• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Sozo Fire

A Hot Spot of Knowledge

  • Home
  • Topics
    • Business
    • Construction
    • Family
    • Health
    • Swimming Pools
    • Technology
  • Ask a Question
  • Contact Us

The Ins And Outs Of Recapitalization

October 26, 2011 By Sozo Staff Leave a Comment

To be honest, any business in this economy could use a cash infusion. Growing an underperforming business is a good step towards a sale or merger. The ever-increasing solution appears to be recapitalization. This process helps to finance expansion and insure a positive business sale.

How Recapitalization Works

Being a business owner often means personal financial ties to the business. This connection makes accessing additional capital difficult regardless the reasons. Getting to that money traditionally meant selling the business for a lump cash sum. Using a quick sale to gain capital will garner less cash then a well thought out recapitalization. Selling an interest in a company or partial sale of that company is the process of recapitalization. An outside investor will allow the business owner to pull capital from the company in a non-detrimental way while still maintaining ownership of the business. This control and gain is what makes recapitalization such an excellent choice.

Shared Responsibilities

Increasing the flexibility of your business and spreading out risk are just two benefits to recapitalization. The outside investor now present in your company will share decisions and responsibilities of the business. While they may not be present on a day-to-day basis, their background presence will allow the business owner more freedom. Not to mention the extra revenue from the recapitalization can be used in several ways. Perhaps a business owner needs to pay some personal debt or diversify retirement options. Regardless the reason behind recapitalization, this process allows business owners to retain stakes in the business while achieving personal goals as well.

Display True Potential

While a business owner is looking to recapitalize, sell or merge they should never neglect the display of potential. A booming business must not rely on the current bottom line alone, what is the future of the business? Likewise, a struggling business can display the true value of its assets, which may be greater, then the bottom line. Securing the highest value in a recapitalization rests in the display of potential. An investor must be confident that the business is worth the time and money they have. Will that time and money increase the business’ value or squander it? Performing and accurate company valuation is important before considering the next move. When recapitalization is decided upon, the next imperative idea is clarity. Make sure each term of the deal clearly states the terms and that everyone involved is comfortable. A successful recapitalization will provide the business owner with the financial reward desired and an enthusiastic investor. Together they will lead the business into a profitable future.

Need help brokering a recapitalization or sale of your transportation business? Call the Tenney Group. They have industry experts standing by to give you a free initial consultation: 817-274-0054

Filed Under: Business, Financial, Transportation

Additional Articles

Selling a Business: How to Package Your Business for Sale
Is Your Business Ready to Grow?
boys playing with construction toys in childcare
Teach Your Daycare Kids to Care About Sharing

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

1 × 4 =



Primary Sidebar

Lyon Financial

Popular Posts

  • Berg Furniture Children’s Furniture Lines: Options and Space Savings, Galore
  • Dream Furniture for Your Child, Part 2
  • Tropical Decking and Ipe Alternatives
  • Dream Furniture for Your Child, Part 1
  • Benefits of Going on a Mission Trip
  • Why Walnut Gets Special Treatment, Part 2
  • Business Flash Drives
  • Septic System Pumping in the Charlotte, NC Area
  • Custom Wire Oven Racks by Three M Tool for Bakeries
X10 Home Automation

Recent Posts

  • Setting Up Your X10 System: Beginner’s Guide to Home Automation
  • Options for Home Automation: What Makes X10 Different?
  • Benefits of Aquatic Exercises, Part 2
  • Benefits of Aquatic Exercises, Part 1
  • Black Algae in Your Pool? Here’s What to Do, Part 2
  • Black Algae in Your Pool? Here’s What to Do, Part 1
  • How the X10 HUB Advances Already Incredible Technology
  • What Makes X10 Home Security Systems Unique
  • Should You Think About a Pool & Hot Tub Combination?
  • Drowning Prevention in Swimming Pools
Lyon Financial

Recent Comments

  • Alice Carroll on Pool Choices: Pool Fences
  • Zachary Tomlinson on Swimming Pool Cover Advantages
  • Hannah on X10 GSM Home Security Systems
  • Michael Cobb on X10 GSM Home Security Systems

Copyright © 2023 Sozo Firm Inc · Privacy Policy · Disclaimer · Sitemap