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7 Quick Tips About Growing Your Business

1. Build the Right Team
Creating growth for your company is achieved by having certain goals, and meeting those goals starts with having the right team in place to get it done. Seek out self-starters and highly motivated people who are not afraid to pitch unique ideas or put in extra effort to make things happen. Positive attitudes are important—and contagious. When both your leadership and your staff share your goals and passion for the business, it increases your chances for growth.

2. Be Agile
You want your company to be able to adapt and change course quickly based on changes to the market. If you can extend your business model to meet current trends, you will find more opportunities for growth. The more flexible your business is, the faster you can test different approaches and ideas. Plus, you will be able to move on more quickly if something is not working.

3. Know the Data
The idea of analyzing data may sound boring, but data is knowledge and knowledge is power. Use a customer management system. Take a close look at both existing and potential customers to understand their behavior. How long does it take to convert customers? What causes them to leave? What do they love about you? What is getting their attention? What is your competition doing? The premise is quite simple: when you know what is working, you can do more of it. And you can stop wasting time and resources on what isn’t working.

4. Keep It Simple
It is proven that complexity hinders growth and performance in a business. Stay focused on what you do best and keep those processes streamlined for efficiency. If you are trying to do to many things, it makes it hard to be really good at any one thing. Coming up with ideas outside your area of expertise just to make a few extra bucks is more likely to cost you in the long run.

 

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5. Don’t Underestimate the Power of Marketing
You may have the most incredible product or service, but it doesn’t matter how great it is if people do not know about it. There are many great ideas out there that fail because of a lack of proper marketing support. And some ideas are mediocre but succeed thanks to effective marketing. Many make the mistake of viewing marketing as a nonessential expense. It is worth it to enlist the help of professionals, even if only on a small scale.

6. Continue to Improve
In an ever-changing world, you have to keep up with innovation to remain relevant. Challenge yourself and your team to constantly find ways to get better at every aspect of your business. Think about how you can improve customer relationships. Consider updating technologies to be more efficient. Look at processes to see how they can be done better. It doesn’t matter what it is…if you can do it better, then do it.

7. Form a Strategic Partnership
The right strategic partnership or merger can be a major game changer for the growth of your business because it can help you reach more customers quickly. It can also help to balance weaknesses and strengths. You should look for companies that are similar to your own, but can provide you with beneficial aspects that you may be lacking. Consulting an experienced mergers and acquisitions advisory firm can help you find the right businesses for you to consider.

Let’s Talk
At Benchmark International, our experienced team of analysts is ready to help you with effective strategies to grow your business or sell it for the highest value. Even if you’re not sure about selling at this time, starting the conversation can be beneficial to you in the long run.

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Force Majeure is Coming and if You’re Selling Your Business That is Bad

Force ma·jeure /ˌfôrs mäˈZHər/ (1) "superior force", (2) unforeseeable circumstances that prevent someone from fulfilling a contract.

Airlines are suspending flights and changing rules for refunding tickets. Cruise ships companies are in tailspins. Cargo ports are operating with reduced staff and reduced hours. Entire cities are being quarantined. The Coronavirus may or may not become a major global health issue. But the probability that the disease will have an impact on global business is far higher, if not approaching a certainty. This is safe to say not because there is a high probability that the virus will impact your company’s travel or suppliers or daily operations but rather because of the dreaded force majeure provision lurking in so many of your company’s contracts. These clauses are known as the “canary in the coal mine” when it comes to large-scale black-swan type macroeconomic downturns as parties typically rush to invoke them well in advance of any actual calamity striking. One of the unfortunate lessons from 9-11 was that lawyers are not shy about advising their clients to invoke the clause to escape performance obligations on unfavorable contracts. Of course, any contract that is unfavorable to them (whoever “them” is) is probably favorable to your business.

As a reminder, here is an example of a simple force majeure clause:

For this Agreement, an “Event of Force Majeure” means any circumstance not within the reasonable control of the Party affected, but only if and to the extent that (i) such circumstance, despite the exercise of reasonable diligence and the observance of Good Industry Practice, cannot be, or be caused to be, prevented, avoided or removed by such Party, and (ii) such circumstance materially and adversely affects the ability of the Party to perform its obligations under this Agreement, and such Party has taken all reasonable precautions, due care, and reasonable alternative measures to avoid the effect of such event on the Party’s ability to perform its obligations under this Agreement and to mitigate the consequences thereof.

The definitions commonly provide examples of the types of circumstances that qualify earthquakes, war, acts of God, change in laws, civil disorder, and even labor strikes. One aspect of the clause that allows it to be used well in advance of any actual natural event such as the arrival of an epidemic is that the definition commonly includes political acts as well as natural acts. As a result, the declaration of an area as one warranting extreme caution might qualify a government order to reduce the number of flights to an area or the number of visas it grants to people going or coming from an affected area (or quarantining travelers) might qualify.

Furthermore, it seems everyone has a global supply chain. So, any of these events happening “over there” might seem remote from your business. However, for anyone with a contract that wants to avoid the Butterfly Effect can be a siren song.

