Posted on October 31st, 2016
I recently came across a Warren Buffet quote that struck me: “If past history was all there was to the game, the richest people would be librarians.” Don’t I wish that were true. My mom was a teacher for 30 years, and she knew a lot about history.
When it comes to buying a business, past performance is important. As a buyer, you’ll typically look at the last three years of financials, with a particular focus on the trailing twelve months. But you can’t get so tied up in historical numbers that you forget to ask the right questions about future performance.
Posted on October 17th, 2016
Succession planning is a real buzzword right now. With the large number of Boomers set to retire, everyone is talking about how to help them make it happen. Unfortunately, many business owners are having these conversations far too late.
If business owners just did one thing, one thing that I believe would make their work more enjoyable and more profitable, it would be to set a succession plan from day one of starting or buying a company.
Posted on August 23rd, 2016
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.
Posted on August 18th, 2016
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.
Posted on August 17th, 2016
Most first-time business buyers start the acquisition process with an ‘I’ll know it when I see it’ strategy. Both individuals and existing business owners come to us with this approach.
It won’t surprise you to hear, however, that it’s not a good use of our time to engage in a sales scenario destined to go like this: “How about this business?” No. “How about this?” No. “This?” No, that’s not right either.
Posted on August 17th, 2016
Timing is everything when selling a business. Whether it be winning in sports, finding your spouse, starting a company and ultimately selling it, when you do something can be every bit as important as how you do it.
Posted on August 16th, 2016
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.
Posted on July 29th, 2016
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
Posted on July 12th, 2016
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 …
Posted on June 27th, 2016
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.