Resources
Guides, articles, and tools from DealCoach's M&A advisors.
The DealCoach Valuation Process: What to Expect From EOV & BAMA
Never been through a valuation before? This step-by-step guide explains what happens when you request an EOV or BAMA, what information you’ll provide, how we analyze your business, and what you’ll walk away with.
Estimate the Value of Your Business: EOV vs. BAMA Guide
Most owners track revenue and profit, but still guess what their business is worth. This guide explains how market value is actually determined, what drives multiples, and when an EOV (business valuation) or BAMA (valuation + benchmarking + action steps) is the smartest next move.
What Makes DealCoach Different: Business Valuation You Can Use
Owners typically choose between cheap automated valuation tools and expensive certified appraisals. This article explains where DealCoach fits, how our EOV and BAMA approach valuation differently, and why clarity beats guesswork when your business is your largest asset.
Don’t Guess What Your Business Is Worth: Get an EOV or a BAMA
Most business owners carry a number in their head about what their company is worth, but many have never tested it against the market. That’s risky, especially when an unsolicited offer shows up and you’re negotiating off the buyer’s number. This article explains why an independent Estimate of Value (EOV) gives you a clear value anchor today, and how a Business and Market Analysis (BAMA) helps you build a roadmap to increase value before you sell.
The Hidden Cost of "Yes": Why Every Unsolicited Offer Needs an Independent Valuation
Learn why accepting an unsolicited offer without an independent valuation could cost you millions. Discover how DealCoach's valuation services and Cornerstone's POMO™ process helped one company achieve a 97% premium over their initial offer.
When to Use SDE vs. EBITDA: A Guide for Business Owners
If you're thinking about selling your business, understanding how buyers will value it is critical. For businesses under $2M, buyers typically focus on Seller's Discretionary Earnings (SDE). For larger businesses, EBITDA takes center stage. This guide breaks down the data from Q2 2025 to show you exactly when each metric is used and what it means for your sale price.
Determining the Value of a Business
Valuing a business is a crucial aspect of understanding its worth in the market. There are various methods employed by analysts and investors to determine the value of a business, each with its own advantages and limitations. Below are a few commonly used methods:
Don’t Let Old Valuations Hurt Your Heirs
For business owners, buy-sell agreements are important tools for ensuring a smooth transition of ownership in cases such as death, disability, or retirement. These agreements set the terms for how an owner’s shares or interest in the company will be bought or sold—i.e., who has the right to buy and at what price.
How to avoid being surprised by your business valuation
A significant number of business owners do not know how much their business is worth. That can be a source of conflict in the face of unfortunate events such as a divorce or a partnership separation. But it can be even more painful when the business owner plans to retire, only to find out the business isn’t worth as much as they expected.
Supply Chain Issues Complicating M&A
Supply chain issues are a big concern for businesses right now. Forced shutdowns, crisis forecasting, labor issues, and logistics all played (or are still playing) a part in the current shortages. Business has not snapped back to normal.
Stay Bonuses Add Value When Selling a Business
A stay bonus provides an incentive for an employee to stay with the company during and after a sale. They’re designed to protect the company in times of change.
3 Ways to Avoid Costly M&A Delays and Deal Failure
Delays are one of the biggest problems contributing to deal failure. The longer the process drags on, the more likely it is that a) someone gets fed up and moves on or b) something big will happen, economically or geopolitically, that disrupts the deal.
How to sell your business to a competitor
When you’re ready to retire, or exit your business, you may think selling to a competitor is your only option. But competitors are seldom your best buyer. They’re rarely willing to pay top value because they’re already established in the market.
Address Employee Issues Before Selling
Labor issues are affecting the M&A market. For some business owners, it means decreased value because they can’t find people to maintain operations or replace the owner after a sale. But labor shortages are also sending buyers to market. When they can’t hire the talent they need to grow organically, they look to expand through acquisition instead – buying companies with fully staffed teams.
Why 75% of Businesses Won’t Sell
Tom West is considered by many to be the founder of modern day business brokerage. A few years ago, he calculated what percent of businesses on the market actually sell. For most small businesses, those with sales of $10 million or less, he figured fewer than 25% actually transition to a new owner. There are a lot of factors driving down success rates, but here are the five I hear about most often:
Employee Retention Matters Before Selling a Business
From 9/11 to the Great Recession to COVID-19 – after every hiccup in the world, buyers want to know how your business stood up against adversity. In 2015, buyers were still asking, “But how’d they do in 2009?” Today, buyers want to know how you’re getting through the global talent shortage.
