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Sell a Business Insights
Know the 3 types of business buyers and what motivates them
July 16, 2021 / in Sell a Business / by Al Statz
When selling your business, you may receive offers from three kinds of buyers: Individual, financial, and strategic. Here’s a look at the most common buyers and where their motivations lie. Individual buyer: A first time buyer looks at the business to get out of corporate America and control their own destiny. Some of these buyers are passive searchers and others have very specific targets and timelines in mind. The more motivated an individual buyer is, …
Seller’s Market Sentiment Back to Pre-Covid Levels
July 6, 2021 / in Exit Planning, Sell a Business / by Al Statz
What a difference a year makes! Sellers of $1M+ enterprise value businesses have an advantage, with roughly 2/3 of M&A advisors and business brokers calling it a seller’s market for these larger businesses. Confidence is rising across all sectors. Market Pulse Survey – Quarter 1, 2021 Presented by IBBA & M&A Source Al Statz is the CEO of Exit Strategies Group. For more information on exit planning or to discuss a potential M&A or business …
Put Time into Planning Sale of Business
June 2, 2021 / in Exit Planning, Sell a Business / by Al Statz
Over my 19 year M&A advisory career, I have met many business owners who spent more time planning their children’s wedding, their 50th wedding anniversary, or even their fantasy football draft, than they spent planning for the sale of their business. According to the quarterly Market Pulse Report, we know that when it comes time to sell their business, less than half of all business owners plan ahead. That means that most owners wait for …
M&A Advisor Tip: Confidence in Numbers
June 2, 2021 / in Exit Planning, Sell a Business / by Al Statz
Most of our clients have CPA Compiled or Reviewed financial statements, and some go a step further with Audited statements. Reviewed financial statements are acceptable, and you can do even better with Audited statements a year or two before you sell. With validated financial accuracy, you increase buyer confidence, shorten due diligence, and help get your company sold. We’ve had buyers tell us they’ll bid a quarter to a half to a full turn more …
M&A Advisor Tip: Go ugly early
May 18, 2021 / in Sell a Business / by Al Statz
We have a common saying: “Go ugly early.” When you’re selling a business, put issues on the table right away. Whether you’ve just lost a customer, your backlog isn’t what it was, or you’re operating at capacity—be up front. Providing clarity around your business flaws serves two purposes. First, it makes the whole process more efficient. If customer concentration is a no-go issue for a buyer, let’s flush them out early before we’ve invested any …
Ten Commandments of Successful Business Exits
May 10, 2021 / in Exit Planning, Sell a Business / by Louis Cionci
Business owners contemplating a sale may be asking the question: What are the most important principles to achieve a successful business exit? Listed below are ten practical directives to help you make better exit planning decisions and achieve a successful sale. I. I shall plan ahead. II. I shall not depend on miracles III. I shall prepare my business IV. I shall not wait for perfect timing V. I shall help buyers buy VI. I …
Market Pulse Survey – Why business owners are selling
May 4, 2021 / in Exit Planning, Sell a Business / by Al Statz
The following chart shows the reasons business owners decided to sell their businesses in 2020. As in the past, owner retirements led the way. These are the results from the Market Pulse Survey conducted in the 4th quarter of 2020. Each quarter, the M&A Source and IBBA (International Business Brokers Association), in partnership with Pepperdine University’s Private Capital Markets Project, publish the results of a survey of North American lower middle market M&A advisors and …
Spring cleaning is good for business
May 4, 2021 / in Exit Planning, Sell a Business / by Al Statz
It’s time for spring cleaning, at home and at work. I only wish my clients did a regular Spring cleaning. It would make due diligence and the whole business sale process a lot smoother. Here’s what I mean: Clean financials: I harp on this a lot. Messy numbers and casual accounting practices create headaches when it comes time to sell. Audited financials, on the other hand, can actually increase a buyer’s offer. Hopefully, you have …
7 Keys to Making Your Business Sellable
April 27, 2021 / in Business Strategy, Sell a Business / by Roy Martinez
A business owner recently asked me what she could do to increase the value of her business. She wants to sell and retire in a few years. My advice was: It is easier to sell big businesses than small businesses. The magic number is $1 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). When a business has more than $1 million EBITDA, it becomes attractive to all buyer types: individuals, strategic buyers, …
Avoid the Mistake of Selling on Your Own
April 16, 2021 / in Exit Planning, Sell a Business / by Al Statz
One of our former clients, Joe, reflecting on the sale of his company said, “only those of us that have toiled at it know what it really takes to succeed in this business.” How true. Until we risk our own capital and spend years building a team, perfecting products and processes and managing through multiple business cycles, we can’t fully appreciate what it takes to succeed in a given business. Similarly, its hard for business owners, …