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Exit Planning Insights
Can you sell a distressed business?
April 22, 2020 / in Exit Planning, Sell a Business / by Adam Wiskind
We’ve been getting this question from more business owners over the last few weeks. As with many important questions, the answer is, “it depends”. Financial distress occurs when a firm can’t generate enough profit to meet its immediate or long-term financial obligations. If your business is consistently accumulating debt, has unseasonable and sustained increase to accounts payable, or is falling behind on payroll taxes, it is likely distressed. Buyer’s Perspective The potential to sell a …
M&A Advisor Tip: You are Not Stuck with Your Business
April 20, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
Worried about a recession? Burned out? No energy to do this all again? You are not stuck. Businesses sell in all market conditions, including in uncertain times like these. Yes, we’re coming off a period of peak demand in M&A. Buyers were lined up for quality opportunities. And they stretched their target parameters in order to find something that would fit. But many of those buyers are still active. There are buyers out there who …
COVID-19 Exit Planning Insight: Keep a Journal
April 13, 2020 / in Business Strategy, Exit Planning, News / by Al Statz
There’s no shortage of information out there right now on how company owners and CEO’s are responding to COVID-19. [By now, leaders have taken steps to survive and fight another day. Most now understand what business will look like for them until restrictions are lifted, and they’re formulating plans to thrive again post-pandemic.] With few companies going to market during this crisis, our insights will focus on exit planning, acquisition opportunities and non-elective sales for …
The Seven Stages of Selling Your Business
April 8, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
Smart preparation and planning can help you build a business that’s ready to sell when you are. Ideally, you’ll start preparing for sale early in your business life-cycle. The more you know about what buyers want, and what you can expect from the market, the more options you’ll have to exit your business and maximize value upon exit. Seven Steps in the M&A sale process: 1. Status and strategy: The first step is to check …
M&A Advisor Tip: Organize Your Financials
April 8, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
Buyers that pay top dollar usually expect to see clear, well-organized financial statements prepared according to generally accepted accounting principles (GAAP) and reviewed by a reputable CPA firm. If your business has more than $10 million in revenue, you should probably start investing in annual financial statement reviews at least three years prior to selling. Or, have a transaction-oriented CPA firm complete a “quality of earnings” report prior to going to market. For a referral …
M&A Advisor Tip: Know when it is time to sell.
March 20, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
When you no longer have the fight, get out of the ring. Burnout is the second leading reason business owners sell, after retirement. Many business owners hold on too long, long after their drive has gone. When that happens, the business stops growing or even starts going backward – and the value of the business declines. The best time to sell is when you’re energized and motivated by your work. If you see burnout on …
Selling Your Business to a Family Office
March 20, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
Business owners looking to sell their business, or attract an investment partner, may want to add family offices to their outreach strategy. These private family firms, established by high net worth families to manage their wealth, can offer unique advantages. While family offices aren’t new, they have become more active in M&A in the last decade. In the past, family offices may have looked to private equity firms as a resource to grow their wealth, …
The Four P’s of Selling a Business
March 4, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
Marketers sometimes talk about the four p’s (product, placement, price, promotion) of marketing. Known as the “marketing mix,” the emphasis a company puts in each area can have a direct impact on sales and profits. And while selling a business is not like selling a product, we can use this idea to think about how certain factors impact a company’s value and sale readiness. The right mix will make your company more desirable to buyers …
M&A Advisor Tip: Drive Cash to the Bottom Line
March 4, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
We all like to save money on our taxes. But hiding personal expenses in your tax return can do more harm than good. Most businesses are purchased as a multiple of cash flow (roughly EBITDA less capital expenditure needs, less increases in working capital as the company grows). If buyers and lenders can’t find your personal expenses in the financials or if the adjustments are so severe they border on tax evasion, they’ll be suspicious …
M&A Advisor Tip: When the Kids Don’t Want the Business
February 19, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
Many business owners are surprised to find out their kids don’t want to take over. Maybe the kids never wanted it. Or maybe they changed their mind after working in the business for a while. Either way, some business owners get caught having to make quick decisions about transferring their company to a third party. Our advice: Talk to an M&A advisor, EVEN IF you plan to sell to your kids. It can take years …
Exit Strategies Group, Inc. is a leading provider of business sales and acquisitions, business valuations, and exit planning services for family owned and closely-held companies since 2002.
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