Boomer Business Owners Should Watch M&A Cycles
Right now we’re in a strong seller’s market. Despite the economic uncertainty and turmoil in the world, mergers and acquisitions has not cooled down. It’s economics 101, supply and demand, and there are just more buyers than sellers on the market.
Revealing the Reasons Four Offers Varied by $16M
During the Cornerstone annual State of M&A Conference held in Green Bay, we organized our own local “shark tank” event. Four private equity (PE) firms were invited to review and submit an offer on a hypothetical company. One by one, they revealed their offers at the event and talked about how they arrived at that value.
Small business values up in 2021
Business values increased in 2021, despite ongoing challenges from the pandemic, talent shortages, and supply chain disruption. Deal activity continued at an intense pace, with advisors across the country reporting increases in both incoming deal flow and completed engagements.
How to buy a business in a seller’s market
If you want to buy a business in today’s market, this might be just the strategy you want to take. Identify your ideal targets, reach out, and plant a seed. It might pay off now, it might take years, but it’s a way to build opportunity for your business going forward.
M&A outlook for 2022: Fast and furious
Business valuations have hit record highs and deal teams are bracing for what is expected to be the largest M&A run most advisors have seen in their careers. Business confidence, buyer capital, seller burnout – it’s all combining to create a perfect storm of deal activity.
M&A in 2022: Is this the year to sell?
If you’re a business owner, you’ve probably had a rough couple of years – and the challenges aren’t over. While COVID-19 may be weakening its grip, talent shortages, supply chain issues, and inflation are still very much at play.
Tracking your business perks
Business owners take any number of perks from their business, from the standards like auto expenses, memberships, and insurance plans to extras like entertainment, vacations, or an additional family member on the books.
Supply chain issues complicating M&A
Supply chain issues are a big concern for businesses right now. Forced shutdowns, crisis forecasting, labor issues, and logistics all played (or are still playing) a part in the current shortages. Business has not snapped back to normal.
Buyers like big fish in small ponds
Some business owners worry that a niche will limit their opportunities and they’ll miss sales. But a niche can often be the key to growth. What’s more, it can increase your overall business value.
When selling your business is your succession plan
How old are your key employees? This is becoming one of the key issues buyers care about when acquiring a business. It’s not a case of agism – buyers would love for your senior employees to stay. It’s about risk and how soon the business’s pivotal people are going to retire.
Entrepreneurs really do think of business as their baby
What does it feel like to sell your company? Many business owners say it feels like giving a child up for adoption. As it turns out, that’s not just a metaphor. Research shows entrepreneurs really do think of their business as a kid.
Buyers’ top focus is employee team
Management team ranked number five on the buyer due diligence list. A good succession plan and backup support is still incredibly important to the saleability and value of your business, but it seems that the strength of your overall employee team is – at this moment in time – an even bigger priority.
Retention raises business value, especially now
In the latest IBBA and M&A Source Market Pulse Report, a quarterly survey of M&A advisors, employee issues topped the list of buyer due diligence concerns. Employees, specifically longevity, loyalty and work ethic, ranked ahead of other priorities like operations, revenue and customer concentration.
M&A’s dirty playbook
If you work in M&A, you can take a class on how to take advantage of people. It’s true. Buyers can go through mergers and acquisitions training, at some of the most prestigious universities, learning how to pay has little as possible for a family-owned business or privately held company.
Keep Widening Your Moat - Barriers to Entry - Buying a Business
When buying a business, one of the qualities buyers look for is barriers to entry. The harder it is for someone to get started in your business or take away your customers, the bigger the barrier.
Know the 3 types of business buyers and what motivates them
When selling your business, you may receive offers from three kinds of buyers: Individual, financial, and strategic. Here’s a look at the most common buyers and where their motivations lie.
Advantages of Buying an Existing Business vs Starting a New Business
Top reasons to consider buying an existing business: Existing cash flow Established customer base and market share Proven business model Brand identity Functioning infrastructure Trained employees and established vendors
6 Rules of Thumb for Business Valuation
Calculate the value of your business using these tips. There are many methods for business valuation but the goal is always to sell at the right price.
Economist suggests business owners sell by 2024
Economically speaking, COVID-19 was a “natural disaster.” That’s according to Brian Beaulieu, CEO and chief economist of ITR economics. Beaulieu spoke at the virtual State of M&A conference hosted by Cornerstone Business Services in February, helping business owners and advisors understand the market ahead.
