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Sell a Business Insights
M&A Advisor Tip: Confidence in Numbers
June 2, 2021 / in Exit Planning, Sell a Business / by Al Statz
Most of our clients have CPA Compiled or Reviewed financial statements, and some go a step further with Audited statements. Reviewed financial statements are acceptable, and you can do even better with Audited statements a year or two before you sell. With validated financial accuracy, you increase buyer confidence, shorten due diligence, and help get your company sold. We’ve had buyers tell us they’ll bid a quarter to a half to a full turn more …
M&A Advisor Tip: Go ugly early
May 18, 2021 / in Sell a Business / by Al Statz
We have a common saying: “Go ugly early.” When you’re selling a business, put issues on the table right away. Whether you’ve just lost a customer, your backlog isn’t what it was, or you’re operating at capacity—be up front. Providing clarity around your business flaws serves two purposes. First, it makes the whole process more efficient. If customer concentration is a no-go issue for a buyer, let’s flush them out early before we’ve invested any …
Ten Commandments of Successful Business Exits
May 10, 2021 / in Exit Planning, Sell a Business / by Louis Cionci
Business owners contemplating a sale may be asking the question: What are the most important principles to achieve a successful business exit? Listed below are ten practical directives to help you make better exit planning decisions and achieve a successful sale. I. I shall plan ahead. II. I shall not depend on miracles III. I shall prepare my business IV. I shall not wait for perfect timing V. I shall help buyers buy VI. I …
Market Pulse Survey – Why business owners are selling
May 4, 2021 / in Exit Planning, Sell a Business / by Al Statz
The following chart shows the reasons business owners decided to sell their businesses in 2020. As in the past, owner retirements led the way. These are the results from the Market Pulse Survey conducted in the 4th quarter of 2020. Each quarter, the M&A Source and IBBA (International Business Brokers Association), in partnership with Pepperdine University’s Private Capital Markets Project, publish the results of a survey of North American lower middle market M&A advisors and …
Spring cleaning is good for business
May 4, 2021 / in Exit Planning, Sell a Business / by Al Statz
It’s time for spring cleaning, at home and at work. I only wish my clients did a regular Spring cleaning. It would make due diligence and the whole business sale process a lot smoother. Here’s what I mean: Clean financials: I harp on this a lot. Messy numbers and casual accounting practices create headaches when it comes time to sell. Audited financials, on the other hand, can actually increase a buyer’s offer. Hopefully, you have …
7 Keys to Making Your Business Sellable
April 27, 2021 / in Business Strategy, Sell a Business / by Roy Martinez
A business owner recently asked me what she could do to increase the value of her business. She wants to sell and retire in a few years. My advice was: It is easier to sell big businesses than small businesses. The magic number is $1 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). When a business has more than $1 million EBITDA, it becomes attractive to all buyer types: individuals, strategic buyers, …
Avoid the Mistake of Selling on Your Own
April 16, 2021 / in Exit Planning, Sell a Business / by Al Statz
One of our former clients, Joe, reflecting on the sale of his company said, “only those of us that have toiled at it know what it really takes to succeed in this business.” How true. Until we risk our own capital and spend years building a team, perfecting products and processes and managing through multiple business cycles, we can’t fully appreciate what it takes to succeed in a given business. Similarly, its hard for business owners, …
Biden tax plan driving business owners to market
March 17, 2021 / in Business Strategy, News, Sell a Business / by Al Statz
During his campaign, President Biden proposed tax changes that could have a significant impact on business owners. Any business owner contemplating an exit in the next few years should consider how potential tax changes could reduce their net proceeds from a sale. If Biden’s tax plans come to fruition, the capital gains tax rate could effectively double, from 20% to 39.6% for income exceeding $1 million. Right now, that means business owners need to shift …
8 Situations in Which Setting an Asking Price for Your Business Makes Sense
March 15, 2021 / in Exit Planning, Sell a Business / by Al Statz
As M&A advisors, our objective in most sale processes involving a privately held lower middle market business is to help our client obtain the best price and terms available in the marketplace. In many of our sale engagements, we go to market without an asking price and use a broad or targeted auction format to elicit the best price and terms from multiple suitors. When buyers feel competitive pressure, they are more likely to make …
Exit Strategies Advises Vege-Kurl on Sale to Private Equity group
March 12, 2021 / in News, Sell a Business / by Al Statz
Exit Strategies Group is pleased to announce that its client Vege-Kurl, Inc., a manufacturer of high-quality personal care products, has been acquired by private equity group Hemingway Capital. Founded in 1959, Vege-Kurl Inc. and its subsidiary Joar Labs is a private label contract manufacturing partner and formulator of high quality organically certified efficacious cosmetic, cosmeceutical, health & beauty, and household products. The company provides a wide variety of products such as shampoos, conditioners, hairsprays, serums, …