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Sell a Business Insights
M&A Advisor Tip: Be able to articulate your growth story.
December 18, 2020 / in Exit Planning, Sell a Business / by Al Statz
Buyers want to acquire businesses with profit AND growth potential. Where is your business headed? Will it still be relevant in 5 years? Where will growth come from? How will it outperform its industry peers? If you don’t have an expansion strategy at the ready, talk to an M&A advisor or an exit planner. We can uncover which parts of your business are most attractive to buyers. Then we can help you plan to increase …
M&A Advisor Tip: How you know when it is time to sell
December 1, 2020 / in Exit Planning, Sell a Business / by Al Statz
It may be time time to sell your business when … Revenue has plateaued and you no longer see how to grow the business. You’re not sure how to reach the next level on your own. Your industry is consolidating around you. The current probable selling price of your business will satisfy your personal financial goals and a major economic or political shift could erode value. You’d like to diversify your assets and are ready take …
Better to sell early in consolidation. Here’s why.
November 11, 2020 / in Exit Planning, Sell a Business / by Al Statz
Consolidation is inevitable in maturing industries. As an M&A advisor working with owners of private wholesale distribution and manufacturing companies, one of the questions I get asked is whether it is better from a valuation perspective to sell early in a consolidation phase, or hold off. My answer is always case-specific, but generally earlier is better, all else being equal. Before I explain why, I want to point out that industry consolidation is not always …
Discover Exit Strategies’ New Checklist of COVID-Era Normalization Adjustments
November 5, 2020 / in Business Valuation, News, Sell a Business / by Al Statz
For most of us, 2020 has been one of the most challenging years of our lives. The pandemic has affected business performance both negatively and positively, temporarily and structurally. It will permanently reshape the global economy in several ways, most of which we are just beginning to understand. Change and uncertainty makes the job of valuing and appraising businesses and business assets more challenging. At the core of every business valuation analysis is the process …
M&A Advisor Tip: Finish Strong
November 3, 2020 / in Business Strategy, Exit Planning, Sell a Business / by Al Statz
Begin the sale process while your business is on an upward trend. Buyers pay a premium for businesses with well-defined opportunities and a strong growth story. Too many business owners get tired or complacent and psychologically retire early, before the sale. In fact, after retirement, burnout is the number two reason business owners sell. Unfortunately, burnout usually leads to declining revenues and reduced leverage in the sale process. Stay focused until the end and sell …
Lopsided Market Drives M&A Values in Pandemic
October 22, 2020 / in Exit Planning, News, Sell a Business / by Al Statz
With all the upheaval in the world right now, you’d expect M&A deal values to take a dip. But recent market analysis shows that’s anything but the case. According to GF Data [1], companies with an enterprise value of $10 million to $25 million sold at an average multiple of 5.9 times EBITDA in the first two quarters, versus a 5.7 average from 2003 to present. Similarly, business sales with a transaction value of $25 …
Selling Your Business in the Covid-19 Era
October 22, 2020 / in Exit Planning, Sell a Business / by Louis Cionci
Business owners contemplating a sale may be asking the question: Is this a good time to sell my business or do I need to wait until the Covid-19 economic disruption is over? Let’s explore three interrelated factors to help an owner answer that question for their situation. Market Conditions Are their buyers for my business during this pandemic? Yes, there is no shortage of buyers for well-run companies. That statement was true before Covid-19 and …
Get to know your buyer: Conducting Seller Due Diligence
October 9, 2020 / in Acquire a Business, Sell a Business / by Adam Wiskind
As a business owner selling your company, prospective buyers will perform due diligence on you and your company. But you should also conduct thorough due diligence on the prospective buyer. When a buyer conducts due diligence on a company, they want to know that the company’s operations, finances, HR, environmental and legal matters (etc., etc.) are in order. When a seller of a small business conducts due diligence on a buyer, they want to know …
Pros & Cons of Selling Your Company to a Strategic Buyer
October 7, 2020 / in Exit Planning, Sell a Business / by Al Statz
When it’s time to sell your business, you will likely have multiple buyer types to choose from. You could receive offers from strategic, financial, and individual buyers. As you start thinking about selling your business, think about what’s most important to you in a sale. Different buyer groups tend to operate by different playbooks. Understanding what each group typically has to offer can help us target the buyers who are the best fit for your …
M&A Advisor Tip: Put on Your Poker Face
October 7, 2020 / in Exit Planning, Sell a Business / by Al Statz
Ready to sell? Talk to your spouse and trusted tax, financial and legal advisors. Beyond that, keep it a secret. Confidentiality is extremely important in almost any business sale, merger or acquisition. When stakeholders think your business is for sale, it creates dangerous uncertainty. Valuable employees start looking for other jobs, vendors tighten credit terms, and competitors use it as an entry point to poach your customers. The average business takes 9 to 12 months …