Evaluating a Business for Sale - What to Ask the Owner
Learn the types of questions to ask when considering buying a business. They should be specific and give you a clear picture of what the business has to offer.
Selling business to your kids? Consider a private equity partnership
Years ago, when we were marketing a business for sale, we used to include a short note about why the business wasn’t transitioning to the owner’s kids. After all, if it’s such a great opportunity, why don’t the kids want it, right?
Biden tax plans could accelerate M&A
Any business owner contemplating an exit in the next few years should consider how potential tax changes could reduce their net proceeds from a sale. If Biden’s tax plans come to fruition, the capital gains tax rate could effectively double, from 20% to 39.6% for income exceeding $1 million
Valuing a Small Business – Determining Its Earning Potential
Learn more about what to look for in the financial documents when valuing a small business in order to determine its earning potential for you in the future!
SBA to Cover Six Months Payments on New Loans
As part of the Economic Aid Act that passed in December, the Small Business Administration will make borrowers’ payments for six months on new SBA 7(a) and 504 real estate and micro-loan programs.
What to Look for In Small Business Financial Documents
If you’re considering selling your small business, review these documents and information. Preparing solid financials will help determine a fair asking price.
M&A buyers may need to move quickly in 2021
One year ago, buyers were looking for talent. Every company we talked to was up against the same problem – there was so much opportunity to be had, but none of the employees to make it happen. It’s amazing how much can change in year.
Documents and Information Required for Selling a Business
If you’re considering selling your small business, review these documents and information. Preparing solid financials will help determine a fair asking price.
Congress Agrees on $900 Billion Coronavirus Relief Bill – What’s In It for Small Business
On December 27, 2020, the Consolidated Appropriations Act, 2021 (HR 133) was signed into law by President Trump. This $2.3 trillion spending bill combines a $1.4 trillion Omnibus appropriations bill for the 2021 fiscal year and $900 billion for COVID-19 relief in the United States
What is Your Business Worth?
Many small business owners fixate on the day-by-day tasks of their organizations, an amazing number don't have an exact comprehension of their business worth. That is because conventional business valuation requires the small business owners to contribute a lot of time, exertion, and are expensive. With high-cost business valuations, small business owners are in a tough position: choosing to put resources into a valuation or utilizing those assets for their everyday tasks. Confronted with that choice, most small business owners pick "not knowing."
CARES Act 2021 Extension Gives Boost to Business Buyers and Sellers
The CARES Act Debt Relief Program, which allows business buyers to take advantage of an SBA loan, has been extended under the Consolidated Appropriations Act signed into law by President Donald Trump on December 27, 2020. Keep reading to learn why this extension is great news for entrepreneurs looking to buy or sell a business.
PPP Loan Guidance to Lenders a Positive for Sellers, Buyers and Business Brokers. Effective Immediately.
New Paycheck Protection Program (PPP) loan guidance should provide relief to business owners currently selling, business buyers, and business brokers with prospective clients with a PPP loan.
Businesses Thriving During COVID-19 and Positioned for Growth as New Markets Emerge
The COVID-19 pandemic has rippled through the U.S. economy, with many non-essential businesses shut down. Yet, some businesses, those we rely on most, are still going strong, and many are thriving. The market has been disrupted and many businesses are uniquely positioned. With stay-at-home lifestyles and heightened safety precautions, consumer behavior has changed, leading to new opportunities.
Three Questions to Ask for Growth
As you plan for the next year, make sure you are honestly assessing what is possible in 2021. Ask trusted advisors, co-workers, and even friends these three questions: 1. What two things should I continue to do? 2. What two things should I start to do? 3. What two things should I stop doing?
The irony of rising business values
The M&A market does not usually respond well to times of uncertainty, such as election years. But in Q3 2020, in a time of uncertainty on top of uncertainty, we’re seeing record buyer interest.
M&A market marked by irony, paradox
The M&A market does not usually respond well to times of uncertainty. Buyers shows signs of hesitation during an election year, uncertain about the future of the economy or taxes. But in Q3 2020, in a time of uncertainty on top of uncertainty, we’re seeing record amounts of buyer interest.
Plan a 2021 Comeback with Acquisition
We just conducted an acquisition search for a company looking to grow in a particular Wisconsin metro area. We identified 125 targets that met the buyer’s criteria and reached out to the business owners to assess their interest in selling.
