Make Sure Attorney is a Deal Maker

Reps and warrants are one of the top five negotiated items in a business sale. These tie back to legal and ethical issues like whether the business is yours to sell and that you stand behind your record keeping. Negotiations here can center around language like “absolutely true” versus “to the best of my knowledge.” …

Gas in the Tank

In the lower middle market, most buyers want some gas left in the tank. They’re looking for a normal level of working capital, which would typically include inventory and receivables, minus accounts payable, averaged over 12 months. Problems occur when business owners get lax on working capital. They pay bills immediately while letting customers delay …

The Role of an M&A Advisor

Selling your business without assistance from a skilled M&A advisor is almost always a bad idea. The skill and experience of an advisor whose business it is to sell companies ensures that owners don’t go into the process poorly prepared or naive. Every sales process brings rough patches and challenges. A skilled advisor helps you …

Are You on the Trigger Plan?

When it came time to sell their business, less than half (43%) of all business owners planned ahead. What that means is that most business owners wait for some kind of trigger before they go to market. Those triggers are often negative in nature, stemming from a family health issue, conflict, or (most commonly) burnout. …

Ready and Growing

We’re ready to sell a business that isn’t going to the market. Why? The owners asked us to create a contingency plan in case: a) something unforeseen happened to the CEO or b) the business was approached by an unsolicited buyer They want a plan in place, ready to execute, should the need arise. Why …

Get an Annual Estimate of Value

Most small business owners (78%) plan to sell their business to fund their retirement, and they need that sale to cover 60 to 100% of their retirement income. Yet, when it comes time to sell their business, less than half (43%) of all business owners plan ahead. Imagine you worked in corporate America but waited …

Not by Price Alone

When it comes to buying a business, buyers aren’t looking for low price competitors. They want a business with strong margins and a value proposition. That means you have to do more than price yourself against the competition. Figure out why your business is different from the competition and why that differentiation matters to your …

Telling Employees About a Sale

It’s always a challenge, deciding when to tell your employees the business is being sold. Some sellers share their plans right away while others wait until the deal is signed and complete. We believe the best solution is usually somewhere in the middle. We’ve had good success when sellers involve a few key managers early …

I Want What They Got

Sometimes sellers hear that a business in their industry got a certain multiple, so they want the same number. But multiples depend on several factors, especially the size of the business being sold. For Main Street deals, multiple are typically based on SDE without working capital (approximately 2.5-3.5x SDE in 2016). In the lower middle …

Five things that can affect the value of your business

Five things that can affect the value of your business By Brad Kirkpatrick There are five dismal Ds that can affect your business: – death – divorce – disability – disagreement – departure But a regularly updated estimate of value (EOV) can limit conflict when the D’s hit. A current EOV protects against value disputes …