Determining whether it is a good time to sell your business is one of the most challenging decisions a business owner has to make. There are innumerable factors that affect this decision and it’s important to not get overwhelmed. A few things to take into account are financial situation, the company’s future/outlook, the opportunity cost of time, and the type of deal structure being pursued.READ MORE >>
For the last several years, the saying has been “There’s never been a better time to sell.” Multiples have been high. Buyers have been plentiful. Debt has been cheap. Optimism has run strong. The truth is, it is undeniably still a great time to sell; it’s never been better. But …
It takes time to sell and for the first time since emerging from the Great Recession, certainty about whether or not the later part of the new year will be a good time to sell- the best ever – is down. Anyone who says they can predict these markets is a fool. But the probability of a turn is certainly high and increasing as we begin this year.
The good news is that the signs indicate not an immediate downturn but rather one that can still be beaten to the finish line. Selling a business should take six months to a year. Thus anyone moving out now on a process should be able to take advantage of these good times – if they get started fast and, more than ever, move diligently and place a higher emphasis on certainty of close when selecting their winning bidder.
The change in the tea leaves really began in November and accelerated throughout December. Some of the key indicators include:
- In a December Duke University poll, almost half of responding U.S. CFO’s stated that they believed a recession was likely to occur in 2019. Even more compelling, more than 80% of those CFO’s felt recession would strike by the end of 2020.Right or wrong; the respondents to this poll are the key influencers of the amount of M&A activity generated by strategic buyers – and those most responsible for bad deals. If the economy does sour, or they simply believeit is going to sour, they will not be sticking their necks out for adventuresome acquisitions at record multiples.
- The public markets provide several signs. The first is the relative comparison of the large caps, to the midcaps, and then to the small caps. The M&A market for privately-held companies can essentially be seen as a microcap extension of the public markets. While we all know the public markets did not do well last year, what most have not commented upon is that in the last four months of the year, according to the Wall Street Journal, (2) large caps were down 5.5%, midcaps were down 8.6% and small caps are down 16.4% going into the last trading week of the year.We’ve not yet seen the extension of this extrapolated line into the private markets but one must wonder how long the trickle-down effect will take. Smaller companies tend to do well at the beginning of an upturn and larger cap companies do better at the end.
- Debt is becoming a more attractive alternative for investors. This will be problematic to the sellers of businesses for various reasons. Most obviously, M&A buyers are large consumers of debt. They use it to buy companies. If they must pay more for their debt, they have less money left in their accounts to offer sellers. Less obviously but probably more significantly, the historically abysmal returns debt has offered for much of the last decade have led many typical debt investors, including insurance companies and pension funds, to provide equity to private equity funds. Flush with this extra cash, PE funds have been on a buying spree which is commonly stated to be the driving force behind today’s frothy valuations. As those investors shift back to the more normalized bond markets, private equity will have less energy and vigor for aggressive bidding.
- The financial press seems to be of the mind that the artificial boost to strategic buyers provided by the recent tax cuts has run its course. Is this a fair assessment or simply “Trump-bashing”? We have no idea but we all know that in the markets, sentiment is often more important than reality. Perhaps the fact that 2018 saw increasingly attractive results for sellers was a result of those tax cuts carrying the bull market on around for one last lap. Again, we are not talking certainties here, just indications and probabilities.
- The strong dollar has dampened the ability of foreign buyers to compete in the US markets.With yet another class of buyers lowering their activity levels, it may not be long before the laws of supply and demand kick in and the equilibrium point on the old supply and demand curves shifts down and to the left.
- China has largely gone home. As 2018 proceeded, the Chinese government tightened its grip on the export of capital. In the last half of 2018, the US government began to make Chinese investors feel unwelcome as well. Numerous high-profile deals were killed in a very visible fashion as a result of regulatory interference on both sides of the Pacific. These included, most notably, the purchase of Recurrent Energy Developments operations by Shenzhen Energy in August and then Broadcom’s acquisition of Qualcomm. According to CNN Money, Chinese investment in the US fell by 92% between the first half of 2018 and the first half of 2017 – 92% - and has been declining steadily since the second half of 2016.Add to this the late 2018 US-China financial cold war and China’s slowly increasing realization that it has been splurging on debt that is now coming due and proving hard to pay down, and the spigot is now approaching the closed position.
