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Selling Your Business in the Covid-19 Era
October 22, 2020 / in Buy-Sell Agreements, 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 …
M&A Advisor Tip: Work Yourself Out of a Job
October 21, 2020 / in Business Strategy, Exit Planning / by Al Statz
The more your business revolves around you, the more risk buyers see. To increase business value and marketability, build a strong management team. Work yourself out of the business by developing an experienced, empowered management team. The less the business is dependent on you and your knowledge or relationships, the less risk buyers face in a transition. And less risk translates to a higher sale price. Also, more buyers will be able to buy your company …
Ten Key Drivers of Company Value
October 15, 2020 / in Business Valuation, Exit Planning / by Joe Orlando
In our current time of economic recession, social unrest and political partisanship, simple questions rarely have simple answers. For an owner operator of a small- to mid-size business, the question of business value in today’s market is increasingly difficult. It is at these times that the team here at Exit Strategies Group (ESGI) feels the need to simplify the process down to the basic premise of what drives value. In explaining value, ESGI default to …
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 …
Private Equity is Open for Business
September 18, 2020 / in Exit Planning, News, Sell a Business / by Al Statz
We stay in regular contact with private equity groups from around the country to monitor M&A market activity. Currently, the message we are hearing is that these firms are “open for business.” Private equity firms are in the business of buying, building and selling businesses. It’s how they deliver investor returns. They don’t have time to sit back and wait things out. The clock is ticking as they work to meet investor expectations within fund …
Gifting Window for 2020 May Be Closing
September 9, 2020 / in Business Valuation, Exit Planning, News / by Joe Orlando
With a Global pandemic and prospects of a sustained recession with double digit unemployment coupled with West Coast wildfires and East Coast hurricanes, I would say that everyone in these United States is looking forward to ringing in the New Year on January 1st. But before the ball drops on a socially distanced crowd in Time Square, you should think about other changes that may occur as we put 2020 in our rear-view mirrors. Specifically …
Assignment for the Benefit of Creditors: Alternative to a Bankruptcy Sale
September 5, 2020 / in Exit Planning, Sell a Business / by Al Statz
When the goal of a financially distressed business owner is to sell with minimum publicity, free of unsecured debt and potential liability for directors and management, the most advantageous exit path may be an Assignment for the Benefit of Creditors (ABC). Most buyers won’t acquire the assets of an insolvent entity unless the assets are “cleansed” through an ABC or bankruptcy process. Typically, the board of the troubled entity has decided that a rapid sale …
M&A Advisor Tip: COVID-19 Era Due Diligence, Part 4
September 3, 2020 / in Acquire a Business, Exit Planning, Sell a Business / by Al Statz
M&A buyers are still active in the midst of this uncertain business environment. However, they are mindful of added risks caused by COVID-19. These are some financial questions that are likely to come up in future due diligence in light of COVID-19: Did the business utilize any government relief, debt deferrals, or rent reductions? In terms of government relief, was the business accurately entitled to that relief and did they meet requirements for debt forgiveness? …
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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