Keeping Good Records – An Often Overlooked Element of the Business Exit Plan

With all of the long nights and frantic days that can come with starting and running a business, the practice of keeping paperwork neatly organized can easily fall to the bottom of a to-do list. It is certainly understandable that you might consider time spent networking with potential customers and funding sources to be far more important than making sure your company’s contracts are organized in a logical order; however, having a good handle on your paperwork can be more important than you may think.

If you suddenly find yourself awash with customer demand, you may also soon find yourself across the table from a sophisticated investor that is offering either to invest a large sum of money or, hopefully, to acquire your business for an even more tidy sum. That investor is going to want to conduct its due diligence on your business to ensure it is worth the money. The diligence process can be lengthy and expensive for both the investor and you.

Tom Hanks, The Making of Another Major Motion Picture Masterpiece (Albert A. Knopf, 2023)

Until I read this book, while I’m a fan of movies, I hadn’t thought about the movie business much. On a regular basis, new movies appear fully formed and ready for consumption at our local theater or through our favorite streaming service. Two hours (give or take) of entertainment emerge from a black box called the “industry” in, for better or worse, final form. I’d heard the dark allusions to funky accounting relating to measuring the profitability of the product, but had no real idea as to how it is manufactured.

Turns out that each film is the product of entrepreneurism on steroids. Conceiving the idea for the story, evaluating the market for the product, arranging financing, and assembling a team to realize the filmmaker’s vision are steps any entrepreneur will readily recognize and can likely translate to their own business opportunities.

Woodstock for Capitalists

Each May, thousands of people flock to Omaha for this event, more prosaically known as the Berkshire Hathaway annual shareholders meeting. All it takes to attend the party is to be considered a stockholder. A share of the company’s Class A shares (currently trading at about $525,000) might be a little bit beyond the reach of many, but a share of its Class B stock (about $350) will also do the trick.

The event is a true spectacle, offering a 5K run, comedy skits, disco balls, music, celebrities, and even visits by characters from the Berkshire Hathaway portfolio of companies (such as the GEICO gecko).