Draft Your Team

When the NFL season kicks off, fantasy football drafts are at their peak. Everyone does their research to figure out who will be the big picks that will lead them to victory. Unfortunately, some business owners put more effort into choosing their fantasy football teams than putting together a mergers and acquisitions (M&A) team to …

The Business Wisdom of King Solomon

“If you split the baby in half, you’re not getting the value of half the baby.” That’s what a buyer said to me recently, after evaluating a division of a company my firm is representing. The business owner/seller runs a profitable import operation that retails products via e-ecommerce sites like Amazon and Walmart.com. He’s looking …

Shotgun shells after business breakup

My client called it the shotgun clause. It’s an exit strategy written into some shareholder agreements, creating a compulsory buy/sell provision when two or more owners can no longer get along. Here’s how their deal worked (many variations are possible): One owner “triggers” the shotgun clause by offering to buy out their partner at a …

Accurate accounting doubled business value

You made it. You’ve paid back your business loans and can run your company with just a line of credit. You’re profitable. You’re comfortable. And you don’t have to pay such rigorous attention to things like accounts receivable turnover and your particular accounting methods. Many of the business owners I work with have reached this …

One large customer, one big problem

We have a client in the machining industry with a customer concentration issue. Their big customer is a blue-chip manufacturer, a well-respected brand any company would want to work with, but they account for more than 65 percent of our client’s revenue. We found our client several buyers, but over the months it took to …

Know Your Buyer

Using the Market Pulse Survey results, we can identify common buyer personas for each industry segment. $5MM – $50MM Buyers in this segment are split between existing businesses (strategic buyers) and private equity firms. These buyers target businesses that represent strong investment opportunities and/or strategic growth opportunities through vertical or horizontal add-ons. Most of these …

Unsolicited offer? Get a boxing coach

The M&A marketplace is very strong, and, according to the Small Business Growth Index from Capital One, small business optimism is the highest it’s been since spring of 2012. So it’s not surprising that many business owners are getting phone calls and letters saying, “I want to buy your business,” or “I have a buyer …

Seller May Earn Back Stay Bonus

We’re selling a business right now in which several members of the management team hold minority shares in the company, with some holding less than one percent of the business. Management salaries are below market, but their compensation plan includes a percentage of the profits. As business sales continue to grow, their compensation has increased …

Ways to Cash Out of Your Business

It’s not easy to sell a business, but many owners have more options than they realize. The wrong approach to cashing out can have serious consequences. So evaluate the pros and cons of each option. An outright sale is the simplest exit strategy. This can work well when your family doesn’t want to take over …

It’s wise to know your buyer type

The Pepperdine Private Capital Markets Project and the Graziado School of Business partners with the IBBA and M&A Source to conduct a quarterly survey of business brokers and advisors. With four years of data in the books, we’ve see some trends move around (hot industries, market confidence) while other metrics (reason for sale) remain fairly …