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Exit Planning Insights
Twenty Reasons to Know the Value of Your Company
February 22, 2017 / in Business Valuation, Buy-Sell Agreements, Exit Planning / 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 …
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 …
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) …
Exit Strategies Sells Aldetec, Inc. to Private Equity Backed Strategic Buyer
December 10, 2016 / in Exit Planning, News / by Jim Leonhard
Sacramento, California – Exit Strategies is pleased to announce the acquisition of microwave electronics manufacturer Aldetec, Inc. by U.S. Technologies, a portfolio company of Cornerstone Capital Holdings. Sold To: Aldetec, Inc. designs and manufactures integrated microwave assemblies and RF amplifiers for the commercial, military and space flight industry sectors. US Technologies (UST), of Fair Lawn, New Jersey, provides quality electronics design, manufacturing, engineering, testing, repair and refurbishment services, from complete finished units down to the …
Don’t Forget the Net Investment Income Tax when Selling a Business
November 30, 2016 / in Exit Planning, Sell a Business / by Al Statz
The Net Investment Income Tax, which our friends at the IRS put into effect in 2013, takes an extra toll on business owners who sell their businesses; and for that matter, on most higher income taxpayers and any moderate income taxpayer whose income increases suddenly in a given tax year. What is the Net Investment Income Tax? The Net Investment Income Tax (“NIIT”) is a 3.8 percent federal tax on certain income of individuals, estates …
Selling an Ecommerce Business in the Lower Middle Market
October 10, 2016 / in Exit Planning, Sell a Business / by Exit Strategies
With continuing growth in consumer online spending and many high-profile public acquisitions this year, it seems like a great time to sell your online retail business. But things are never quite as simple as they appear. Over the past few months, several impressive acquisitions have been announced in the public markets. Walmart has purchased Jet.com at a jaw dropping $3.3 billion; a move that is presumably Walmart’s effort to narrow Amazon’s ever-increasing dominance. Consumer brands company, …
Why is That Information Needed?!?
September 28, 2016 / in Business Valuation, Exit Planning / by Exit Strategies
When we begin a business valuation project the first thing we do is provide an extensive document request list. A week or two into the analysis, we send a customized questionnaire to help us understand the business in appropriate depth. Our questions are designed to understand the facts and circumstances of your business well enough to develop a reliable opinion of value. To the extent we can, we try to streamline and tailor our requests so as not to …
The Zen Art of Cooperative Negotiation
September 21, 2016 / in Exit Planning / by Don Ross
The common image of an M&A negotiation between a buyer and a seller is that of a rugby scrum: two masses of interlocked muscled bodies scheming and bulldozing their collective strengths in opposing directions in an effort to secure the prize without compromise and ultimately yield one winner and one loser. In contrast, what I call the “Zen Art of Cooperative Negotiation” is a playing field where the players (the principals and their attorney, M&A broker, and …
Using Retention Bonuses to Enable an M&A Transaction
September 7, 2016 / in Exit Planning, Sell a Business / by Al Statz
Assurance of business continuity is essential to most business acquisitions, and for small to mid-size companies, this often translates to retaining key employees. This blog looks at using a simple tool, called a stay bonus or retention bonus, to keep your key people on board through a sale or merger of your company. Bonuses are commonly used in business to reward employees for performance, such as hitting a sales target, implementing a new system, or boosting manufacturing productivity. …
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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