Learn More about the DealCoach Team
The primary reason that business transitions are not successful is due to unrealistic expectations. The estimate of value is intended to remedy that. By providing business owners and their advisors with accurate information on the value of their business, they can approach a transition more educated and confident the numbers are on their side. Learn more about us!
Lopsided Market Drives M&A Values in Pandemic
With all the upheaval in the world right now, you’d expect M&A deal value to take a dip. But recent market analysis shows that’s anything but the case.
Pros & Cons of Recapitalization
When we talk about recapitalization, we’re talking about a partial sale of a company that allows the owner to liquidate some of the value they have in their business. Typically, this involves selling a part of your equity (usually 70-80%) to a third-party, however some business owners do sell just a minority stake.
Buyers, Already Motivated, Fueled by SBA Incentives
SBA relief efforts are incentivizing buyers to move ahead with business acquisitions. Per the SBA website, “the SBA will pay six months of principal, interest, and any associated fees that borrowers owe for all current … as well as new 7(a), 504, and microloans disbursed prior to September 27, 2020.”
COVID-19 Is Now A Good Time To Sell Or Buy A Business?
Recently we have been getting a lot of questions asking if now is a good time to sell or buy a business and how would the business value be affected due to the coronavirus. A lot of businesses are Thriving during the COVID-19. Buyers will take advantage of the incentives offered by the SBA in addition to the already low-interest rates. We are seeing growth in business in the following industries. Click the Link to Find out more:
The 7 Stages of Selling Your Business
Ideally, you’ll start preparing for sale early in your business lifecycle. The more you know about what buyers want, and what you can expect from the market, the more options you’ll have to exit your business.
Selling Your Business to A Family Office
Business owners looking to sell their business, or attract an investment partner, may want to add family offices to their outreach strategy. These private family firms, established by high net worth families to manage their wealth, can offer unique advantages.
The Four P's of Selling A Business
Marketers will sometimes talk about the four p’s (product, placement, price, promotion) of selling. Known as the “marketing mix,” the emphasis a company puts in each area can have a direct impact on sales and profits.
Building Value Means Building Leaders
It’s the New Year, that time when many business owners make a fresh resolve to develop their business. For some, that means updating equipment and driving sales. But others will focus on something more personal and possibly more pivotal: developing their leaders.
What Does it Feel Like When You Sell
“Immense satisfaction tinged with loss.” That’s how one business owner described selling his business.
EBITDA and SDE and Multiple Explained
Often, clients sort of just find themselves in the M&A process and have trouble making sense of the overwhelming landscape of buying and selling a business. Today, we are going to attempt to clear up a set of commonly used acronyms you’ll see when valuing a business for sale. Those are EBITDA and SDE and Multiples.
Why a Business Valuation Matters
Why get a Business Valuation? If you are a business owner, one of the best things you can do for yourself is to understand the value of your business. A valuation helps shape your exit strategy, informs your financial planning, and can be critical to creating a contingency plan that adequately protects your family.
Why DealCoach Is Different
As you look at your options for business valuations, I want to share where we fit in and why we think DealCoach is best. There are cheaper services out there, but like anything, you get what you pay for. Many of the low cost valuation services you find online are computer-generated models only.
Business Owners Have a Value-Expectation Disconnect
If you’re a business owner, you know that at some point you will have to transition out of your business. The question is, will the business transition to new ownership or will you have to shut your doors?
9 Warning Signs Your Buyer Can't Close The Deal
The proof is in the pudding. It’s not over ‘til it’s over. Don’t count your chickens before they’ve hatched. Pick your cliché. Just because someone makes an offer to buy your business doesn’t mean they have the resources to get it done. 9 warning signs your buyer can’t follow through:
The Business of Selling Your Business
Twenty years ago, when I started out in M&A, I worked with small businesses. At that point, my biggest hurdle was convincing business owners they needed a business broker in the first place. I had to show people the value an outside advisor could bring to the table.
When Someone Asks. "Are You Selling?"
As you start the sale process, you may be holding more offsite meetings and fielding confidential phone calls. Even a subtle shift in activity can cause savvy employees to wonder what’s up. Be prepared to answer questions about who these advisors are that are touring your business and why you’re requesting additional information from your management team.