- Forecasted growth of companies in the US public markets has taken a definite downturn. The S&P 500 saw collective growth of 7.3% in sales and 8.2% in profit year-over-year in the third quarter. The Wall Street Journal has been consistently predicting over the last three months that those same figures in a year will have fallen to 5.4% and 4.1% respectively.While the private markets are not the public markets, both are selling that intangible asset known as future cash flows and if buyers feel the big companies can’t continue to deliver outsized returns, they are likely to share at least some of that sentiment when it comes to the private markets.
- Divided government might bring an end to the pro-business approach demonstrated over the last two years. The people that matter state that decreased regulation, lower taxes, and a more tolerant enforcement environment have benefited their businesses and increased the prices they are willing to pay for companies. But a period of more compromise is now inevitable and the uncertainty of the 2020 elections will likely only grow and bring with it a sense of increased risk that will affect valuations.
- All good things must come to an end. We have enjoyed a ten-year bull market in M&A, both private and public. That qualifies as “long in the tooth” to be as polite as possible. It seems that 4% GDP growth is not sustainable. Unemployment can’t go any lower. Further tax decreases seem unlikely. The federal deficit and debt are growing. Interest rates are not likely to drop. Confidence and sentiment could not be higher than they were three months ago and are in fact a bit lower now than they were then.
The good news is that we’ve seen absolutely no indication that the market for private companies has yet been affected by these indications. Furthermore, changes in valuation, whether favorable or unfavorable, have not historically occurred rapidly. If there is to be a drop in multiples, it will be perhaps not gradual but at least measured. That said, the probability we now face is that we are more likely than before to look back from a spot twelve months in the future and say “I remember when it, was the best time to sell.”
M&A Activity has remained steady over the last year, but can the same be expected of the years to come? A closer review of the annual activity for 2018 indicates that the peak of the M&A cycle is slowly coming to a plateau. It’s time for business owners to reflect and decide whether riding out the next few years is truly worth it.
Here’s what we know about M&A activity and what we can predict based on current trends. Year over year, the total number of completed deals has been on a slow and steady decline from 2015 to 2018. In 2015, there was a total of 16,566 deals completed. Whereas, in 2018, there have been 10,734 deals completed so far. Although there has been an impressive total deal value of more than $800 billion completed in deals so far in the US for the 2018 cycle, that value is a decrease from previous years.
What business owners have to look forward to in the coming years is a bit of uncertainty, especially following the anticipated 2020 presidential elections. 2019 is expected to be another great year for M&A transactions, but it may very well be one of the last for this incredibly hot activity we have experienced recently.
Following the 2016 elections, there was a short pause in activity followed by a quick uptick and a wave of transactions. The 2018 midterm elections were an indication of the coming “blue tsunami” predicted in 2020, with the Democratic Party taking hold of the House of Representatives. A change in political leadership can unsettle the ship that so many have been sailing upon for the last four years. President Trump’s 2016 campaign was centered on economic surety, and that surety brought a wealth of support for M&A transactions to follow. Should a new leader be at the helm of the nation following elections, volatility in the market is certain.
In addition to an anticipated election, there is no denying that the successful economic swing that has taken place thus far has also had an effect on the current market standing. A fourth interest rate increase is anticipated before the end of 2018, and three additional hikes are estimated to take place in 2019. Buyers will be wearier of transaction decisions as interest rates increase. They will not want to pay high valuations as those seen in previous years because the purchase risk will increase as a result.
Now is the time for business owners to act before the market shifts from a sellers’ market to a buyers’ market. Steadily increasing interest rates will give more power to buyers in transaction negotiations. Business owners should keep this in mind before they decide to wait a few more years to put their exit plans in place.
Moreover, the market is predicted to become somewhat saturated over the next decade as more adults are coming to retirement age. Baby Boomers make up approximately 60% of privately-held businesses in the in the US, and this means the number of businesses on the market are going to increase a great deal.
As a result, valuations for businesses will likely decrease. Buyers will have many options at their disposal for their ventures, so they will have a higher competitive advantage against sellers. Sellers can take advantage of the current market and get ahead of the game now.
