Exit Strategy News & Insights

Insights, knowledge base and announcements for business owners and professional advisors

Monday Morning Quarterbacking in Business Valuations

September 2, 2015 / in Business Valuation / by Jim Leonhard

Is hindsight appropriate in retrospective valuations? As business valuation experts, we are often retained to provide a conclusion of value as of a date that is in the past. For example, valuations for estate tax filings often use the date of death, which can be as much as a year in the past. Valuation dates for litigation cases can be even further in the past. Normally, using hindsight is discouraged in business valuations — the expert …

Simple Way to Avoid Stale Thinking and it’s Ugly Cousin Group-Think

August 26, 2015 / in Business Strategy, Exit Planning / by Al Statz

As a professional advisors we all have habits, standards, rules and regulations that direct much of our daily activities. It’s important that we constantly reexamine our preconceptions, processes and practices to avoid stale thinking. It’s easy to default to accepted dogma that might be hindering our work. This isn’t to say everyone needs to be on the absolute leading or bleeding edge of their profession. However, periodically challenging our thinking and methods helps stimulate us …

Marketing a Business: The Need for Confidentiality

August 20, 2015 / in Acquire a Business, Sell a Business / by Don Ross

Maintaining confidentiality during the M&A sale process is a critical factor in successful business transactions. At the onset, during the marketing phase of a business sale, you are walking a tightrope between those you want to inform and those you don’t. Confidential information is shared only with qualified buyers who have evidenced professional and financial capacity. Information is withheld from those, who by virtue of their relationship with the seller’s business, could prove detrimental …

What is a Recapitalization Exit Strategy?

August 14, 2015 / in Exit Planning, Sell a Business / by Al Statz

One of the exit strategies available to company owners is called a recapitalization, or “recap”. In a recapitalization, an investor (usually a private equity firm) purchases an equity interest in your company using a combination of cash and debt financing. They expect to grow the company and earn an attractive return on their cash investment when they sell the company at a higher price in 3-7 years. Their value creation strategy usually involves initiatives to …

How Well Do You Know Your Exit Options?

July 26, 2015 / in Exit Planning, Sell a Business / by Exit Strategies

You have built a business that provides a strong income and comfortable lifestyle. However, if you are like most business owners you haven’t made the time to know the range of options you have to successfully exit the business and transfer your wealth. The tax, legal, valuation, deal structure, and insurance considerations are many. Even if you had the time, where do you begin? Before you can evaluate any of these options, you must first …

Asset Appraisals May be Needed to Support a Business Valuation

July 26, 2015 / in Business Valuation, Sell a Business / by Jim Leonhard

I recently valued a number businesses that required the appraisal of certain tangible assets, such as real estate and equipment – in one case its was an extensive library of manuals and maintenance specifications for a service business. At what point do we look for a appraisal specialist with particular expertise to value such assets? The simple answer is, it depends on materiality. If it is clear that the business enterprise value is well …

A Pyrrhic Victory

July 4, 2015 / in Sell a Business / by Don Ross

A Pyrrhic Victory is defined as a victory that is offset by staggering losses, to the extent that the victor incurs losses that are equal to or greater than those of the adversary. Its origin dates back to Pyrrhus, the king of Epirus (now part of present day Greece) who defeated Roman armies at Asculum in 280 B.C. and suffered such heavy losses of troops and commanders that he was unable to amass new officers …

Exit Strategies: a Speaking Resource

June 24, 2015 / in News / by Jim Leonhard

Professional Speaker for Your Next Meeting, Conference or Webinar Exit Strategies’ professional advisors regularly present insightful and timely information on business valuation, succession planning, and mergers and acquisitions to business owners and their advisors, including attorneys, CPA’s and wealth managers. For example, Jim Leonhard was invited to give a presentation on July 8th to the California Society of CPA’s – Management of an Accounting Practice (MAP) entitled, “Avoiding Landmines in Buy-Sell Agreements: A Business Valuation …

Exit Strategies Sells ExpressPCB to Strategic Buyer

June 13, 2015 / in News / by Al Statz

Exit Strategies recently sold California-based ExpressPCB, North America’s leading supplier of custom printed circuit boards for prototyping and low volume production. Founded in 1998, ExpressPCB pioneered the market for quick-turn circuit boards using proprietary electronics design software and one-click ordering. For Sunstone Circuits, an Oregon-based printed circuit board fabricator, the acquisition is synergistic and accretive. Deal terms are confidential. Exit Strategies advised ExpressPCB’s owners through the entire M&A process, including valuation, offering memorandum preparation, identifying …

Vaguely Right or Precisely Wrong about Cash Flow

June 3, 2015 / in Business Valuation, Exit Planning / by Al Statz

Warren Buffet once quoted the economist John Maynard Keynes, “I would rather be vaguely right, than precisely wrong,” in describing how he determines the appropriate cash flow measure of a company. Indeed, determining the value of a business is not a precise exercise. However, neither is the process random guesswork. After assessing the facts and circumstances of the business, the appraiser’s goal is to find a value that represents what hypothetical or actual market participants …