I receive a steady stream of calls from minority shareholders who are dealing with one or more of the many struggles inherent in such positions. I also talk regularly with people about the valuation, purchase and sale of minority interests. It’s a very important and...
The biggest barriers to business sale bliss are low or declining profit and revenue source concentration. After all, it's steady and dependable profit that drives value. Add consistent growth and buyers will line up at your door. But many slam-dunk deals are derailed by latent...
When pursuing a business purchase/acquisition, you want to push the costly and time-consuming tasks down the road, and shore up the major deal points as quickly as possible. As I have said for years, if the ship is going to sink, better now than later...
What is the one absolute, undisputed key to selling a business for maximum value? Multiple, high-quality buyers, worked simultaneously. Could it be anything else? Nope. Everyone instinctively knows this. Still, many try to find another way. Attempt to ply an alternative route to an optimal sale. There...
The biggest mistake buyers make is definitely overpayment. It can be heartbreaking. Just last week I talked to a former client we helped sell. He turned around and vastly overpaid for another business (he didn’t use my firm) and he’s really struggling right now....
It's tough to recover from paying too much for a business. And business failure can lead to personal financial failure, and shattered lives and families. Sure, bad timing or bad luck can kill even a good deal, but the goal is always to get in...
A business has a lot of moving parts – customers, products, location(s), vendors, employees, reputation, relationships, processes, competitors, legal status and history, tax status and history, systems, databases, websites, etc. If one wants to peer into the crystal ball of a business and see its...
An offer for purchase says almost nothing about the value of a business. Why? Because “value” (as in market value) is the price a buyer is willing AND ABLE to pay. An offer, by its very nature, cannot speak to ABILITY to pay. I see...
If one wishes to sell a business quietly, professionally and for absolute maximum, is an M&A advisor needed? If so, why? What does an M&A advisor do that might add value?...
Smart business sellers choose Acquisition Advisors because they want to sell their business quietly, professionally, and for absolute maximum....
The buyer of a business, having selected his minimum required rate of return, justifies purchase price of a "going concern" by the cash he expects the business to generate....
Question: My partner and I started our business 31 years ago. We share ownership 50-50. He'd like to retire and wants me to buy him out. We don't have a buy-sell agreement of any kind in place. How can we agree on price? And, if...
You decided two years ago you wanted to acquire a competitor. You've spent months talking to a host of different companies and have finally found the perfect acquisition. You know it makes sense, you'll be able to expand geographically and you'll be able...
Seller financing: Not only does seller financing help minimize the equity required, it provides ready and meaningful recourse in the event the seller breaches duties, obligation, representations or warranties. Try to get "right of offset." Assets, not stock: Buying stock is risky. A foolproof method...
When we estimate the value of a business, we are estimating the price at which it could be sold. Of course, buyers will only buy a business when it makes "financial sense" to do so. A purchase makes financial sense when the proposed price and...
Why might a person want to own a business? Buy a business? Certainly, the reasons are unique to each person. Motives range from the material (i.e., money, possessions) to the spiritual; may originate from within (i.e., reside within oneself) or outside us (i.e., be socially...
M&A Advisors typically represent owners of businesses valued in excess of $2 million. These businesses may be multi-unit retail establishments, dealers and franchisors, but are more often manufacturers, distributors or service businesses with regional, national or international clientele....