Ending The Venture Sesi 11 J0692 - Entrepreneurship

Agenda Management of Succession Other Exit Barrier J0692 - Entrepreneurship

Bankruptcy’s Lessons Overextension To Markets Protects From Creditors Not Competitors Entrepreneur = Business Recognize Failure Too Late Emotionally Painful J0692 - Entrepreneurship

Reorganization Least Severe Alternative- “Breathing Room” Cash Flow Problems Can Be Overcome Plan Prepared & Approved By Court Extension- Postpone Claims Substitution- Exchange Something For Debt Composition- Prorated Settlement J0692 - Entrepreneurship

Bankruptcy Survival Bargaining Chip- Restructure And Reorganize File Before Failure Of Cash Or Revenue Chapter 11- Only If Chance Of Recovery Examination Of Transactions For Fraud Maintain Good Records Understand Completely Transfer Litigation To Bankruptcy Court Realistic Reorganization Plan J0692 - Entrepreneurship

Extended Payment Budgets Future Income To Outstanding Debt Payment Of All Priority Claims J0692 - Entrepreneurship

Priorities Secured Creditors Administrative Expense Claims From Operations Wage Claims Contributions To Benefit Plans Claims Of Consumer Creditors Taxes General Creditors J0692 - Entrepreneurship

Liquidation Voluntary vs. Involuntary Involuntary Requirements Debts Not Being Paid When Due (1 – 3 Creditors) Custodian Appointed Fair Value Of Assets < Debts (Balance Sheet Test) J0692 - Entrepreneurship

Bankruptcy Trustee Elected By Creditors- Interim Appointed By Court Becomes Owner Of All Nonexempt Property Can Set Aside Petitions Transfers Property To Creditor J0692 - Entrepreneurship

Strategy During Reorganization Prepare Plan Sell Plan Communicate No Checks That Can’t Be Covered J0692 - Entrepreneurship

Reducing Risk Of Failure Avoid Excess Optimism Prepare Good Marketing Plan Make Good Cash Projections Keep Abreast Of Market Identify Business Stress Points J0692 - Entrepreneurship

Bankruptcy Warning Signs Financial Management Lax Inability To Document/Explain Transactions Large Discounts To Speed Up Cash Flow Contracts Below Standard Amounts Bank Wants Subordination Key Personnel Leave Lack Of Materials Unpaid Taxes Demand For Cash Payment Customer Complaints Increase J0692 - Entrepreneurship

Failure Reality Consult with Family/Friends Seek Outside Assistance Drop Venture That Is Draining Resources J0692 - Entrepreneurship

Succession Planning Issues Senior Management Committed To Plan Well-Defined Job Descriptions Open Process J0692 - Entrepreneurship

Harvesting Direct Sale Employee Stock Option 2-3 Year Plan to Sell To Employees Create Trust Fund Management Buy-Out- Based On Value Of Goodwill & Asset Appraisal J0692 - Entrepreneurship