MAY 3, 2018   |   VIEW AS WEBPAGE
Presented by Jaguar Des Moines
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James Nalley and Tom Cavanagh, vice presidents at BCC Advisers in Des Moines.

What’s a Fair Price for Your Company?

A quick glance through businesses for sale in Iowa shows scores available, ranging from a plumbing contractor to a motor sports company to several manufacturers (and many restaurants). You may be interested. But they’re asking as much as $15 million, raising the question: Are they worth it?

Selling or buying a company may not be so hard. It likely will be more difficult to settle on a price. Yes, there is a formula, which looks to be pretty basic: Value = income over risk-growth. But how do you place a value on risk? How do you value growth?

For help in these matters we turned to James Nalley and Tom Cavanagh, vice presidents at BCC Advisers in Des Moines. Their firm specializes in arranging business acquisitions and determining the value so that you can maximize your profits as a seller, or minimize your expense as a buyer.

There are three basic approaches to valuing a company, said Nalley:
  • Asset-based. This looks at the assets of a business, minus liabilities. This works best for businesses that are capital or tangible asset intensive. It can be used for real estate holding companies and industries such as farming.
  • Income. Best used for operating companies, this looks at the capacity of the business to generate cash flow. You want to be able to determine what will happen in the future, and apply it to the past.
  • Market. This approach considers methods that use the relationship between stock prices of public companies and their earnings and book value.

There are countless variables to consider, such as the overall health of the industry being considered, skills of staffers, modernity of equipment used, etc. Luckily, there are guidelines that come from reams of research that companies compile on business transactions, and Nalley goes through them to look for help. A metals fabricator, for instance, in general will have to pay so much for his stock, and can sell it to only so many clients. But does he have a delivery advantage, or new processing equipment (or outdated), or good workers with high productivity? Does technological innovation play a role for better or worse? Are their key employees whose skills will be missed, or needed?

It gets complicated. But it’s worth the effort, as Nalley said he recently worked with one client who missed a technology change that made his business worth much more than the asking price.
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Legacy Bridge

Classes Help You Navigate Social Security, Medicare

You’re going to retire. Or at least turn 65.

A lot about your financial life changes at those moments, what with Social Security and Medicare likely kicking in. Even if you have a trusted financial adviser, some independent schooling will better inform you about the many options available on Social Security and on Medicare, especially its Part D and Part F benefits components.

Just in time, Des Moines Public Schools offers classes in deciphering Medicare (6 p.m. to 8 p.m. on June 4) and Social Security (6 p.m. to 7:30 p.m. on June 6). To register for the classes, both of which will be held at Roosevelt High School, check the school district’s website,, or call 242-8521.

The state of Iowa likewise offers independent guidance on Medicare. (Pay attention to Part D, the pharmacy benefit, which is difficult to comprehend and easy to make a mistake on. Part F, which handles supplemental coverage, is not easy, either.) There are classes nearly weekly somewhere in Iowa, run by trained volunteers with the Senior Health Insurance Information Program (SHIIP). Call 800-351-4664, or go to If you’d like, you can arrange an individual consultation with a SHIIP counselor.

Once you take your first Social Security payment, you’re locked into that option. And Medicare decisions can be hard to change (you might have to qualify after the first year, should you wish to change). So these are important decisions.
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Denton Homes
801 Chophouse

Changing Attitudes About Money Will Shape the Future of Cash

When I was growing up, a child of the 80s, people who paid with plastic seemed to be in a higher echelon. Credit equaled status. > FULL ARTICLE

dsmWealth's Picks on What You Need to Know

  • The Department of Labor missed the deadline to file for a rehearing in the Fifth Circuit Court of Appeals, meaning the court's decision to vacate the fiduciary rule stands. Meaning the DOL rule is on step closer to death. For the full article by Diana Britton, click here.

  • This corporate donor is on the hook for a $4 million pledge. Prior to May 29, 2015, Foremost Industries signed a gift agreement promising to pay Appalachian Bible College the sum of $4 million in five equal annual installments. The gift agreement was binding on Foremost and its successors and assigns. The gift agreement stated that in executing the gift agreement, ABC was "relying … to its detriment" on satisfaction of the pledge in full and that the pledge would be used as "an inducement for other donors to make contributions and gifts to ABC for its charitable purposes." Subsequently, the board of directors of Foremost ratified the gift agreement and, on the same date, GLD Foremost Holdings agreed to purchase from the owner of Foremost all of its issued and outstanding shares. After the purchase was complete, GLD ratified the gift agreement. Foremost never made any payments under the gift agreement and later stated that it wouldn’t be making any payments. ABC filed a complaint in federal district court for breach of contract, anticipatory breach of contract and unjust enrichment. See the court ruling.

  • Many clients believe that taking Social Security as early as possible is the right choice. But advisors can help optimize their strategy and increase their retirement value by thousands of dollars, even up to $100,000 or more. The reports of the death of Social Security planning have been greatly exaggerated. When lawmakers passed the Bipartisan Budget Act of 2015, predictions circulated that the practice of helping clients maximize their Social Security benefits would wither and possibly even die. But optimizing Social Security benefit withdraws is still a relevant way to add to the bottom line of your clients’ retirement strategy. Here’s why.


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