A transaction can take anywhere from one year to eighteen months to complete on average. Getting a business on the market sooner rather than later will give sellers the power to take advantage of lower interest rates and getting a deal locked in before the market is filled with a myriad of new businesses.
A sell-side mergers and acquisitions firm helps business owners derive the most value for their businesses in a sale. Benchmark International is a firm with decades of experience and a wealth of dedicated professionals who are looking out for our clients’ best interests in a transaction from start to finish. If you want to learn more about where the market is headed and what your options are, we can help you formulate an effective exit strategy now.
WE ARE READY WHEN YOU ARE.
Call Benchmark International today if you are interested in an exit or growth strategy or if you are interested in acquiring.
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkCorporate.com
Europe: Carl Settle at +44 (0)161 359 4400 / Settle@BenchmarkCorporate.com
Africa: Anthony McCardle at +2721 300 2055 / McCardle@BenchmarkCorporate.com
ABOUT BENCHMARK INTERNATIONAL
Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $5B across 30 industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 13 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.
So you’ve made the big decision – you’re going to sell your business. This is likely a stressful time for you as have probably spent a lot of time and resource building up the company and may be nervous about seeing it pass over to new hands. So, from here on in, you would like to minimise the amount of stress involved by avoiding any mistakes which can easily be averted. The following are common mistakes to avoid and how Benchmark International can help:
Only Pursuing the Largest Acquirer
Surely pursuing the largest acquirer is in your best interests as they will be able to afford a premium for the company?
While they may be able to pay a premium for the company, they may not necessarily do so. An acquirer is likely to pay a premium for your company because there are synergies in place such as similar markets, products or customers that could be combined, but a large acquirer typically does not need to make the acquisition to enter these markets. An acquisitive party could also benefit from economies of scale and, therefore, will pay more for the target, but a large acquirer is unlikely to benefit from this. Even if a large acquirer is willing to pay a premium, they may absorb operations into their own company, which can cause complications for the handover, particularly if you are loyal to existing staff.
How Benchmark International Can Help: Look at all aspects of the deal and how it can benefit your company. Benchmark International can assist with sourcing the best fit for your company.
Not Looking at the Bigger Picture
You’ve just received an offer from a potential acquirer – on the surface of it, it looks good, surpassing your expectations. However, the structure of the deal as a whole needs to be considered, not just the total value. For example, the consideration could be deferred, or contingent on future earnings, meaning you are not receiving all cash upon completion. It is also important that if you do decide on a structured deal, that these elements are protected, ensuring you receive the consideration.
How Benchmark International Can Help: Benchmark International will thoroughly analyse all offers received, negotiate earn-out protections and can assess any contingent targets to ensure that the seller is able to maximise the consideration received.
Not Creating Competitive Tension
It can certainly be a benefit to enter into the M&A process with potential acquirers in mind, perhaps one of these has even approached you at some point. However, even though it may be tempting to dive straight into a deal with an acquirer that wants you and complements your company perfectly, it is still vital to create competitive tension by generating interest from other potential acquirers. If the acquirer in mind can sense that they are the only one with an offer on the table and that you are anxious to sell to them, they could take advantage of this with a low offer.
How Benchmark International Can Help: Benchmark International will employ an approach where all potential acquirers are approached and exhausted before accepting any offers.
Using an M&A Sector Specialist
This may seem like an odd ‘mistake’ to make – why wouldn’t you want to use an M&A specialist operating specifically in your sector, surely you don’t want a generalist?
The reasoning behind this is that a general M&A firm will be able to think outside the box and target a large pool of acquirers, not limiting itself to those just in your sector.
How Benchmark International Can Help: Benchmark International has a vast and growing number of contacts giving you the best chances of receiving multiple offers, as well as significant experience across a broad number of sectors, leveraging this to identify the areas where the greatest synergies can be exploited.
Leaving it Too Long
To obtain the best price and right fit for your company, it is crucial to enter the market at the right time. It is important to strike a balance between seeking to sell when the company is on a growth curve, but also not missing the window of opportunity in the market cycle. Equally, it is important not to sell when you become desperate (e.g. you are looking at retiring soon) as acquirers could become aware of this and lower their offer accordingly.
