Exit Strategies Insights

Industry insights, knowledge base and announcements for business owners and professional advisors

Sell a Business Insights

Small Business Transactions Up 18%, Sellers Earn Higher Sale Prices – According to Industry Report

It’s a very good time to be a seller. According to a report released on October 16, 2014, U.S. small business sale transaction levels are on pace for a record-breaking year. And while the post-recession market has generally favored buyers, a shift appears underway, with sellers now receiving higher selling prices, higher percentage of asking prices and improved cash flow multiples.  The full results are included in BizBuySell’s Q3 2014 Insight Report, which aggregates statistics from …

Read more »

A Sample Acquisition Due Diligence Checklist

In privately-held business acquisition transactions, as soon as a letter of intent or contingent purchase agreement has been negotiated, the buyer’s in-depth due diligence begins.  To kick-start this phase of the transaction, the buyer requests from the seller all of the information that they need to conduct their investigations. Once the buyer is satisfied, the transaction proceeds to the closing phase. Due diligence document requests vary greatly in length and content, depending on the type …

Read more »

You’re ready to sell. Is your business?

A recent article in the NY Times caught my attention: “Why Many Small Businesses Cannot Be Sold”, by Josh Patrick. The article cites a statistic that only about 4 to 5% of businesses recently listed on BizBuySell (a popular website that lists businesses for sale) actually sell. That’s an alarming statistic. According to the article there are three fundamental issues business owners need to address if they really want to sell their business: Create a …

Read more »

Escrows in California Business Sale Transactions

Business “Transaction Escrows” protect the interests of buyers and sellers, and are used extensively by transaction attorneys and brokers in California. Then there is what’s called a “Holdback Escrow” which secures post-closing obligations and adjustments. This blog introduces you to both types of escrows and how they facilitate business deals. What is a Business Transaction Escrow?  In California, for business sale-purchase transactions of all sizes and shapes, it is common to have an escrow agent serve …

Read more »

Please don’t tell me liquidation is my best exit option!

While the typical premise of value in valuing an operating business for a sale/acquisition or exit planning is as a going concern, occasionally, facts and circumstances indicate that an owner would be better off liquidating his or her business.  Unfortunately, this often comes as a shock to an owner who has spent years working in and building a business with the expectation that it can be sold for enough to provide a significant nest egg …

Read more »

Be Prepared!

“Be Prepared” is the Boy Scout Motto that has served young individuals and their character development in over two hundred countries since 1907. It can also be an effective mantra for a business owner who will engage in marketing and selling a business.  A well prepared business owner plays a vital role on the transaction team and helps ensure maximum value to the shareholders and a smooth transition of ownership. Critical components of “Be Prepared” for …

Read more »

The ESOP Solution

We are often asked about Employee Stock Ownership Plans (ESOPs) as an exit strategy. For business owners who are curious about the ESOP exit option, here are links to two recent articles that discuss ESOP basics and some of the pro’s and cons of ESOPs. Both articles are from recent issues of MERGERS & ACQUISITIONS magazine, which is published in partnership with the Association for Corporate Growth, in which I am a member. Recaps Turn to …

Read more »

Is Your Business Prepared for Sale?

Serious potential consequences await owners who neglect to prepare their business, and themselves, for a future sale or transfer. Here are ten exit planning mistakes to avoid: The business experiences a sudden, catastrophic loss and all of the owner’s financial eggs are in the business. A perfect buyer suddenly appears and makes a fantastic offer, but the owner cannot consummate the sale due to prohibitive (and avoidable, with planning) tax cost and a lack of …

Read more »

Ten Commandments of a Successful Exit

The average person doesn’t realize that selling a company is often the most gut-wrenching transaction of a business owner’s life. They’ve just spent their life building the business, it’s their largest asset, and they have no training or experience in selling a business. With that as a backdrop, here are ten practical directives that will help you make better exit strategy decisions and achieve a more successful sale. 1. I shall plan ahead Why sell? …

Read more »

Selling a Business Using a CRT

When a business owner decides to sell or transfer ownership, the owner often thinks about achieving the following three post-transaction objectives: 1) being financially independent, 2) taking care of family members, and 3) possibly a donation to a favorite charity. All three of these objectives can sometimes be met by setting up a Charitable Remainder Trust (CRT) – the subject of a recent article by my friend and colleague Darrell V. Arne, CPA, ASA, CM&AA covering …

Read more »

Request a Call
close slider
Request a Call and we will get in touch with you
  • This field is for validation purposes and should be left unchanged.