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Exit Planning Insights
When selling your business is your succession plan
December 22, 2021 / in Exit Planning, Sell a Business / by Al Statz
How old are your key employees? This is becoming one of the key issues buyers care about when acquiring a business. It’s not a case of agism – buyers would love for your senior employees to stay. It’s about risk and how soon the business’s pivotal people are going to retire. Right now, 10,000 Baby Boomers turn 65 each day. In 2020, 3.2 million Boomers left the workforce, and this trend is likely to continue. …
M&A Advisor Tip: The Case of the Missing Successor
December 22, 2021 / in Exit Planning, Sell a Business / by Al Statz
Businesses are facing talent shortages at all levels – at the front lines and in the C-suite. In some industries, like construction, talent issues can complicate exit plans. At some point, there may not be enough leaders left to take over for all the owners who want to exit. Now more than ever, succession planning can protect your business value. Buyers are looking for companies with a strong management team ready to lead. If you’re …
How 100 minus 90 equals 20
December 7, 2021 / in Exit Planning, Sell a Business / by Al Statz
Here’s a story of how 100 – 90 = 20. We recently represented some owners who had lots of options when it came to selling their business. They had a high demand manufacturing operation, and buyers wanted in – offering everything from minority or majority investments to full exit options. At first, the sellers thought they wanted a full exit, all cash at close. If they were going to give up control, they figured it …
M&A Advisor Tip: Make contracts assignable
December 7, 2021 / in Exit Planning, Sell a Business / by Al Statz
One key factor that significantly impacts the value of any contract is whether it’s assignable. Don’t put yourself in a position of negotiating assignability at time of sale. It eliminates confidentiality and opens the door for customers to highjack your deal. Knowing your company is for sale—and that the sale is dependent on their contract—shrewd customers will ask for lower prices or more favorable terms, knowing you’ll likely agree to anything reasonable. You and your …
Entrepreneurs really do think of business as their baby
November 23, 2021 / in Exit Planning, Sell a Business / by Al Statz
Many business owners say selling their business feels like giving a child up for adoption. As it turns out, that’s not just a metaphor. Research shows entrepreneurs really do think of their business as a kid. Researchers found parallel brain activity between owners thinking about their business and parents thinking about their kids. In either case, similar areas of the brain lit up, including areas associated with parenting, pleasant sensations, and rewards. Researchers say the …
Buyer’s top focus is employee team
November 2, 2021 / in Business Strategy, Exit Planning, Sell a Business / by Al Statz
Employees. Finding them. Keeping them. It’s on everyone’s mind right now. And for the company or person who buys your business, it just may be their number one concern. In the latest IBBA and M&A Source Market Pulse Report, a quarterly survey of M&A advisors, respondents indicated that employees were buyers number one due diligence concern so far this year. Employee issues, specifically longevity, loyalty and work ethic, ranked ahead of other due diligence priorities …
M&A Advisor Tip: Buy your buddy a beer, not experience
November 2, 2021 / in Exit Planning, Sell a Business / by Al Statz
I’m all for friendships, but I wouldn’t risk my financial future on one. Unfortunately, many business owners do just that. If you’re like me, many of your professional advisors have become your friends, and you want to honor those relationships. But M&A is a specialist’s world. If you engage your usual advisor (e.g., attorney) to conduct a business sale and they are not a specialist in M&A transactions, you could be risking everything you worked so hard for. Think of this as brain surgery. You wouldn’t use your general doctor who has done …
Employee Retention Raises Business Value, Especially Now
October 26, 2021 / in Exit Planning, Sell a Business / by Al Statz
“To win in the marketplace, you must first win in the workplace.” Those words of Doug Conant, business leader and former CEO of Campbell Soup Company, ring particularly true today. The talent market was tight before the pandemic, but now we’re in a critical state. Finding employees, and keeping them, is a challenge for everyone. And if you’re selling your business, it just might be the buyer’s number one concern. In the latest IBBA and …
Management Buyouts are a great option, but consider the risks
October 12, 2021 / in Exit Planning, Sell a Business / by Adam Wiskind
One of the more attractive exit options for you as a business owner is a management buyout (MBO). That is when your management team works together to buy either a total or a majority stake in your company, thus taking control of the company themselves. There are several benefits to selling your company to your management team: You can reward loyal managers with an opportunity to gain equity in the company. Managers are more likely …
The happiest business owners know what’s next
October 8, 2021 / in Exit Planning, Sell a Business / by Al Statz
I had the privilege of chatting with Bo Burlingham, former executive editor for Inc. magazine and author of several books, including Finish Big: How Great Entrepreneurs Exit Their Companies on Top. We talked about one of the key discoveries that led to the book, namely that so many business owners were unhappy after selling their companies. It didn’t really matter how much someone got for their business – some sellers were delighted while others were …
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