How Benchmark International Can Help: Look at selling earlier than anticipated, not when you want an imminent exit. Benchmark International can best advise on when the right time is
Neglecting the Day-to-Day Running of the Business
M&A transactions can be time consuming, but it is important not to let it get in the way of running the business. If an acquirer is interested in the business because profits are increasing, or a new product is due to be released to the market, for example, and this does not come into fruition because you have taken your eye off the ball, then this could lead a buyer to renegotiate, or call the whole deal off.
How Benchmark International Can Help: The pressure of selling your business can be alleviated by Benchmark International as it will handle negotiations, leaving you to focus on running your company.
Not Negotiating Effectively at Critical Stages
Offers may go back and forth between yourself and the potential acquirer and at this point you are in a good position to negotiate. It is not until the Letter of Intent (LoI) is signed that the advantage swings to the buyer. Although the LoI is not typically legally binding it does usually stipulate a period where the seller cannot pursue further leads in the market (an exclusivity period), so competitive tension is lost. It is important, therefore, that you are completely happy with the terms (which can include such things as price, length of the exclusivity period etc.) before the LoI is signed to avoid either having to back out of a deal that could have been lucrative or being tied to a lengthy exclusivity period.
How Benchmark International Can Help: In all stages of negotiating, Benchmark International will do this on your behalf with your best interests in mind.
T: +44 (0) 1865 410 050
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The sale of a business owner’s business is a testing time and it requires the most talented teams in order to successfully consummate a transaction. As a business owner, it is very likely that you have already worked with legal representation that has assisted you through various legal processes such as the incorporation documents, customer/vendor contract negotiations, and other day to day and routine business transactions. So, you may ask yourself ‘Why not use the same business attorney that I have been using already?’ While you may have been using this attorney for your business needs, he or she may not have technical experience that is required for your long-term protection. Given that many deals require the involvement of a seller post-closing, an attorney must be highly specialized and experienced to ensure that you have the proper protections at the time of sale.
Having legal representation that specializes in M&A transactions is critical during the due diligence process. It is during the due diligence process that both the buyer and the seller’s teams begin formulating the definitive purchase agreement documents. When engaging an M&A attorney, it is important to understand the amount of experience the attorney has. M&A transactions tend to be much different than the aforementioned routine business dealings. A good indicator of an attorney’s experience is the amount of deals or transactions and attorney has worked on. The answer to this question will help a seller understand if this is a representative that can effectively represent him or her. The attorney’s legal team should not only be seasoned in M&A transactions but should also have expertise in specialty areas including but not limited to, tax, corporate finance, real estate, intellectual property, compensation and benefits, litigation, and employee matters. M&A transactions will involve complex deal structures, agreements and legal issues that are often argumentative and tasked to be completed quickly. Your lawyer must be a skilled advisor and negotiator that has the ability to work around imperative demands to keep the deal moving forward. Since each deal presents its own set of challenges, having representation that practices M&A transactions full-time is essential for being effective and time efficient when working with the opposing party.
Additional key components when considering legal representation for the sale of your business are the size and capacity of the firm. Like businesses, there are law firms of all sizes ranging from sole practices to firms with thousands of attorneys. In the lower-middle market, businesses typically range from $1million to $100 million in revenue. If you choose too large of a law firm, you run the risk of paying exuberant legal fees and your deal may not be a priority. If you choose too small of a firm, there is the concern of inadequate capacity and closing delays that can potentially break the deal apart. Choosing the firm that specializes in your deal size, geography and industry will ensure you have the right attention and expertise to achieve
a successful closing.
Our team at Benchmark International takes great consideration in ensuring our clients are backed by a strong and experienced team of advisors from accounting and wealth management to legal representation. If you would like assistance finding a specialist, Benchmark can arrange a no-cost, no-commitment meeting with experienced, specialized counselors appropriate to your budget, geography, and industry. These firms do not share fees with Benchmark, but in the past our clients have enjoyed tremendous success with each of the firms we would present.