The DealCoach Process
The Estimate of Value (EOV) and Business and Market Analysis (BAMA) provides business owners with a realistic understanding of what the market would most likely bear for their company in today’s marketplace. Find out more about the Process!
How to Build Your Company’s Value
As you build your company’s strategic plan, consider not only how to drive growth, but also how to reap long-term financial rewards. Most of your personal wealth is likely tied to your business. This means that maximizing your business’s value ensures an optimal return on your investment, helping you meet your financial goals.
Business Owners are Operating without a Report Card
Imagine your kids going to school, kindergarten through high school, without ever receiving a report card. As a parent, how would you know when they needed additional help? If they were ready for a new challenge? Whether you should help them prep for college or consider alternative training? At the end of the day, it would be hard to make well-informed decisions. Your kids would go to school and put in the time every day, and you’d have no idea if they were doing D or A-level work.
Adding Value Beyond Revenues
There’s a difference between generating cash and building business value that someone will be willing to pay for. Here are a few ways to boost your future purchase price and increase your business valuation:
When You Can’t Fix Concentration Issues
As you build your business, pay attention to what a future buyer will want. They’re looking for well-diversified customer groups where the loss of one account won’t have a devastating impact. Do the hard work of diversifying, and you’ll increase your future business value.
DealCoach Helping You Estimate the Value of Your Business
DealCoach's Estimate of Value (EOV) provides owners with a realistic understanding of what the market would most likely bear for their company in today’s marketplace.
How Long Will It Take to Sell Your Business?
If you’re one of the several million baby boomers thinking about selling their company in the near future, you might be wondering how long the whole process will take and what to expect along the way. If you have a focused advisor who is working the deal, expect two months of initial prep, 30 to 120 days for marketing, one month for negotiations, and roughly 60-90 days to handle due diligence, financing, and legal. Here’s the process in more detail:
When Acquisition is the Better Way to Grow
We tend to gravitate toward what feels familiar. That’s why many business owners think about growth in terms of organic strategies like opening a satellite office or expanding capacity. M&A feels big and risky, like something only large companies do.
Will your business survive your death?
Most entrepreneurs are a rare breed, full of optimism and confidence. But that same optimism it takes to run a business is the same sense of faith and certainty that can make them feel invincible. Every economic downturn is the last, every prospect is the next big sale, and every good leader retires happily with their family. Unfortunately, none of us are invincible. And if you’re like many business owners, a significant portion of your wealth—and your family’s income after your death—is tied up in the business.
Frequently Asked Questions
Have questions on DealCoach, The Estimate of Value (EOV), or Business and Market Analysis (BAMA)? Find your answers here!
Sell Your Business in 8 or 9 Months, Plus
If you’re one of the several million baby boomers thinking about selling their company in the near future, you might be wondering how long the whole process will take and what to expect along the way. In a nutshell, if you have a focused advisor who is actually working the deal, expect two months of initial prep, 30 to 90 days for marketing, one month for negotiations, and roughly 60 days to handle due diligence, financing and legal. Here’s the process in more detail.
Investment Banker: What They Are & Why You Should Use One
Just like real estate brokers, investment bankers (IBs) bring buyers to sellers. IBs typically work on commission-based fee structure, incentivizing them to see the sale through to completion. They’re an invaluable tool to owners contemplating a sale. Here’s what you need to know about selecting the right investment banker for your needs.
Difficult Conversations
It’s not easy to have the tough conversations. But as business owners, we need the courage to confront problems, particularly when we see something that goes against our core values. Failing to address issue areas can lead to dysfunction, toxic work environments, and weakened business value.
6 M&A Communication Strategies
Growing companies constantly seek growth opportunities, whether by entering new markets or unveiling new products and services. Each opportunity demands thoughtful communication that helps stakeholders see the value of the transaction and supports the deal to a satisfying conclusion. The right communication strategy gives you control over the narrative, and can even increase the value of the deal. Follow these six best practices.
Make a Plan, Stan
Paul Simon says, “There must be 50 ways to leave your lover.” There may not be quite that many ways to leave your business, but these are some of the more common:
7 Due Diligence Fundamentals You Must Know
People buy, sell, and merge businesses for many reasons. No matter the motivation, due diligence is key to a successful sale. An M&A Advisor and DealCoach can help guide you through the process.
