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Your Buy-Sell Agreement – Keep It Current Before It Costs You Money and Grief!
November 26, 2014 / in Buy-Sell Agreements, Exit Planning, Sell a Business / by Exit Strategies
Buy-Sell agreements (BSA’s) are an essential, and often overlooked, element in allowing shareholders to realize the value of their investment in a privately held company. The BSA’s purpose is to a) provide a market for ownership interests, b) establish the price and terms for these interests, c) specify a buy-sell process that is orderly and reasonable, and d) specify financing should a “trigger” event occur. There are several reasons this contract among owners can fail. …
Don’t be a Victim of Seller’s Remorse
November 22, 2014 / in Exit Planning, Sell a Business / by Jim Leonhard
More business owners than you’d think second-guess themselves within a year of selling the business. In my experience as an M&A advisor and business valuation expert, the main reason for the failure of business exits is the seller’s lack of planning on how and when to exit. Too many owners never plan and simply wait until something happens that essentially forces them to sell, such as health issues, marital stresses, poor business conditions, or when “burnout” becomes …
Upcoming Event: Valuing a Business for Estate Purposes
November 17, 2014 / in Business Valuation, News / by Al Statz
Society of California Accountants North Bay Chapter Annual Estate & Trust Update At the Sheraton Sonoma County Click here for enrollment information. My background as a business valuation expert, M&A advisor, corporate development executive and business owner allows me to bring a wealth of knowledge and first-hand experience to closely held and family business owners as they consider their exit options and plan successful ownership transfers. I enjoy educating business owners on these topics, and sharing my expertise with accountants, attorneys, lenders …
Ingredients of a Successful Business Sale
November 10, 2014 / in Exit Planning, Sell a Business / by Al Statz
Going to market when you and your business are ready to sell and market conditions are right provides the best opportunity to maximize results. Let’s look at how these three ingredients combine: You, the Owner The Business itself The Market Having these ingredients come together at the same time requires planning. You can prepare personally and you can prepare your company for sale. You can’t control the market, but you can choose market timing. So, basically, it’s up to …
Is your company an add-on candidate?
November 3, 2014 / in Exit Planning, Sell a Business / by Al Statz
Most business acquisitions by private equity firms have been “add-on” deals lately. In private equity jargon, a large company acquisition is usually a platform acquisition, and a smaller company acquistion is most often an add-on (or “bolt-on”, or “tuck-in”) acquisition. Add-on acquisitions are complementary to and synergistic with an existing platform company held by a private equity firm. Platform acquisitions dominate the headlines and represent most of the dollar volume, but add-ons now represent the majority of …
How Big of a Concern is Confidentiality in Business Sales?
October 27, 2014 / in Sell a Business / by Jim Leonhard
All sellers are rightly concerned about confidentiality of the potential sale of their business during the marketing and due diligence processes. Such concerns, while important, should not deter sellers from casting a wide net in pursuit of selling to the right buyer at the highest price. Having more quality buyer prospects means increasing the likelihood of achieving that goal. Professional business brokers (intermediaries, investment bankers, M&A advisors) have rigorous processes and strict procedures for maintaining …
Small Business Transactions Up 18%, Sellers Earn Higher Sale Prices – According to Industry Report
October 16, 2014 / in Acquire a Business, Sell a Business / by Al Statz
It’s a very good time to be a seller. According to a report released on October 16, 2014, U.S. small business sale transaction levels are on pace for a record-breaking year. And while the post-recession market has generally favored buyers, a shift appears underway, with sellers now receiving higher selling prices, higher percentage of asking prices and improved cash flow multiples. The full results are included in BizBuySell’s Q3 2014 Insight Report, which aggregates statistics from …
A Sample Acquisition Due Diligence Checklist
October 8, 2014 / in Acquire a Business, Sell a Business / by Al Statz
In privately-held business acquisition transactions, as soon as a letter of intent or contingent purchase agreement has been negotiated, the buyer’s in-depth due diligence begins. To kick-start this phase of the transaction, the buyer requests from the seller all of the information that they need to conduct their investigations. Once the buyer is satisfied, the transaction proceeds to the closing phase. Due diligence document requests vary greatly in length and content, depending on the type …
The Importance of a Credible and Competent Valuation Expert
September 30, 2014 / in Business Strategy, Business Valuation / by Al Statz
The need for business valuation arises in many circumstances ranging from dispute resolution, to estate planning, to the sale of a business to name only a few. As in all professional disciplines, it is important to hire a practitioner who is fully trained, able to discern relevant facts, and abreast of current best practices. Consider the following New York Supreme Court case.* Adelstein v. Finest Food Distributing Co Two brothers and their uncle each owned …
You’re ready to sell. Is your business?
September 25, 2014 / in Sell a Business / by Jim Leonhard
A recent article in the NY Times caught my attention: “Why Many Small Businesses Cannot Be Sold”, by Josh Patrick. The article cites a statistic that only about 4 to 5% of businesses recently listed on BizBuySell (a popular website that lists businesses for sale) actually sell. That’s an alarming statistic. According to the article there are three fundamental issues business owners need to address if they really want to sell their business: Create a …
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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