Exit Strategy News & Insights

Insights, knowledge base and announcements for business owners and professional advisors

Increase Business Value with Recurring Revenue

March 23, 2017 / in Exit Planning, Sell a Business / by Exit Strategies

Businesses with a higher percentage of recurring revenue generally sell for higher prices. Recurring revenue business models are highly sought after by strategic and private equity buyers because they are perceived as less risky. Future revenue is more predictable and requires less ongoing sales effort and reinvestment. Companies like Salesforce.com pioneered recurring revenue in the software world, creating the Software as a Service (or SaaS) model. SaaS turned the traditional software licensing model on its …

Do Your Business Emails Convey Professionalism?

March 16, 2017 / in Business Strategy / by Jim Leonhard

Normally we blog about M&A or Business Valuation issues, but this week I want to address email effectiveness, a subject important to all business people considering the tsunami of email messages most of us receive each day (an estimated 121). I recently read an article from the Harvard Business Review that succinctly focused on important do’s and don’ts regarding business emails, including: Do keep emails brief, clear and to the point to capture attention and interest …

Case Study: How One Entrepreneur’s Advisors Enabled a Successful Estate Transfer

March 1, 2017 / in Business Valuation, Exit Planning / by Bob Altieri

I recently had a client who wanted to transfer his medical distribution company to his son and retire with peace of mind — a common occurrence these days. Dad and his CPA requested an opinion of Fair Market Value to set the price for a transfer of stock. After I appraised the company (S corp.) stock at $2.0 million, Dad and Son asked me how to finance the transaction. Dad was reluctant to carry a long-term loan for …

Twenty Reasons to Know the Value of Your Company

February 22, 2017 / in Business Valuation / by Al Statz

Private company owners and shareholders seek independent business valuations at various times for various reasons. Here are twenty situations in which you may want to obtain a business valuation: An owner has passed away and a valuation is required to settle the estate per IRS regulations An owner is getting divorced and needs to have the company or their fractional interest valued to settle the marital estate An owner wants to gift shares to his …

Employ a Recurring Revenue Model to Increase the Value of Your Business

February 15, 2017 / in Exit Planning / by Adam Wiskind

Businesses with recurring revenue are generally more attractive and more valuable to buyers. Recurring revenue, simply stated, is the portion of a company’s revenue that is highly likely to continue in the future. An effective recurring revenue model creates a “stickier” relationship between the provider of a product or service and the consumer. Those businesses don’t have to spend as much time and money acquiring new customers. Effective recurring revenue business models: Consumable -The original recurring revenue …

Economic indicators help put the current U.S. economic climate in perspective.

January 25, 2017 / in Business Strategy, News / by Louis Cionci

I have four common gauges of U.S. economic activity that deserve a few moments of your attention today: stock market, interest rates, inflation and unemployment. Let’s look at graphs of each of these measures for a visual perspective on the state of our economy. Stock Market. The Wall Street Journal, Equities pg. B17, January 25, 2017 reported the DJIA rose 100 points amid expectations of increased government spending on infrastructure projects. The DJIA crossed the 20,000 mark …

Exit Strategies Grows Up!

January 16, 2017 / in News / by Al Statz

Time flies when you’re having fun selling and appraising businesses. 2017 marks our 15th anniversary. I founded the firm in January 2002, in the wake of 9/11, coming off a 15-year management career in the industrial automation technology industry. Relying on my corporate merger and acquisition experience, financial training, and a passion for strategic deal-making; the founding was a classic case of spotting an under-served market and filling the needs in a better way. In the early years, we were primarily …

Early-Stage Tech Company Exits

January 11, 2017 / in Exit Planning, Sell a Business / by Exit Strategies

You’ve built a world-class software solution, delivered to customers as a SaaS application or web service. You’ve recruited a team and created intellectual property. Customer retention is strong and the buzz is growing in your vertical market. Each new customer acquisition represents incremental recurring revenue that falls directly to your bottom line – and the company is closing in on cash flow positive territory. Could this be the right time to sell the company? You may be thinking, I’ve barely …

U.S. Manufacturing Gears Up

January 4, 2017 / in News / by Al Statz

Here is some good news to start your year. The Institute for Supply Management announced yesterday that its PMI national manufacturing index came in at 54.7 for December 2016, which is up from 53.2 in November and is the highest monthly reading of 2016. (Any reading over 50 signals growth.) This latest Manufacturing ISM® Report On Business® shows new orders, production and employment growing, inventories contracting, and supplier deliveries slowing. The PMI is based on data compiled from …

Ten Exit Planning Benefits

December 28, 2016 / in Exit Planning / by Al Statz

Someone’s sitting in the shade today because someone planted a tree a long time ago. — Warren Buffett Few would argue that a successful retirement takes more planning for a business owner than it does for other people. Whether you intend to transfer your business to family, management or a third party, an exit plan is usually intended to produce a more successful exit and retirement. Here at Exit Strategies, an “Exit Plan” (or succession plan) …