Finding the Right M&A Advisor

Finding the Right M&A Advisor

When it is time to sell your business, the standard mentality is the desire to maximize its value and get the biggest price tag. However, cutting costs by attempting to sell the business on your own could cost you thousands, if not millions of dollars, due to unforeseen expenses and lower valuations. There is no one out there who knows your company better than you but on the flip side, there is also no one who knows the mergers and acquisitions (M&A) transaction process better than a trusted M&A advisor. Here are some important criteria to keep in mind when choosing such an advisor.
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Preparing your business for sale

Preparing your business for sale

If you are a business owner, you’ve likely found yourself asking:

  1. Am I ready to sell?
  2. How much is my business worth?
  3. How do I prepare my business for a transition?

Each of these questions has likely been met with some uncertainty. The fact is, the decision to sell your business is always complex, as it’s often not only a financial decision, but an emotional one as well. Furthermore, if that decision is haste, and you’re looking to sell in the short-term, you may not be able to realize the full value for your business. It can take up to a few years to properly prepare to sell a business. However, proper preparation will help you attract more qualified buyers and substantiate the company’s value.
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Is Now the Right Time to Sell My Business?

Is Now the Right Time to Sell My Business?

It’s safe to say that many business owners have considered selling their business at one point or another. Regardless of what factors provoke these thoughts of selling, it is imperative that owners carefully consider timing in order to maximize value. How do business owners determine whether or not it is the right time to cash out?

This may come as a surprise to many business owners but right now is a great time to consider selling. In fact, if you are an entrepreneur with a well-run business, you should have no shortage of buyers.

A common valuation method is to use a multiple of Earnings Before Interest Tax Depreciation and Amortization (EBITDA). Valuation multiples have hit their highest point in Q1 of 2016 at 12.2 times EBITDA.

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Business Transitions – Negotiations

Business Transitions – Negotiations

How do you get to the negotiating table?

Before we go into what you can expect from the business transitions negotiations, let’s first review how we got to this point where we have a serious potential buyer sitting at the table with your advisor.
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Business Transitions – Best Practices

Business Transitions – Best Practices

Understand your own goals for the post transaction period

The goals of the seller post transaction are very important as they may dictate the terms of the deal. For example, some owners want to have a clean exit with no further involvement with the business, others will want to continue to be a part of the business (for a limited or indeterminate time)in some capacity. These motivators are important for your professional advisor to know before entering any negotiations.
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Business Transitions – Family Succession

The decision to transition the business within the family can be the best or the worst experience in the lives of all involved. Those that plan the transition with a long lead-time, attention to training of the next generation in technical and management skills, close attention to family dynamics and conflict resolution, clear communications and the use of skilled professional advisors have a good chance of making a family succession plan work.

Unfortunately, most family business owners leave the process until it is too late, base decisions on emotions, do not communicate, and let family conflicts influence decisions. These cases do not end in harmony and family cohesion.
What family members do not understand is that for a transition within a family to be successful, the owners (typically Mom and Dad) have to make decisions in their own best interests as well as in the interest of leaving the business in a strong position moving forward.
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What is a business transition?

In this first installment of 5 blog entries on business transitions we will look at the different types of transitions and the implications of each. This blog series will deal primarily with business to business transitions from the seller and the buyers’ perspective. Family succession and management buy-outs will be covered in a future blog in general terms in order to provide an overview of the scope of the issues that need to be dealt with beyond the financial transaction.

In the simplest terms, a business transition is an event or transaction that results in a change in the effective ownership of a business. How can the owner of a business put their company in the best position to influence the subsequent terms of the change of ownership?

Business transition transactions can be complex. It is important to have a thorough understanding of the key elements in a successful transition.
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