Billy Van Buren
T: +1 (512) 861 3312
As an owner of a business, there are often times when the employees of the business can become like an extension of the owner’s family. Employees are often present during challenging times in the business owners professional and personal life and the owners of the business can often be a stabilizing presence in an employee’s life. One of the biggest concerns of a business owner is what the welfare of their employees will be upon a successful sale of the business. Often times, the concerns can be placed into four broad buckets,
1.) Will the employees be keeping their jobs?
2.) Will the employees be keeping their same level of compensation?
3.) How will the insurance benefits change, if at all?
4.) How will our company culture change – do we still have team building events planned every quarter and holiday bonuses we can count on?
The answers to these questions can go a long way in determining whether a buyer is the perfect fit for a business, outside of the fundamental valuation and transaction structure. Mergers and acquisitions are complicated endeavors, involving an incredible amount of work and attention to detail. While in the midst of an acquisition, HR Departments are the group tasked with managing perhaps the most valuable part of a company – the human capital. Granted, some aspects of the transaction are unavoidable, including the letting go of employees in an underperforming division or in a role that will be redundant within the acquirer’s organization. But, if both buyer and seller can get on the same page and formulate a plan for informing the employees of a change, this will ease the transition and mitigate the fear of the unknown.
Now, to address the first question that will come to an employee’s mind upon finding out their firm is being acquired – am I going to keep my job? In the vast majority of transactions, employees will retain their roles and often times an acquisition can be an opportunity for upward mobility within a larger organization. Timing will be of the utmost importance when it comes to making any type of announcement regarding an employee’s employment status, whether positive or negative. One hurdle to avoid at all costs is raising alarms unnecessarily. In order to avoid this complication, it’s best to announce a merger or acquisition upon execution of a Definitive Purchase Agreement and the transfer of funds. This ensures that the deal is closed and official and will eliminate the risk of pulling the rug out from under the employees of a recently acquired company.
When the topic of compensation arises, there are numerous factors at play, including the performance of both the buyer, seller and individual employee as well as the defined compensation structure that already exists within the buyer’s corporate infrastructure. Having a discussion regarding compensation can also take a different tone – perhaps a buyer can offer employees a more compelling work/life balance, an office space that offers the opportunity to exercise, eat healthy or be in a location that is convenient and offers easy access to post office hours entertainment. Being able to pitch potential employees on all of the value that a buyer offers aside from the number on their paycheck can help bridge any perceived gaps
Beyond the importance of staying employed and maintaining the current level of earnings, individual employees will also be concerned with their benefits package and whether the buyer offers a more compelling insurance package or one that could be considered a down grade. In any event, being completely transparent about the pros and cons of the new benefits package will be important in mitigating the fear associated with change. A buyer who makes themselves available to answer questions that are both qualitative and quantitative in nature will be able to ensure a smoother transition. This would include providing feedback mechanisms such as one-on-one interviews, focus groups and anonymous surveys. In most cases, there is not a need to turn everything upside down immediately – buyers should not expect for all the new employees to join their new health insurance plan immediately, buyers should also consider letting the new employees keep their old PTO until the end of the year, if a new employees has already reserved PTO, a buyer can still honor that time and garner a little morale.
Ultimately, communication will be key - giving employees an opportunity to feel seen and heard will give them the sense of feeling valued by their new employers. Additionally, this will bring a level of comfort to the seller that those individuals who helped them achieve success will continue to be taken care of and that the culture of a company that takes years to create will remain intact and continue to permeate throughout the new company.
T: +1 (512) 861 3309
Over 88% of business owners think their business will stay in the family. In fact, only about 30% of family-owned businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond. As baby boomers are heading for retirement, who is going to take over the businesses the boomers are looking to sell?
Today’s business owners are faced with multiple factors when deciding the right time to sell. The perfect time can be tricky to predict as several economic considerations need to be weighed. The majority of business owners begin this thought process when nearing retirement age, but is this too late? The most important considerations are current economic statistics, market conditions, and industry trends. These are good predictors of a sellers’ market and shows the types of buyers and private equity companies ready to invest. Buyers are looking for businesses in the growth and maturity stages of their business life cycles. During these stages, operational bottlenecks are becoming managed and demand, profits and lasting customer relationships have been built. Business owners sometimes have the tendency to postpone selling until operations and profits begin to decline. This is a costly mistake for any business owner wanting to maximize their company’s value.
