will wire into pre-existing fixtures and do not require you to cut holes in the ceiling for the back box.

Another benefit is that these lights can give you additional light where you might not otherwise have it. Extra light is often needed in many businesses, and it can increase safety and security.

Unlike many recessed lights, commercial accent lighting is adjustable. This allows you to quickly and easily change the position and what is being lit without having to change the entire fixture.

The brightness of commercial accent lighting will largely be determined by the bulb inside them. If you are looking to save electrical costs, you might want to take a look at HID or fluorescent fixtures.

These are energy saving options that are good choices for their respective fixtures. You will need to make sure that you get the right bulb or your fixture.

There are many fixture options, including those which use low priced incandescent bulbs, those for HID and other low voltage options. If you are not sure which you should pick, talk to an expert to help you make the best pick.

Choosing these fixtures is not difficult to do, but if you need assistance in finding the best commercial accent lighting for your business, it would be best to consult with an illumination expert who will help to guide you through the steps for the selection of these types of lights.

Residential Landscape Lighting Design specializes in top quality outdoor lighting, commercial lighting, and landscape lighting.

[tags]landscape lighting, residential lighting, parking lot, commercial accent lighting[/tags]

Most women experience some kind of vaginal infection from time to time between the onset of their menses and menopause and even beyond. Vaginal infections are not only painful, but like any infection they can become dangerous if they are not treated properly and in a timely manner. The symptoms of these types of infections are all pretty much the same; usually a test is required to determine the exact cause. Symptoms may include: odor, a change or increase in discharge (may be a variety of colors), redness and swelling, general pain, sexual discomfort, and pain or burning during urination.

Here’s a little bit of information about the three most common types of infections.

Yeast Infections

Many women may not be aware that a low level of yeast is always present in most women’s vagina’s. Yeast is basically a fungus and it tends to thrives in areas where that are warm and moist, which is why it is often present in the underarm area as well. Yeast infections occur in the vaginal area primarily due to some kind of change in the vaginal environment. For example, if a woman uses antibiotics or steroids, she may inadvertently be causing the yeast to multiply to out of control levels. Other causes may include pregnancy, menstruation, or even just the presence of sperm. There are many over-the-counter medications that a woman can treat herself with at home, but if symptoms persist and fever develops, she should contact her doctor immediately or go to the hospital.

Bacterial Infections

Bacterial infections are difficult to distinguish from others, but the symptoms are quite similar. As with yeast, there are organisms that naturally flourish and exist within the confines of the vaginal walls. These organisms are actually helpful in keeping down the level of harmful bacteria that may invade the organ; but some women, for unknown reasons, do not have appropriate levels of good organisms in their vagina’s and consequently sometimes bacteria will take control and cause an infection. Treatments are by prescription, and tests and a doctor’s visit are usually required in order to get well.

Parasitic Infections

Trichomoniasis is a sexually transmitted disease which may be suffered by both men and women but is most common in women. It is caused by an insidious one-cell parasite that can cause vaginal symptoms to appear within just a few days. It cannot be treated at home and requires a doctor’s visit and prescription medications to clear up. The bad news is that trich may cause infertility in both men and women; the good news is that with treatment the parasite will be completely killed and the sufferer is cured.

Make sure to contact a doctor when symptoms of a vaginal infection appear, and get it taken care of as soon as possible.

Demure Lady, LLC (http://www.demurelady.com) is an online store with a mission to bring personal Feminine Products would rather not purchase in public and have them delivered discreetly to your home. Art Gib is a freelance writer.

[tags]feminine products[/tags]

One of the most challenging aspects of selling a software company is coming up with a business valuation. Sometimes the valuations provided by the market (translation - a completed transaction) defy all logic. In other industry segments there are some pretty handy rules of thumb for valuation metrics. In one industry it may be 1 X Revenue, in another it could be 7.5 X EBITDA.

Since it is critical to our business to help our information technology clients maximize their business selling price, I have given this considerable thought. Why are some of these software company valuations so high? It is because of the profitability leverage of technology?

A simple example is what is Microsoft’s incremental cost to produce the next copy of Office Professional? It is probably $1.20 for three CD’s and 80 cents for packaging. Let’s say the license cost is $400. The gross margin is north of 99%. That does not happen in manufacturing or services or retail or most other industries.

One problem in selling a small technology company is that they do not have any of the brand name, distribution, or standards leverage that the big companies possess. So, on their own, they cannot create this profitability leverage. The acquiring company, however, does not want to compensate the small seller for the post acquisition results that are directly attributable to the buyer’s market presence. This is what we refer to as the valuation gap.

What we attempt to do is to help the buyer justify paying a much higher price than a pre-acquisition financial valuation of the target company. In other words, we want to get strategic value for our seller. Below are the factors that we use in our analysis:

1. Cost for the buyer to write the code internally - Many years ago, Barry Boehm, in his book, Software Engineering Economics, developed a constructive cost model for projecting the programming costs for writing computer code. He called it the COCOMO model. It was quite detailed and complex, but I have boiled it down and simplified it for our purposes.

We have the advantage of estimating the projects retrospectively because we already know the number of lines of code comprising our client’s products. In general terms he projected that it takes 3.6 person months to write one thousand SLOC (source lines of code). So if you looked at a senior software engineer at a $70,000 fully loaded compensation package writing a program with 15,000 SLOC, your calculation is as follows - 15 X 3.6 = 54 person months X $5,800 per month = $313,200 divided by 15,000 = $20.88/SLOC.

