Business Consulting
M.W. ARAGAO (MWA®) provides a wide array of consulting services for small and medium sized businesses throughout all periods of the business’s life cycle. Whether assisting in the creation of the business, the sale or transfer of the business or anything else in between, MWA can help to ensure each activity is performed at maximum efficiency.
Below are some of the more common services provided by MWA:
- Accounting/Bookkeeping/Payroll Services
- Business Planning Services
- Entity Formation and Organization
- Business Sales
- Business Valuations
- Capital Advisory
Accounting/Bookkeeping/Payroll Services
MWA provides for your accounting/bookkeeping needs utilizing the following systems:
- Quicken
- Microsoft Money
- QuickBooks
- Peachtree
If you prefer to keep your accounting in-house, MWA provides expert training on these systems so that you and/or your staff feel comfortable and confident using them.
MWA assists with all aspects of accounting software set-up, training, and support. We can review, adjust, and update your accounting periodically or we can maintain your accounting software on full service basis. Our services include:
- Pay bills and manage accounts payable
- Handle all payroll functions, including quarterly and annual payroll tax reports
- Invoice customers, post collections, aging accounts receivables
- Bank reconciliations and providing cash balance reports
- Maintain sales journals and general ledgers
- Provide balance sheets, income statements, and other financial statements;
- Prepare all required business tax reports and filings
- Prepare customized reports thelp you run your business more successfully
Beyond training and outsourcing, in certain circumstances, our firm can serve as the Chief Financial Officer of the business in order to oversee and manage the accounting, bookkeeping, and finances of the business.
Finding the right accounting system for your business and using it correctly is critical to successfully managing your finances. It can assist in securing credit/financing, serve as a good measure to self-audit, and provide important data to assist you in making important business decisions.
MWA both provides consultation and review of or generates business strategies and business plans. A key element in business consulting is assisting with tasks such as formulating workable business strategies and crafting effective business plans. Both are critical to maintaining a goal oriented approach to managing a business. The latter is typically critical for newer businesses looking to acquire financing. Our firm believes that having and adhering to a business plan, with solid goals and objectives, can only enhance its performance and secure its longevity.
Entity Formation and Organization
MWA provides a wide spectrum of entity formation and organization services to businesses and their owners, from incorporation and tax compliance to complex business agreements such as mergers and acquisitions.
Our services include:
- Entity Formation and Organization for the following:
- Corporations (Subchapter S and C)
- Limited Liability Companies (LLCs)
- Family Limited Partnerships (FLPs)
- Nonprofit Corporations
- Partnerships (Limited and General)
- Entity Services for the following:
- Trade Name and Trade/Service Mark Registration
- Foreign Corporation/LLC Registration
- Shareholder/Director Minutes & Resolutions (for corporations)
- Member/Manger Minutes and Resolutions (for LLCs)
- Business Contracts and Agreements:
- Shareholder, Employment and Independent Contractor Agreements
- Merger, Sale & Acquisition Agreements
- Buy-Sell, Lease and Distributorships
- Employee Benefit Plans
- Option Agreements
- Purchase and Licensing Agreements
MWA provides services in business sales in the following area:
- Business Brokerage
- Mergers and Acquisitions
- Business Valuations
- Franchise Marketing and Sales
- Business Financing
- Exit Planning
MWA provides business valuations for the purpose of:
- Mergers and acquisitions
- Entering/departing owners
- Estate valuations
- Divorce proceedings
- Utilization of pre-acquisition Net Operating Losses
Business valuations, for tax purposes, are guided by the Internal Revenue Service Revenue Ruling 59-60, which establishes the general factors that must be considered when valuing a business. The eight factors, although not inclusive, are fundamental and will be considered when and if relevant:
- The nature of the business and the history of the enterprise from its inception
- The economic outlook, in general, and the condition and outlook of the specific industry in particular
- The book value of the stock and financial condition of the business;
- The earning capacity of the company
- The dividend paying capacity of the company
- Whether or not the enterprise has goodwill or other intangible value(s)
- Sales of the stock and the size of the block of stock to be valued
- The market price of stocks of corporations engaged in the same or similar line of business having their stocks actively traded in a free and open market, either on an exchange or over the counter
When valuating a business, there are three generally accepted valuation approaches: (1) the Market Approach; (2) the Income Approach; and (3) the Asset Based Approach.
- The Market Approach
The Market Approach arrives at a value by comparing the market price of stocks of companies engaged in the same or related activities, where such stocks are traded on an exchange or over the counter. The acquisition prices of entire companies, engaged in related activities, where such prices are readily, publicly available or where such data is otherwise obtainable is also considered. The market data is then adjusted for any significant differences, to the extent known, between the closely held company and the publicly traded companies. A valuation multiple is then derived and applied to the closely held company’s financial data.
- The Income Approach
The Income Approach measures the value of a business based on what the representative, ongoing net earnings or cash flows are expected to be. This approach assumes that the income earned will, to a large extent, determine its value. Past and present performance is relevant only to the extent that they provide a basis for representative net earnings or cash flows. The estimate of value is computed by determining the amount of representative net earnings or cash flows to be generated by the business, and then dividing by an appropriate capitalization rate, or rate of return, which measures the company’s financial and business risks. A company’s value has a close relation to future expectancy. As a result, considering recent events in the company’s history should be of greatest help in predicting the future.
- The Asset Based Approach
The Asset Based Approach, sometimes called The Cost Approach, is based on the economic principle of substitution which states that an informed purchaser would pay no more for an asset than the cost of building a similar asset with the same utility. Each component of a business is valued separately, and then summed up to derive the total value of the company. The appraisal value is determined by estimating the cost of reproducing or replacing each individual asset of the business property being appraised. The Asset Based Approach usually cannot be used alone, because going concern businesses also have intangible value, which is not considered in this approach.
One of the most critical factors in formulating, creating, and maintaining a business is the use of its capital. MWA advises businesses in using their capital in the most efficient manner by helping it achieve its optimal cost of capital. The services include:
- Advising on debt financing, both short and long-term; i.e., preparing loan documentation, structuring loans, issuing bonds and notes, etc
- Advising on equity financing; i.e., issuance of company stock/ownership
- Cash flow management
For business consulting services please e-mail us at: info@mwaragao.com.