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Sell a Business Insights
M&A Advisor Tip: Drive Cash to the Bottom Line
March 4, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
We all like to save money on our taxes. But hiding personal expenses in your tax return can do more harm than good. Most businesses are purchased as a multiple of cash flow (roughly EBITDA less capital expenditure needs, less increases in working capital as the company grows). If buyers and lenders can’t find your personal expenses in the financials or if the adjustments are so severe they border on tax evasion, they’ll be suspicious …
M&A Advisor Tip: When the Kids Don’t Want the Business
February 19, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
Many business owners are surprised to find out their kids don’t want to take over. Maybe the kids never wanted it. Or maybe they changed their mind after working in the business for a while. Either way, some business owners get caught having to make quick decisions about transferring their company to a third party. Our advice: Talk to an M&A advisor, EVEN IF you plan to sell to your kids. It can take years …
M&A Advisor Tip: What Does It Feel Like When You Sell?
February 1, 2020 / in Exit Planning, Sell a Business / by Exit Strategies
“Immense satisfaction tinged with loss.” That’s how one business owner described selling his business. After putting years of hard work into building a business, many owners have a hard time letting go. Emotions run high, and those emotions can lead to some regrettable decisions. As advisors, part of our role is to help you make sound choices when it comes to selling your business. We can help you sort through your emotions and your goals …
Building Value Means Building Leaders
February 1, 2020 / in Business Strategy, Sell a Business / by Exit Strategies
It’s the New Year, that time when many business owners make a fresh resolve to develop their business. For some, that means updating equipment and driving sales. But others will focus on something more personal and possibly more pivotal: developing their leaders. GF Data shows that a solid management team will increase the valuation multiple. For smaller businesses, the quality of your management team can be an even bigger factor, influencing whether your business sells …
M&A Advisor Tip: Earnouts Break Valuation Deadlocks
January 17, 2020 / in Sell a Business / by Exit Strategies
Earnouts are often used to bridge a valuation gap between a buyer and a seller. It’s a compromise, of sorts, to break a purchase-price deadlock when the seller wants more than the buyer is willing (or able) to pay. In an earnout, a portion of the purchase price is paid out later, based on the company’s financial performance over time. Earnouts typically last from 1 to 3 years, subject to negotiation. Some earnouts include acceleration …
‘No Shop’ Protects Buyer Investment in M&A
January 17, 2020 / in Acquire a Business, Sell a Business / by Exit Strategies
A no shop provision is an important part of M&A transactions. Also known as an exclusivity clause, a no shop clause prohibits the seller from sharing information or negotiating with other would-be buyers for a specified time frame. Prior to this, the seller is negotiating with several buyers. The goal is to entertain multiple offers and figure out which buyer will ultimately provide the best deal for the seller. Once the seller has identified their …
How Key Employees Factor into a Business Sale
January 15, 2020 / in Exit Planning, Sell a Business / by Al Statz
One of the negotiations we get involved with as M&A advisors is retention of key employees. Nearly every private business in every industry has a few “indispensable” employees. Before taking a company to market, we work with clients to evaluate key-person dependence and develop strategies for retaining key employees. This article offers help in identifying key employees in your business. On one hand, having key employees is a selling feature of a business. But, when …
Corporate Social Responsibility in Mergers and Acquisitions
January 2, 2020 / in Business Strategy, Exit Planning, Sell a Business / by Al Statz
Like it or not, and irrespective of our personal political ideologies, corporate social responsibility has gained in popularity in the past decade. In this article, we’ll discuss what Corporate Social Responsibility (CSR) is and what it means for private business owners from an exit strategy perspective. The Four Pillars of CSR CSR is often thought of as having four pillars: the community, the environment, the marketplace and the workplace. Community. This pillar refers to the …
Consider Your Options When Selling a Business with Real Estate
December 18, 2019 / in Exit Planning, Sell a Business / by Al Statz
We often get asked how owning a facility (versus leasing one) affects the sale of a company, so I dug through our 17 years of business sale transactions involving seller-owned real estate to look for patterns. And the archives didn’t disappoint. I found five common deal scenarios that shed light on this question. But first, here’s the short answer. Owning your real property is likely to increase the demand, transferability and selling price of your …
Why Business Owners Should Prepare to Sell Now
December 7, 2019 / in Exit Planning, Sell a Business / by Al Statz
Reason 1: Concentration of Wealth A typical business owner has 70-80% of their wealth tied up in their business. That’s a lot of eggs to carry in one basket. On top of that, private businesses are less liquid and more risky than stocks, bonds and real estate investments. Fortunately owners can control the value and sell-ability of their businesses. Now, whether they exercise that control is another matter! Reason 2: Many Sales Are Unplanned …
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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