What is a shotgun clause?

We often write about the importance of an exit strategy. In my most recent article with the Green Bay Press-Gazette, I highlighted a specific exit strategy commonly called a shotgun clause. 50-50 business partnerships are common, and if the business is viable – things usually work out early on from a sales and profits standpoint. …

One family business heeds advice

A CNBC succession planning survey reports 78 percent of small business owners plan to sell their business to fund their retirement, and they’ll need 60 to 100 percent of those proceeds to cover their needs. Yet according to M&A Market Pulse data just released by Pepperdine University, IBBA, and M&A Source, of the small and …

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 …

8 Strategies for Successful M&A Negotiations

Buyers and sellers tend to see their interests as opposing. But both share one critical goal: closing the deal. Skillful negotiations can help both sides feel like they’ve gotten a good deal. This process demands time and talent. A few simple tactics can help any buyer or seller achieve success at the negotiation table. Price …

Sharing is tricky, but silence can be trouble

We’re working on getting a manufacturing business sold here in the upper Midwest. The owner has been part of the company for over 35 years and is looking to enjoy life a bit more. He plans to stay and help the new owners, but he wants to be on the shop floor, troubleshooting projects, quoting …

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 …

Sell to the kids, without discord and risk?

We’re working with one of our buy-side clients and have identified a company they’re interested in. We’ve talked to the owner and he’s considering, but he’s just not sure. The sticking point? He has two sons and he might want to pass the business on to them. I’ve been in this industry for two decades …

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 …

What You Need to Know About a Letter of Intent (LOI)

In mergers and acquisitions, a letter of intent often signals the transition from casual discussions to serious deal negotiations. A letter of intent (LOI) by no means that the deal is finished. But it does lend a tone of seriousness to the deal, and can help both parties negotiate in a more constructive fashion. Before …

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 …