The Business Exit

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…

Want to increase the value of your business to potential buyers? Make yourself dispensable by building a strong management team that collectively is knowledgeable about every facet of the company.  You are probably saying to yourself, “easier said than done.” Understandably so — it is nearly impossible for an entrepreneur not to be ingrained in every facet of their business, from facilitating sales to cultivating…

Solicited and unsolicited calls should be expected when putting your company on the market. Regardless of the potential that the caller may or may not enter the buying process, you as the current owner and seller should consider the pros and cons of negotiating with prospective buyers. The “transitional organized sale process” can shift to…

Most owners are bombarded with calls from brokers, investment bankers, and other business owners inquiring about whether the owner would consider selling their company. These calls are received on a monthly and weekly basis, if not daily. There are a variety of ways to handle these calls based on the owner’s current thinking regarding the…

As owners consider their succession options, one strategy is a management buyout (“MBO”), i.e., the sale of the company to the management team. There are a number of progressive indicators that a management buyout may be a viable option for the owner.  Along the way, hopefully, the owner has begun to determine the fair market value of the company, required sale price, and potential acceptable terms. In fact, the owner could provide specific…