* * *

At this point, you are probably asking, “But surely people don’t write this term into their contract in a way that allows them to be abused, right?” Well, this clause is kind of an atom bomb. As one does when dealing with atom bombs, contracts are designed to prevent their use and mitigate their effects. The overarching check on the amazing power of the force majeure provision is that it only relieves the party’s performance while the circumstances remain in effect. It’s temporary. Parties won’t abuse it because it just gives them a short-term benefit and then they have to face the music.

So, in the ordinary course of your business, you have to deal with the fact that force majeure clauses may face lean times even when your local environment is perfectly normal. Parts may not be provided on time. Your call center might go dark. Your IT support may not be available. And anyone of your suppliers or customers may have the same problem. As an example, a company that collects fees for collecting, cleaning, and reissuing linens to other local businesses and uses an in-house local manufacturing facility in area with no odd circumstances occurring. Let’s say Miami at present (if there is such a company) may suddenly be hit with the clause because they service cruise ships and hotels or because their raw materials come from Egypt or parts of their detergent is manufactured in Germany from elements mined in the Philippines.

Businesses can survive a three-month or six-month calamity such as this in the ordinary course of their lifespan, so people don’t usually think twice about the wording of a force majeure clause. But your business is going up for sale. And when you go up for sale, everyone looks at your last 12 months' financial performance. The ­last thing you want is a hole that has to be explained. Even if your broker can come up with addbacks to create pro forma financials to show what “would have” happened absent the event of force majeure and how rosy that alternative reality would have been, it is better to not have to do this. More importantly, it points out weaknesses in your business. Buyer favorites include you are beholden to a single source of supply, you have too much customer concentration, your business lacks redundancies, your perfect line of decades of growth and healthy margins now appears more vulnerable than it did before. Whether they believe it or not buyers latch on to these things to justify their valuations and their lenders latch on to them to constrain the debt available to get the deal done (and thus impact purchase price).

We still find buyers asking to see clients’ financials from 2007-2010. Looking back more than five years is (or should I say “was”) unprecedented in M&A, much less looking back over a decade. But it is common at this point and we see little signs that that is ending. But that was the last force majeure type event most of our clients suffered and buyers want to see how the businesses weathered it…And they aren’t asking in hopes of finding some reason to raise the value of their offers.

All the better to have the next event of force majeure occur after your sale rather than before.

Author
Clinton Johnston
Managing Partner
Benchmark International

T: +1 813 898 2350
E: Johnston@benchmarkintl.com

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Key Steps For Successful Post-Merger Reorganization

Reorganization is an important part of a merger or acquisition integration process and should be done properly to ensure a shared vision and a smooth transition in the desired timeframe. Unfortunately, research shows that it is not uncommon for this process to take longer than expected because the integration plan was not appropriately focused on the culture, the people, the leadership, and the ultimate goals. Business leaders that employ a solid integration strategy during M&A are more likely to achieve their desired outcomes.

According to research:

  • A mere 16% of merger reorganizations fulfill their objectives in the planned time
  • 41% take longer than expected
  • In 10% of cases, the reorganization harms the newly-formed business

Create a Profit and Loss Statement

First, think about the benefits, costs, and timing of the reorganization. Costs will include employees, advisors, and consultants, but costs will also be incurred in the form of disruption to the business. The last thing you want is for the company’s performance to suffer and for key staff to leave. Setting detailed business targets for reorganization based on the length of the transaction process and its impacts can make a significant difference in the productivity and growth of the company.

Know Your Strengths and Weaknesses

The due diligence process of an M&A deal will reveal a great deal about the business’s strengths and weaknesses, but it is important to make sure no stone goes unturned. You can get a more complete picture by talking to current and former employees, and simply searching the Internet for third party research to see what anyone would read about you when looking up your company. Both internal and external perspectives are important. Armed with these insights, you can then create a plan regarding which areas need your focus based on whether it is a merger or a full buyout. In the case of a merger, both sides will need to have the same informed view of strengths and weaknesses in order to address any issues, streamline the process, reduce costs if necessary, and essentially improve performance.

 

Ready to explore your exit and growth options?

 

Create a Reorganization Team

Designate a team of representatives from various levels of management and departments to handle communication and ensure that the needs of each department are heard throughout the transition. This will help employees feel included, minimizing the risk of losing key talent. It will also help you avoid overlooking key details, will help to keep the process more orderly, and will help you address any issues quickly.

Evaluate Your Options

When creating a reorganization plan, consider all of the possibilities within both companies’ methodologies. Any solution is going to have pros and cons, so you will need to assess which alternative is best for your business and achieving your vision. In order to create synergy, you will need to examine both of the organizations’ structures, business processes, management, staff, culture, capabilities, technology, safety processes, and anything else that makes the day-to-day operations run. In a merger, you are ultimately faced with creating a shared culture, and this means ensuring that every aspect of the business is aligned to make this possible. People are people, and if they are not informed of a clear plan and their role in it, it is nearly guaranteed that it will lead to confusion. Figure out the best way to allocate tasks and processes by communicating with the new leadership team about all of the possible options and determining the best structure together.

