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Distributor's Link Magazine Summer 2022 / Vol 45 No 4

66 THE DISTRIBUTOR’S

66 THE DISTRIBUTOR’S LINK Roman Basi Roman Basi is the President of The Center for Financial, Legal & Tax Planning, Inc. Roman graduated from Milliken University obtaining a Bachelor’s of Science Degree with a minor in Psychology. He earned an MBA from Southern Illinois University with an emphasis in Accounting and recevied his JD degree from Southern Illinois University. Roman is a licensed CPA as well as being a licensed attorney in Illinois, Missouri and Florida and is in high demand for his expertise in financial, legal and tax matters. His areas of expertise include mergers and acquisitions, contracts, real estate law, tax and estate planning. Visit www.taxplanning.com or call The Center at 618-997-3436. BUSINESS VALUATIONS Running your own business requires you to invest your life, money, time, and effort. Countless hours have been spent operating, maintaining, and adjusting the business to stay competitive, profitable, and valuable. After all your hard work, you may ask yourself, how much is my business actually worth? While most business owners could claim a value based on their income and assets, it is important to sit down and have an independent business valuation. Knowing the value of your business is necessary for a plethora of reasons. In this article, we will break down those very reasons, such as the benefits of knowing your business’s true value, how the true value is established, along with the importance of substantiating, defending, and explaining the said value to those in question. When it comes to buying or selling your business (M&A), business succession planning, estate planning, employee stock options (ESOP), business loans, or even divorce, a proper valuation is vital regarding proper planning, execution, and structure of the transaction. Along with this, a business valuation is more than just a number arrived at through various methods used to calculate value. The value number arrived at is, in most cases, of secondary value to the actual methodology used in the calculation. For example, two shareholders enter into a Buy/Sell Agreement (an agreement necessary for all businesses with two or more shareholders) and a shareholder looks to exit the business or passes CONTRIBUTOR ARTICLE away unexpectedly. What is the value of the business is the shareholder or the shareholder’s estate owed? How are we able to calculate a number that is sure to be ever-changing as business value increases or decreases based on a weekly, monthly, and yearly basis. The answer is the valuation methodology proposed and agreed upon by the shareholders in the executed Buy/ Sell Agreement. This Buy/Sell Agreement can provide a valuation methodology that can be calculated upon the time of the shareholder’s exit. This can avoid a battle of various methodologies leading to different values more beneficial to one party over the other. How are we sure we selected the right methodology to arrive at true value. The true value of your business will reflect the value a willing buyer would agree to pay in an arm’s length transaction. Or, as the IRS states “true value is the fair market value or the price at which the property would change hands between a willing buyer and a willing seller, when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, with both parties having reasonable knowledge of the relevant facts.” Rev. Rul. 59-60. The key to a credible valuation is to obtain and substantiate the value at which the asset or stock will change hands between a willing buyer and seller. In order to do this properly, the business needs to employ an unbiased, qualified appraiser with experience and training in both the area of valuations and the industry in question. CONTINNUED ON PAGE 164

THE DISTRIBUTOR’S LINK 67 Auto Bolt is a proud American, privately owned, domestic Bolt manufacturer located in Cleveland, Ohio. For the past 75 years, Auto Bolt has experienced continual growth and expansion based on our solid reputation, strong relationships, and by following our “core values”. We have built our reputation on meeting customers’ quality requirements and delivering parts as promised. Our complete in-house engineering and tooling teams assist customers from start to finish with both current and new product designs. We specialize in low to high volume specialty parts per print and commercial products for many industries such as: Automotive, Truck and Trailer, Heavy Construction, Agricultural, Solar, and Military. We work closely with our partners in the industry to offer their customers fastener solutions with the best quality products and on-time delivery. Auto Bolt production sizes range from 5/16 “(M8) to 1-1/8” (M27). Our product line consists of Hex Flange Bolts, Hex Cap Screws, Shoulder and Place Bolts, Wheel Bolts, Carriage Bolts, Plow Bolts, 12-Point Bolts, Tank Bolts, Pins, Double End Collar Bolts, Spring Bolts and many Specials Per Print. Auto Bolt production sizes range from 5/16 “(M8) to 1-1/8” (M27). Our product line consists of Hex Flange Bolts, Hex Cap Screws, Shoulder and Place Bolts, Wheel Bolts, Carriage Bolts, Plow Bolts, 12-Point Bolts, Tank Bolts, Pins, Double End Collar Bolts, Spring Bolts and many Specials Per Print. We also offer secondary processes including Drilling and Grinding, Heat Treatment, Plating, Passivation, Patching and Sorting. Available carbon steel includes SAE 1008, 1010, 1018, 1038, 1541 and 10B21 plus alloy grades SAE 1335, 1541, 4037, 4140, 5140, 8620, 8637 and 8740. Additional Stainless-Steel options available. It’s a good time to be a domestic supplier and a great opportunity to partner with Auto Bolt! For additional information, please contact Auto Bolt at 1-216-881- 3913, email quotes@autoboltusa. com, or visit them online at www.autoboltusa.com.

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