Before you guys with 1,000,000 million lines of code get too excited about your $20.88 million business value, there are several caveats. Unfortunately the market does not care and will not pay for what it cost you to develop your product.

Secondly, this information is designed to help us understand what it might cost the buyer to develop it internally so that he starts his own build versus buy analysis. Thirdly, we have to apply discounts to this analysis if the software is three generations old legacy code, for example. In that case, it is discounted by 90%. You are no longer a technology sale with high profitability leverage. They are essentially acquiring your customer base and the valuation will not be that exciting.

If, however, your application is a brand new application that has legs, start sizing your yacht. Examples of this might be a click fraud application, Pay Pal, or Internet Telephony. The second high value platform would be where your software technology “leap frogs” a popular legacy application.

An example of this is when we sold a company that had completely rewritten their legacy distribution management platform for a new vertical market in Microsoft’s latest platform. They leap frogged the dominant player in that space that was supporting multiple green screen solutions. Our client became a compelling strategic acquisition. Fast forward one year and I hear the acquirer is selling one of these $100,000 systems per week. Now that’s leverage!

2. Most acquirers could write the code themselves, but we suggest they analyze the cost of their time to market delay. Believe me, with first mover advantage from a competitor or, worse, customer defections, there is a very real cost of not having your product today.

We were able to convince one buyer that they would be able to justify our seller’s entire purchase price based on the number of client defections their acquisition would prevent. As it turned out, the buyer had a huge install base and through multiple prior acquisitions was maintaining six disparate software platforms to deliver essentially the same functionality.

This was very expensive to maintain and they passed those costs on to their disgruntled install base. The buyer had been promising upgrades for a few years, but nothing was delivered. Customers were beginning to sign on with their major competitor.

Our pitch to the buyer was to make this acquisition, demonstrate to your client base that you are really providing an upgrade path and give notice of support withdrawal for 4 or 5 of the other platforms. The acquisition was completed and, even though their customers that were contemplating leaving did not immediately upgrade, they did not defect either. Apparently the devil that you know is better than the devil you don’t in the world of information technology.

3. Another arrow in our valuation driving quiver for our sellers is we restate historical financials using the pricing power of the brand name acquirer. We had one client that was a small IT company that had developed a fine piece of software that compared favorably with a large, publicly traded company’s solution. Our product had the same functionality, ease of use, and open systems platform, but there was one very important difference.

The end-user customer’s perception of risk was far greater with the little IT company that could be “out of business tomorrow.” We were literally able to double the financial performance of our client on paper and present a compelling argument to the big company buyer that those economics would be immediately available to him post acquisition. It certainly was not GAP Accounting, but it was effective as a tool to drive transaction value.

4. Financials are important so we have to acknowledge this aspect of buyer valuation as well. We generally like to build in a baseline value (before we start adding the strategic value components) of 2 X contractually recurring revenue during the current year.

So, for example, if the company has monthly maintenance contracts of $100,000 times 12 months = $1.2 million X 2 = $2.4 million as a baseline company value component. Another component we add is for any contracts that extend beyond one year. We take an estimate of the gross margin produced in the firm contract years beyond year one and assign a 5 X multiple to that and discount it to present value.

Let’s use an example where they had 4 years remaining on a services contract and the last 3 years were $200,000 per year in revenue with approximately 50% gross margin. We would take the final tree years of $100,000 annual gross margin and present value it at a 5% discount rate resulting in $265,616. This would be added to the earlier 2 X recurring year 1 revenue from above. Again, this financial analysis is to establish a baseline, before we pile on the strategic value components.

5. We try to assign values for miscellaneous assets that the seller is providing to the buyer. Don’t overlook the strategic value of Blue Chip Accounts. Those accounts become a platform for the buyer’s entire product suite being sold post acquisition into an installed account. It is far easier to sell add-on applications and products into an existing account than it is to open up that new account. These strategic accounts can have huge value to a buyer.

6. Finally, we use a customer acquisition cost model to drive value in the eyes of a potential buyer. Let’s say that your sales person at 100% of Quota earns total salary and commissions of $125,000 and sells 5 net new accounts. That would mean that your base customer acquisition cost per account was $25,000. Add a 20% company overhead for the 85 accounts, for example, and the company value, using this methodology would be $2,550,000.

After reading this you may be saying to yourself, come on, this is a little far fetched. These components do have real value, but that value is open to a broad interpretation by the marketplace. We are attempting to assign metrics to a very subjective set of components. The buyers are smart, and experienced in the M&A process and quite frankly, they try to deflect these artistic approaches to driving up their financial outlay.

The best leverage point we have is that those buyers know that we are presenting the same analysis to their competitors and they don’t know which component or components of value that we have presented will resonate with their competition. In the final analysis, we are just trying to provide the buyers some reasonable explanation for their board of directors to justify paying 8 X revenues for an acquisition.

Dave Kauppi
is the editor of The Exit Strategist Newsletter, a Merger and Acquisition Advisor and Managing Director MidMarket Capital Advisors, LLC, representing owners in the sale of technology based businesses. We provide Wall Street style investment banking services to lower mid market companies at a size appropriate fee structure.

[tags]sell software company, merger acquisition software, investment banker software industry, valuation[/tags]