Sellers should strive to put aside personal feelings anchoring their decision-making process when considering their exit strategy. When considering selling, business owners should focus their attention on asking is my business in a financial incline, is my staff in place able to succeed without me, do I have a diversified client structure, and are my capital expenditures under control?Business owners need to consider these objectives now and determine if a sale is the right decision. Economic environments quickly change and in order to achieve a premium sales price, a favorable market is the key. Currently, multiples are at a historic high with limited quality businesses available for sale. Baby boomers are holding on to their businesses and aren’t willing to sell until they have to.
This can be a hard-personal decision to make for owners who have built their companies from infancy. Owners are conflicted with their decision, asking did I do the right thing, did I maximize my company’s value, will my employees be taken care of, and what is next in my life.Before considering the sale of your business, define both the internal and external factors and remove any hidden traps that cloud your decision-making process and can result in missed opportunities. By having a written exit plan, an experienced team of advisors, and patience, business owners will realize the full value of their life’s work.
Here at Benchmark International, we understand the emotional and physical stress that accompanies the decision to sell. Our experienced advisors assist by providing an outside perspective to business owners and by identifying suitable conditions in the M&A sector. Our responsibility is to ensure our clients are presented with all the facts and strategies to move forward. Benchmark International values close relationships and ensures that our clients are fully prepared to make the right decision when the day comes.
T: +44 (0) 1865 410 050
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The dream of running your own business was once a thrill that filled you with excitement. Perhaps, it was the idea of being your own boss fueled the passion behind your drive, or the prospect of providing a new product to a targeted market. Whatever the case may be, you’ve made it to this point in time right now because something is different (hence, why you are reading this article).
Maybe business is great, you’ve reached a plateau or your company is in decline. Irrelevant of the situation you aren’t fired up about your company like you used to be and you no longer have the same passion for your company that used to be there or, in the worst case, you feel like it is killing you! Your dedication to your business seems to be affecting your personal life and your health, whether it be mental or physical, in a negative way. Going to work each day is getting tougher and tougher, a dreaded obligation, and you feel like your tank is running on empty.
When your personal life and your health are in decline, it’s probably time to explore your exit strategy options. The first step you need to take when you reach this point is to open up conversations with a sell-side mergers and acquisitions team who can help you determine what those options are. Starting the discussion now will allow you to have a better “diagnosis”, but here are some flags to look for if you aren’t sure if now is the time to contemplate an exit:
1) You’re spending too much time on back-office and administrative tasks– Most business owners who find themselves in this situation have driven their company to success and have a very nice company, having it from nothing at all. The reality is that owners do this as the primary visionary who pushes business development and sales. Truthfully, there is seldom an employee who can deliver the passion and expertise for your company than you can. Over time as a company grows, many owners fall prey to becoming employees themselves who are constantly focused on obligations such as managing people, processing payroll, dealing with HR issues, keeping up with regulations, etc. which confines them to an internal office desk job. If you are finding yourself in a this situation or similar, you aren’t the only one and there are many ways to revive your daily routine that a mergers and acquisitions team can share with you.
2) You feel like you’re “married” to your business and are contemplating a divorce – Starting a business that you expect to last for the long run is a commitment. You have to be prepared for ups and downs all along the way. As the saying goes, the only constant in life is change. As your business will change, so will your personal life, your priorities and your focus.It can be hard to take a step back from the business because it requires so much of your time and attention. You don’t want your business to fail, but you also don’t want your personal life to suffer at its expense. Having a family, or missing out on life’s small moments repeatedly, can make you reevaluate your priorities. If you find yourself being at the business more than at your home, it’s probably time to start the exit conversation and learn more about your options.