The Importance of Family Time in the Value of Your Business
With the summer months coming up, DealCoach & Cornerstone Business Services’ Scott Bushkie wrote a timely article for the Green Bay Press-Gazette highlighting the importance of time away and how that enhances the value of your business. Whether it’s a family trip to a cabin or a long weekend for a child’s soccer tournament – that time away gives your management team a chance build trust and help you move the business forward. There will be a learning curve, no doubt. But take those bumps in the road to learn and coach your team, and in the long run – when you’re transitioning out and are ready to exit – there will be more interest in your business.
5 Easy Strategies for Boosting the Value of Technology Prior to Sale
During mergers and acquisitions, apparently inconsequential technological issues can materially impact the ultimate value of the business. So how can you improve the value of your business by driving up the value of its technology? These five simple tips help you navigate the process, but they don’t address more complex issues, like technical debt, undiscovered software defects, or privacy and security risks. Those issues require a separate evaluation and strategy.
Reduce working capital to maximize value
Working capital is a measurement of operating liquidity, most of the time it is calculated as AR, inventory and prepaids minus AP and accruals. Lines of credit are most often excluded as well as cash, long term debt and notes payable. Because working capital is required to run a business, buyers typically require a certain amount of net working capital be left in the business to meet standard operating needs. Working capital is not typically used in calculating the initial offer price, although it is certainly a critical point of negotiation. But basically, the higher your net working capital, the less money you put in your pocket after a sale.
Consider Seller’s Role in Business, Transition
When buying a company, one key factor in your success is the transition that happens immediately afterwards. You need time with the previous owner to understand how and why they operated the business the way they did. And you need their support to transition customer relationships. As you think about negotiating for the seller’s time after a sale, think about their role in the business. Do they have a strong, empowered management team? Or did the seller operate the business from a place of tight, centralized control?
Don’t let the 5 dismal D’s hobble your business
No one likes to think about all the what-if scenarios in life. Most business owners have no plan for exiting their business at all, much less exiting in the face of conflict or tragedy. As you finalize your business goals for next year, make time to protect your business against the five dismal D’s.
Some Sellers Value Time Over Money – Buyer Negotiation
I see business owners approach the sale of their business with one of two mentalities. It’s either maximize my value, or just get me out at a fair price. There’s no right or wrong, but there are pros and cons to each approach. We’re working with one seller, a younger business owner, who wants to run through the whole process and do everything he can to get the most out of his company. I always say these sellers want to go to sleep at night knowing they didn’t leave any money on the table.
Business Owners Can’t Plan On Yesterday
When a business owner says it’s time to sell, one of the first questions I ask is, “What’s your timeframe? When do you want to be out?” And the answer I hear most often is, “Yesterday.” That is a problem. Most business owners underestimate the time it takes to sell and exit their business. It’s not like selling a house, and you don’t get to hand over the keys and walk away on closing day.
When It Comes To Business, Location Isn’t Everything
I just met with a business leader who’s starting to explore his options around selling part of his company. Based here in Northeast Wisconsin, this business is considered an industry leader, well within the top five in its market throughout the U.S. Because of the company’s size and success, finding a buyer won’t be the tough part. It’s finding the right fit and negotiating for the best terms that will add complexity.
Avoid The Show-off When Showing Business To A Buyer
When selling your business, one of your biggest hurdles will be that first management presentation or facility tour. This is the first time you’ll meet the buyer face-to-face in a room to talk. This can be as short as 1-2 hours or more often it is a four to six-hour
Messy Accounting Means Your Sale Is Numbered
That’s the challenge we’re tackling on three different client engagements right now. In each case, these businesses have a lot going for them. From market leadership, to innovation, to high-quality products, these organizations check a lot of the proverbial “quality business” boxes. The problem is that their financial reporting is …
Sellers Beat The 90-day Average With Preparation
By Scott Bushkie According to Q1 2016 Market Pulse survey I help coordinate through the IBBA and M&A Source, businesses in Main Street and the lower middle market are taking about nine months to close. New this survey, we asked how much time was taken up in due diligence, specifically what was the time frame from letter of intent to close? For the smallest deals with a value of less than $500,000, due diligence takes two months. In most other market sectors, due diligence averaged 90 days.
Know if Multiple is Apple or Orange
As the old saying goes, you can’t compare apples to oranges. I always think of that when business owners talk about the multiple they hope to receive when selling their business. Sometimes, a business owner hears someone got a multiple of 6x or 8x for their business. So of course they want the same results. But what they don’t know—what doesn’t get shared over a round of beers—is what that number was multiplied by.
