Earnouts are used to bridge a valuation gap between a buyer and a seller. It’s a compromise, of sorts, to break a purchase-price deadlock when the seller wants more than the buyer is willing (or able) to pay. In an earnout, a portion of the purchase price is paid out… Read More »Earnouts: Breaking the M&A Deadlock
It is time to get started! Findings from Q3, 2019 Market Pulse Survey found that for Businesses that sold for less than $500,000, took an average of 6 months to while those that sold for more than $5M, took almost twice as long. It is important to note that having… Read More »Thinking of Selling Your Business this Year?
In Q3, final sale prices came in anywhere from 85% to 109% of the pre-set asking price or internal benchmark. Lower Middle Market companies in the $5M-$50M range achieved the highest values at 109% of benchmark. Businesses with values of $5 million or more typically do not have a published… Read More »Asking Price vs Actual Purchase Price
Special relationships that business owners have developed with customers and/or vendors can be a real issue when selling the business. A new owner may have a problem continuing that relationship and this could jeopardize the sale of the business. It is recommended that business owners begin delegating any special relationships… Read More »Tip #14 Special Relationships with Customers and/or Vendors Tip
It Depends. Findings from Q3, 2019 Market Pulse Survey found that for Businesses that sold for less than $500,000, it was a Buyer’s Market. For those that sold for more than $500,000, it was a Seller’s Market. However, looking at quarterly trends from the past 5 years, one sees that… Read More »Is it a Buyer’s or Seller’s Market for Selling a Business?
Findings from Q3, 2019 Market Pulse Survey and fairly consistent for the past several years, finds that almost ¾ (73.8%) of buyers who bought businesses for less than $500,000 lived within 20 miles of the purchased business. For those who bought businesses for more than $5M, three quarters (75%) lived… Read More »When It’s Time to Sell Your Business, How Close is Your Buyer?
Findings from Q3, 2019 Market Pulse Survey and fairly consistent for the past five plus years, identifies the likely buyer of businesses which sold during the prior quarter. Work with your Advisor to identify the likely purchase price and then target the most likely purchaser to increase the likelihood of… Read More »When It’s Time to Sell Your Business, Who is Likely to Buy It?
Reporting a lower inventory to their accountant is something many business owners have been doing for a long time. And many accountants just accept the number. In addition to the obvious concerns, when it comes to selling the business, big problems can arise. How will the inventory be valued in the Purchase Allocations? And… Read More »Tip #007 Understating Inventory
Business owners thinking about exiting their business may be hearing the terms “platform” and “add-on” acquisitions. Understanding these terms, and knowing which category you might belong to, can help you prepare your business for a competitive, higher-value sale. Private equity firms make up a sizable buyer category in today’s market.… Read More »Platform Businesses the Belle of the Ball
Your business is on the market and you’re looking forward to that glorious day when you can let go of the pressure and responsibilities of ownership. But don’t let those future plans distract you from what’s going on today. It’s critical that you keep running your business as usual. From… Read More »Can’t Stop, Won’t Stop