3) Your Business has Grown Substantially and You Can’t Keep Up with the Demand – This appears to be a good problem to have, but in reality, if you can’t keep up with your business, then the business is walking a thin line between failure and success. Likewise, you are probably coming to your maximum height of stress too. So, what do you do? Being able to understand that you don’t know what you don’t know is key to catapulting your business further into success. Any one person can only do so much. At some point, you need to assess how you can be of more value to your business. If your value lies in innovation and new ideas related to the service you provide or expanding your footprint, but you can’t produce your products or deliver your services fast enough, or if you aren’t spending enough time on innovation because you’re busy on making sure your current client pool is satisfied … you are losing money, and your business will decline. The business you have grown from the ground up deserves to reach its full potential and there are many paths there.
4) You Daydream About the Day When You Won’t Have to Work Anymore – Running your business has become a chore. You are constantly one foot in the door, even when you’re home. You’ve reached that point where it just feels like your life is your business, and retirement on white sandy beaches sounds more and more intriguing. Being a business owner isn’t a walk in the park, and you need a plan in place, so when those retirement dreams start flooding your mind, you can put your plan into motion.
If you have come to a point in your business where you feel like it is constant stress and you have no relief, then it’s probably time to sit down with a sell-side mergers and acquisitions specialist like Benchmark International and discuss your exit strategy options. There are a vastly more avenues you can explore that will relieve you from the status quo that will allow you to continue pursuing your personal and financial goals while ensuring the legacy of your company remains intact and that your employees will continue to be taken care of.READ MORE >>
Bringing a business to success is an emotional journey from start to finish. Years are spent making sacrifices and taking tough decisions. So, as you get closer to retirement age, choosing to sell your business can be a bittersweet step to take. You raised your business like a child, and you have grown attached to it. How do you begin to make the decision to sell it?
First and foremost, you need to know your reasons for selling. Perhaps, you started your own business, so you could take control of your life and call the shots. Maybe, it was to provide a better life for you or your family. If you are reaching retirement age, then you have probably made a full circle and came back to those initial reasons. Those same motivators can be the drivers behind your ultimate decision to develop a strategy so that you can exit your company.
You love your business, but you love your family too. Perhaps you feel it’s come time to refocus your time and energy on your personal life. That’s okay, and you have several options at your disposal. Balancing work life and home life can be a challenge. Don’t let your obligations to your business keep you from fulfilling your goals at home.
If the decision to sell is on the table, there are a few paths you can take. A partial sale of your business is one option. This option is intriguing if you aren’t sure if you are ready to leave your business entirely. Bringing in a strategic buyer for your business that can begin working alongside you and help your business grow to its full potential will give you more time for your personal goals, while still allowing you to stay involved in your business. You can take on a less rigorous role without having to step down completely.
Strategic buyers are looking for a synergistic partnership that will allow them to either expand their footprint within a particular market, or one that will give them the chance to break into a new industry. Your business will add value to a strategic buyer’s plans , so they will want to see success in your company. This means your incentives will be aligned and if your company isn’t successful, neither is theirs.
Another option is a sale with an eventual complete exit. A complete sale does not have to happen immediately. You can slowly transition out of your business over time. This is a good option if you want to retire and leave your business completely, but care about your employees and the legacy you’ve left behind after you are gone.
A buyer who buys your business out right is called a financial buyer. Your business is an investment, and this buyer will need to have a management team in place, most likely your management team. If you want to make sure your business is going to be okay without you, it’s a good idea to transition with the business, so your employees can get acclimated to the changes as well.
Also, if your employees see your commitment and support to transitioning through the changes with them, it will help alleviate doubts they might be having about the sale themselves. When you decide to leave the business you love, you want to make sure you are leaving it in the right hands, and you want to make sure the employees who helped you build it are in good hands as well.
One thing you definitely should not do is tackle a sale on your own. If you are vested in focusing on selling your business and neglect your daily responsibilities within the business itself, you can potentially harm your business because your focus has shifted. Successfully completing a sale takes a great deal of time and understanding of the mergers and acquisitions transaction process. Patience is a virtue, and selling your business will take a little time, but with the right team in place, you can get maximum value for your company.READ MORE >>
As a business owner, you sacrifice a great deal of time and hard work to bring your business to success. As the business grows, your workload does too. You start in the front driving innovation and sales, then you end up in the shadows working on daily operational tasks, often obligatory, just to keep things afloat. You know you’re needed to keep the business running, but you want to make sure it continues to operate efficiently if you aren’t around.READ MORE >>