A Good Time For Good Communication
Our team at is going through a leadership transformation class with Initiative One. And one of the things we’ve learned is the value of impeccable communication, internally and externally. We have to remember that most business sellers don’t know what they don’t know. We can’t take anything for granted because assumptions can lead to unpleasant surprises that stop us from getting to the closing table. Here’s what impeccable communication looks like when selling your business:
Two Out of Three Ain’t Bad
We’re doing our strategic planning and talking about our brand at Cornerstone . As our facilitator pointed out, there are three ways to compete as a business: price, quality, and service. Good companies compete on one. Great companies choose two. But you can’t do all three on a sustainable basis.
Seller Financing Benefits Both Sides of Transaction
If you’re considering selling your business, don’t expect to walk away with all cash at close. This isn’t like selling a house. Most deals involve some sort of alternative financing. You may be asked to accept an earn out, roll over a portion of equity, or (most commonly) provide seller financing. Even when the M&A market is strong and lenders are aggressively financing business acquisitions, seller financing is often still part of the deal structure. And when there’s a downturn or lenders tighten up, then seller financing is even more prevalent and important.
How to Work With Sellers After You Buy Their Company
When buying a company, one key factor in your success is the transition that happens immediately afterwards. You need time with the previous owner to understand how and why they operated the business the way they did. And you need their support to transition customer relationships.
Selling A Small Business That Isn’t So Small: An Interview With Scott Bushkie
If your business has $10 million in annual revenue, who do you turn to help sell your business? After all, you are still technically a small business but are worth more than many small business broker’s are used to handling. One place to turn is Cornerstone Business Services . The company specializes in selling companies with $2 million to $100 million in revenue or $500K to $10 million + in EBITDA. In 2015, the company was involved in 12 completed transactions.
Market Pulse Quarterly Report Shows 2015 Ended with Strong Sales of Businesses and Optimism is Growing for 2016
The Small Business Administration had a record year, distributing more than $23.6 billion in loans in FY 2015. There was also significant private capital and traditional lending for the Main Street market in 2015 as 71% of Market Pulse study respondents who closed deals under $2MM in value reported that the businesses utilized financing other than SBA funds. The SBA record year, coupled with the traditional lending, demonstrates how incredibly active the Main Street market was in 2015
Plan for a Transition Period
When a business owner says it’s time to sell, one of the first questions I ask is, “What’s your timeframe? When do you want to be out?” And the answer I hear most often is, “Yesterday.” That is a problem. Most business owners underestimate the time it takes to sell and exit their business. It’s not like selling a house, and you don’t get to hand over the keys and walk away on closing day.
Buy a Business or Start Your Own?
Over 17 years of selling businesses, I’ve talked with many individuals who dream of being their own boss. Some of them have fuzzy plans and little initiative. With others, you can tell it’s only a matter of “when,” not “if.” But even many committed future business owners are still not sure if buying makes the most sense rather than starting a business on their own. Of course, I’m biased and I think they should buy. But there are times when a startup is the better choice. Here are some pros and cons of both:
Set new goals to avoid seller’s remorse
Many of my clients have told me that selling a business is like giving a child up for adoption or sending their teenager to an out-of-state college. They know it’s the right thing to do, but they miss the daily involvement, the challenge, and the companionship. It’s the same thing with a business. At some point, it makes sense for you and the business to part ways. Maybe the company has outgrown you and needs new leadership to thrive. Or maybe your passion has started to wane, and you’re feeling like work has become a grind. Either way, you have two options.
Sell a Business | Trim Working Capital
Over the years, I’ve surprised any number of clients, looking to sell a business, by telling them that working capital most likely would be included in the price of their company. Many of them believed that they …
Sell a Business | Marketing Matters in Sale of Business
Most business owners understand what good quality marketing materials can do for their business. They hire high-priced talent and spend whatever they need to maximize sales. But when it comes time to sell their business—not a product
Harvest Time – Is it time to Sell My Small Business?
As I drove down to Dubuque, Iowa for a meeting last week, I couldn’t help but notice all the farmers harvesting their crops. It made me think about the sellers I’m working with right now and the current status of the M&A market.
DealCoach Winner of the 2012 Northeast Wisconsin Business Plan Contest
DealCoach.com is a scalable, web-based solution that will help small business owners grow, value, market and ultimately sell their business for less cost and quicker time frame than the current market/national averages. It will also help potential buyers increase the likelihood of purchasing a company and running it successfully.