The Business Exit

As an owner looking to sell your business, there are several viable succession options that could become available. One is a Management Buyout (MBO), or sale of the company to the management team. Another common strategy is a sale to the next generation of family, typically the owner’s child (or children), grandchild or niece/nephew. There are a few key considerations…

Hooray! The owner signed a letter of intent to sell their company. Now the task of “soup to nuts” diligence begins – accounting quality of earnings, document accumulation, strategy and integration meetings, documentation. . . . The post LOI process is a second job. But, let’s not forget about the first job, running the golden goose! Many a deal has gone awry when the owner focused too much on the transaction and not enough…

It’s lonely at the top! Countless times business owners have said: “I have no one to talk to.” If the owner discusses their business with others, it is often ad hoc rather than regular, organized discussions. In addition, the owner may not feel comfortable having strategic discussions with their employees.  So, what is an owner to do? How about organizing an active board of advisors? The dilemma for the business owner with…

Consider this scenario: the owner has identified the best buyer for their company and they are in agreement with respect to business value. With that said, how will the business value (“consideration”) be paid to the owner? You may have heard the saying: “You name the price and I will name the terms.” In other words, the…

When selling your business, there are several types of buyer candidates that may be interested in purchasing your company. More specifically, privately-held companies may see interest from corporations (strategic buyers), management (management buyout), individuals (seeking to purchase/operate a company), and private equity groups (“PE Groups”). Let’s delve further into what it means for the owner to sell…

Many business owners only think about the value of their company on an incident basis, i.e., when they are weighing a major transaction such as a sale, considering estate planning, installing management incentives, or going through a corporate break up or divorce. However, this does not really take into consideration why most owners are in…

Last time, we discussed five of the 10 characteristics of difficult-to-value companies. As previously mentioned, the valuation process is dynamic based on varying factors, including prevailing market conditions, operating results (where have they been and where are they headed?), customer and vendor changes, the company’s competitive advantages (and weaknesses), etc. Beyond these typical factors, however, there…

Valuing a business is rarely a cut and dried process. In fact, it is typically a complex process that is driven in large part by the subjective evaluation of company characteristics in addition to objective market metrics. In addition, company valuations are dynamic based on a variety of factors including current market conditions, the trajectory of operating…

When owners are considering the sale of their company, there are two important questions they should ask: What is my company worth? and Who are the best buyers? The answers to both questions are subjective and can vary from time-to-time. Company valuations are dynamic based on a variety of factors outside the owner’s control (hence be…

Business owners know a lot about their companies, right down to the minute details of their day-to-day operations, customers, marketing, payroll and personnel. However, they often do not know one of the most important details of all — the value of their company if they were to market it for sale.  The concept of fair market value can be difficult to assess…