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Selling to Competitor Not Only Option
June 29, 2020 / in Exit Planning / by Exit Strategies
Many business owners have preconceived ideas about who will buy their business. A lot of owners think their most likely buyer is the competitor down the street. Maybe that was true, once upon a time. But the M&A world has changed dramatically-and continues to evolve. Today, when we talk about selling your business, we’re really talking about a wide breadth of options. This is not an all or nothing scenario — you can sell all …
Business Values May Not Decline
June 17, 2020 / in Acquire a Business, News, Sell a Business / by Al Statz
A recent survey of M&A advisors and business brokers showed that of all small and medium businesses on the market at the end of Q1, about 35% had closed (temporarily at least), 40% were operating at partial capacity, 4% had benefited, and 21% remained unaffected by COVID-19. Not surprisingly, advisors indicated that 46% of lower middle market deals were delayed at the end of Q1 and 11% had been cancelled altogether. For deal cancellations, 25% …
M&A Advisor Tip: Management Cross-Training
June 17, 2020 / in Exit Planning / by Al Statz
Management Cross-training and Succession Planning A strong and committed management team has long been one of the attributes buyers look for in a business. And now, in the era of COVID-19, buyers will be increasingly interested in issues of cross-training, management succession, and leadership development. Buyers will be looking at how the business could be impacted if health issues or quarantine requirements prevent certain team members from working. Review your management succession plans, leadership development …
M&A Advisor Tip: SBA debt relief incentivizes buyers
June 2, 2020 / in Acquire a Business, News, Sell a Business / by Exit Strategies
SBA debt relief is is a big incentive for buyers to move ahead with small business acquisitions right now. The SBA will pay six months of principal, interest, and any associated fees that borrowers owe for all current … as well as new 7(a), 504, and microloans disbursed prior to September 27, 2020. As an added incentive, SBA lenders have the authority to defer loan payments for six months. That means some buyers could acquire …
Is COVID-19 the ultimate cure for one-more-year-itis?
June 2, 2020 / in Exit Planning / by Exit Strategies
I was talking to a business owner who shared how her teenage kids remember the Great Recession and the financial impact it had on their household. Now they’re seeing their own economic upheaval, in the form of lost summer job (income) opportunities. In good times and lean, money issues have always weighed heavily on her mind. So, she can’t help but wonder how this will impact her children’s financial mindset. I have similar thoughts, but …
Hard Times: Great Opportunities
May 30, 2020 / in Business Strategy, News / by Don Ross
The effects of the Covid -19 Pandemic have been real and apparent. GDP in the first quarter declined by 4.8% according to the Bureau of Economic Analysis and economists are predicting the American economy to contract by as much as 30% in fiscal year 2020. Brutal. So what is there to get excited about? Opportunities are laying in the weeds – that’s what. Entrepreneurs of newly acquired businesses are aggressively moving forward in their business …
Valuing a Business in the Time of COVID-19
May 19, 2020 / in Business Strategy, Business Valuation / by Joe Orlando
Business owners and investors alike are asking themselves the same questions in the current COVID-19 environment. Are there opportunities in downturns? If so, when do you know when buy and sell? What are my illiquid assets worth? A former boss and one of the best bond traders I’ve ever met frequently used a popular trader’s phrase that predicting when a market will bottom and turn is “like trying to catch a falling knife.” A recent article revisited …
M&A Advisor Tip: Planning for Death or Disability
May 18, 2020 / in Business Strategy, Exit Planning / by Exit Strategies
The Wall Street Journal recently ran an article about CEOs accelerating succession plans and backup management strategies in the wake of COVID-19. It’s a question every owner should be asking (now and always): What happens if you are unable to manage your company? No one likes to think about all the what-if scenarios in life. Most business owners have no plan for exiting their business at all, much less exiting in the face of conflict …
M&A in Pandemic, Not Panic
May 18, 2020 / in News, Sell a Business / by Exit Strategies
Business advisors are digging in right now, trying to figure out how COVID-19 will affect their clients. We’ve been talking with business owners, active buyers, and other advisors around the country. Right now, we know that some M&A deals are getting delayed over routine process points. Certain bank approvals that used to happen in regular in-person review meetings are being held up as discussions take place via email chain instead. Some businesses with real estate …
Market Pulse Survey: Deal Cancellations due to COVID-19
May 18, 2020 / in Acquire a Business, News, Sell a Business / by Exit Strategies
M&A advisors saw many of their business sale/acquisition deals delayed, put on hold or cancelled in March 2020 as a result of the COVID-19 Pandemic. Who was cancelling these deals? The following chart shows the results of this survey question from the latest Market Pulse Survey. Presented by IBBA, M&A Source & in partnership with Pepperdine University “Deal activity is always expected to constrict during times of uncertainty. Both sellers and buyers are being conservative …
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