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Exit Planning Insights
M&A ADVISOR TIP: What happens to employees after I sell?
March 4, 2021 / in Exit Planning, Sell a Business / by Al Statz
Business owners often come to us concerned about employee jobs and retention issues after a sale. They worry that selling their business will lead to job losses if certain positions become redundant. However, buyers today are often just as focused on retention issues. Your experienced talent can be a key driver of enterprise value, and buyers want to make sure these people stick around. Your management team is the highest priority retention target, and deal …
March 2021 – Now may be the time to sell your business
March 4, 2021 / in Exit Planning, News, Sell a Business / by Roy Martinez
It typically takes 6-12 months (or more) to sell a business. So… if you want to sell your business in 2021, you really need to start now. Selling a business has many steps: 1. Assess the business to establish probable selling price and validate your decision to sell 2. Create a plan 3. Build a business sale team – intermediary (Exit Strategies), attorney, CPA, others 4. Develop market materials – NDA, Executive Summary, CIM (confidential …
Tax changes could accelerate business sales in 2021
January 22, 2021 / in Exit Planning, Sell a Business / by Al Statz
To complete deals in 2021, ahead of possible tax changes, owners and deal teams need to act fast. With the Democrats in the White House and having the tie-breaking vote in the senate, it is likely that taxes on corporations and wealthy individuals will increase during this administration. When and how much are unknown. With COVID recovery as the administration’s immediate priority, many think we will have until 2022. Biden has proposed raising long-term capital …
M&A Advisor Tip: ESG Diligence on the Rise in M&A
January 22, 2021 / in Acquire a Business, Exit Planning, Sell a Business / by Al Statz
Companies that are able to showcase their Environmental, Social and corporate Governance (ESG) capabilities stand to gain a competitive advantage and make themselves more attractive to potential acquirers. ESG issues cover a wide range of corporate practices that could include everything from environmental stewardship, health and safety policies, employee well-being, community support, to corporate culture issues. In recent research from Datasite, 84% of dealmakers rated ESG as an “important/very important” M&A due diligence consideration. And 78% …
M&A Advisor Tip: Be able to articulate your growth story.
December 18, 2020 / in Exit Planning, Sell a Business / by Al Statz
Buyers want to acquire businesses with profit AND growth potential. Where is your business headed? Will it still be relevant in 5 years? Where will growth come from? How will it outperform its industry peers? If you don’t have an expansion strategy at the ready, talk to an M&A advisor or an exit planner. We can uncover which parts of your business are most attractive to buyers. Then we can help you plan to increase …
M&A Advisor Tip: How you know when it is time to sell
December 1, 2020 / in Exit Planning, Sell a Business / by Al Statz
It may be time time to sell your business when … Revenue has plateaued and you no longer see how to grow the business. You’re not sure how to reach the next level on your own. Your industry is consolidating around you. The current probable selling price of your business will satisfy your personal financial goals and a major economic or political shift could erode value. You’d like to diversify your assets and are ready take …
Better to sell early in consolidation. Here’s why.
November 11, 2020 / in Exit Planning, Sell a Business / by Al Statz
Consolidation is inevitable in maturing industries. As an M&A advisor working with owners of private wholesale distribution and manufacturing companies, one of the questions I get asked is whether it is better from a valuation perspective to sell early in a consolidation phase, or hold off. My answer is always case-specific, but generally earlier is better, all else being equal. Before I explain why, I want to point out that industry consolidation is not always …
M&A Advisor Tip: Finish Strong
November 3, 2020 / in Business Strategy, Exit Planning, Sell a Business / by Al Statz
Begin the sale process while your business is on an upward trend. Buyers pay a premium for businesses with well-defined opportunities and a strong growth story. Too many business owners get tired or complacent and psychologically retire early, before the sale. In fact, after retirement, burnout is the number two reason business owners sell. Unfortunately, burnout usually leads to declining revenues and reduced leverage in the sale process. Stay focused until the end and sell …
Lopsided Market Drives M&A Values in Pandemic
October 22, 2020 / in Exit Planning, News, Sell a Business / by Al Statz
With all the upheaval in the world right now, you’d expect M&A deal values to take a dip. But recent market analysis shows that’s anything but the case. According to GF Data [1], companies with an enterprise value of $10 million to $25 million sold at an average multiple of 5.9 times EBITDA in the first two quarters, versus a 5.7 average from 2003 to present. Similarly, business sales with a transaction value of $25 …
Selling Your Business in the Covid-19 Era
October 22, 2020 / in 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 …