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Sell a Business Insights
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, …
M&A ADVISOR TIP: What happens to employees after I sell?
March 4, 2021 / in Exit Planning, Sell a Business / by Al Statz
Business owners often come to us concerned about employee jobs and retention issues after a sale. They worry that selling their business will lead to job losses if certain positions become redundant. However, buyers today are often just as focused on retention issues. Your experienced talent can be a key driver of enterprise value, and buyers want to make sure these people stick around. Your management team is the highest priority retention target, and deal …
March 2021 – Now may be the time to sell your business
March 4, 2021 / in Exit Planning, News, Sell a Business / by Roy Martinez
It typically takes 6-12 months (or more) to sell a business. So… if you want to sell your business in 2021, you really need to start now. Selling a business has many steps: 1. Assess the business to establish probable selling price and validate your decision to sell 2. Create a plan 3. Build a business sale team – intermediary (Exit Strategies), attorney, CPA, others 4. Develop market materials – NDA, Executive Summary, CIM (confidential …