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Exit Planning Insights
Is 2017 a good year to sell my company?
April 26, 2017 / in Exit Planning, News, Sell a Business / by Roy Martinez
Sellers often ask us if it is a good time to sell their business. My response is usually, “yes, but it depends”. The optimum time to sell a particular business depends on many factors, and this article discusses some of them. First of all, timing depends on the company: How are its business fundamentals? Is it growing? Flat? Shrinking? Is it profitable? How is the quality of earnings? What is the outlook for the business …
Do investment bankers, M&A advisors and business brokers actually add value? If so, how?
March 30, 2017 / in Exit Planning, Sell a Business / by Al Statz
Financially savvy company owners, such as private equity groups and diversified public companies, clearly see the value that M&A advisors add, since virtually all of them hire one to run a professional sale process when selling a company in their portfolio — even when they know who the buyers are and which one is likely will pay the highest price. On the other hand, most entrepreneurs only sell their company once. As a first time …
Increase Business Value with Recurring Revenue
March 23, 2017 / in Exit Planning, Sell a Business / by Exit Strategies
Businesses with a higher percentage of recurring revenue generally sell for higher prices. Recurring revenue business models are highly sought after by strategic and private equity buyers because they are perceived as less risky. Future revenue is more predictable and requires less ongoing sales effort and reinvestment. Companies like Salesforce.com pioneered recurring revenue in the software world, creating the Software as a Service (or SaaS) model. SaaS turned the traditional software licensing model on its …
Case Study: How One Entrepreneur’s Advisors Enabled a Successful Estate Transfer
March 1, 2017 / in Business Valuation, Exit Planning / by Bob Altieri
I recently had a client who wanted to transfer his medical distribution company to his son and retire with peace of mind — a common occurrence these days. Dad and his CPA requested an opinion of Fair Market Value to set the price for a transfer of stock. After I appraised the company (S corp.) stock at $2.0 million, Dad and Son asked me how to finance the transaction. Dad was reluctant to carry a long-term loan for …
Employ a Recurring Revenue Model to Increase the Value of Your Business
February 15, 2017 / in Exit Planning / by Adam Wiskind
Businesses with recurring revenue are generally more attractive and more valuable to buyers. Recurring revenue, simply stated, is the portion of a company’s revenue that is highly likely to continue in the future. An effective recurring revenue model creates a “stickier” relationship between the provider of a product or service and the consumer. Those businesses don’t have to spend as much time and money acquiring new customers. Effective recurring revenue business models: Consumable -The original recurring revenue …
Early-Stage Tech Company Exits
January 11, 2017 / in Exit Planning, Sell a Business / by Exit Strategies
You’ve built a world-class software solution, delivered to customers as a SaaS application or web service. You’ve recruited a team and created intellectual property. Customer retention is strong and the buzz is growing in your vertical market. Each new customer acquisition represents incremental recurring revenue that falls directly to your bottom line – and the company is closing in on cash flow positive territory. Could this be the right time to sell the company? You may be thinking, I’ve barely …
Ten Exit Planning Benefits
December 28, 2016 / in Exit Planning / by Al Statz
Someone’s sitting in the shade today because someone planted a tree a long time ago. — Warren Buffett Few would argue that a successful retirement takes more planning for a business owner than it does for other people. Whether you intend to transfer your business to family, management or a third party, an exit plan is usually intended to produce a more successful exit and retirement. Here at Exit Strategies, an “Exit Plan” (or succession plan) …
Exit Strategies Sells Aldetec, Inc. to Private Equity Backed Strategic Buyer
December 10, 2016 / in Exit Planning, News / by Jim Leonhard
Sacramento, California – Exit Strategies is pleased to announce the acquisition of microwave electronics manufacturer Aldetec, Inc. by U.S. Technologies, a portfolio company of Cornerstone Capital Holdings. Sold To: Aldetec, Inc. designs and manufactures integrated microwave assemblies and RF amplifiers for the commercial, military and space flight industry sectors. US Technologies (UST), of Fair Lawn, New Jersey, provides quality electronics design, manufacturing, engineering, testing, repair and refurbishment services, from complete finished units down to the …
Don’t Forget the Net Investment Income Tax when Selling a Business
November 30, 2016 / in Exit Planning, Sell a Business / by Al Statz
The Net Investment Income Tax, which our friends at the IRS put into effect in 2013, takes an extra toll on business owners who sell their businesses; and for that matter, on most higher income taxpayers and any moderate income taxpayer whose income increases suddenly in a given tax year. What is the Net Investment Income Tax? The Net Investment Income Tax (“NIIT”) is a 3.8 percent federal tax on certain income of individuals, estates …
Selling an Ecommerce Business in the Lower Middle Market
October 10, 2016 / in Exit Planning, Sell a Business / by Exit Strategies
With continuing growth in consumer online spending and many high-profile public acquisitions this year, it seems like a great time to sell your online retail business. But things are never quite as simple as they appear. Over the past few months, several impressive acquisitions have been announced in the public markets. Walmart has purchased Jet.com at a jaw dropping $3.3 billion; a move that is presumably Walmart’s effort to narrow Amazon’s ever-increasing dominance. Consumer brands company, …
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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