Get the Previous Steps Right

You have worked so hard to build your business. Reorganization is complicated and you owe it to yourself, your stakeholders, and your staff to get the process right. Of course, you should anticipate hurdles to crop up along the way. Sometimes in M&A deals, certain information does not become available until late in the process. Nearing the end of a deal, you should reassess all the previous steps outlined above to verify that they are solid and decide if anything needs to be modified. This does not mean you need to turn everything on its head if you uncover an issue. By encouraging leadership to inform you of any snags in the new company and addressing them quickly, you can get ahead of major problems.

Enlist an M&A Expert

Please contact our world-class team at Benchmark International to discuss how the right merger or acquisition could benefit your business.

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The Value Of An M&A Advisory Firm

When selling a lower to middle-market company, enlisting the guidance of an experienced mergers and acquisitions advisory firm can make a world of difference in the transaction’s outcome for several important reasons.

  • Having an M&A advisory firm act as an intermediary in a transaction increases the chances that a deal will be closed successfully. In fact, some buyers are willing to pay more for a business when an M&A firm is involved because they know there is a higher chance of closing.

According to a large study by the University of Alabama, private sellers receive between 6% and 25% higher acquisition premiums when they retain M&A advisors.

  • When you work with an M&A firm, it demonstrates to buyers that you are truly committed to the sale process and that your valuation expectations have been properly vetted. 
  • Having an M&A team in your corner will save you a great deal of time and effort regarding complicated tasks such as due diligence, company valuation, and data management. Even simple transactions require a burdensome amount of due diligence regarding real estate, software, employment, benefits, accounting and legal issues. There are also many standard pre-closing tasks that must be completed in a timely manner and can affect the success of a transaction.
  • M&A experts already know all the possible deal breakers and how to avoid them, giving you a major advantage in the market and protecting you from pitfalls.

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  • You will attract a greater number of serious buyers because you have access to the M&A firm’s global connections. And when you have drawn the interest of several buyers, you are more likely to get more for your company. If you sell your business on your own, experienced buyers know they can get away with offering you a lower price.
  • A truly effective M&A firm will use proprietary technologies and databases to review the market for matches regarding the size, industry and geography of your company.
  • Experienced M&A advisors know how to protect your confidentiality through the entire process. Confidentiality is critical because if information is leaked, it can not only derail a sale but also have a negative effect on crafting another potential deal.
  • A quality M&A team will have the capability to build a strong marketing strategy and create materials to attract suitable and quality acquirers for your company.
  • Another important task that an M&A firm will handle is third-party research. Buyers will immediately seek out negative information on a company that is on the market. A good M&A team will create a strategy to mitigate any potential negative impacts.
  • The right M&A advisory firm will take the time to fully understand your objectives and aspirations and will be committed to making sure that the process is tailored to your needs and that you find the right fit. They will also work to keep eager buyers at arm’s length when you need more time to make decisions, understanding that selling your company is an emotional task and you deserve support and empathy along the way.

Work With the Best

Reach out to our world-renowned M&A experts at Benchmark International to discuss how we can help your business achieve its ultimate sale potential. You can trust that our objectives are aligned with yours, and that we will provide you with the most amount of information possible while protecting you from making rushed decisions. Simply put, your best interests are our best interests.

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Why You Should Spend More Time Thinking About Selling Your Company

Selling your company might be the farthest thing from your mind right now. But there are several reasons that thinking about selling now can make all the difference later, especially for lower and middle-market business owners. Proper exit planning can take years, so getting started increases your chances of selling for maximum value. It also puts you on the right track to fulfilling your aspirations and realizing your vision for the future.

1. Start Making Your Business More Valuable

Whether you want to sell this year or five years from now, you will need to take every step necessary to drive up your company valuation prior to a sale. An endeavor this important is not going to be accomplished overnight. Consider what you can do to improve the business and make it more attractive to buyers. Implement a well-defined strategy to create growth and improve profitability. Hone your marketing plan. Think about how you can make the company more efficient. An experienced M&A advisor can help you craft the right tactics to accomplish all of these goals and get your exit plan moving in the right direction.     

2. Know Your Number

Part of a smart exit plan includes knowing what your business is actually worth and at what price you will be comfortable selling it. This means you will need to know how your company stacks up in the current market in your industry and what the market conditions are expected to be in the next several years based on expert M&A knowledge and analysis.

3. Know Your Buyer

Not all buyers are the same. They can be financial, strategic, or even internal. If you take the time to figure out the right kind of investor for your company, you can spend your time and energy taking the steps to maximize the business’s value based on that type of buyer. For a financial buyer, you will need to focus on cash flow, revenues, and management. For a strategic buyer, you will want to concentrate on profits, innovation, market share, and brand strength. Finally, an internal buyer will look for things such as strong financials and balance sheets, a positive culture, and product diversity. An experienced M&A advisory firm can help you identify the right buyer for you, and give you exclusive access to prospective buyers that you will not find on your own.

 

Ready to explore your exit and growth options?

 

4. Get Your Records in Order

When the time comes to put your company on the market, you are going to need to have all of the proper documentation organized and accounted for. This includes all of the financial documentation, tax records, profit and loss statements, legal contracts and client records from the past few years. Buyers tend to place more value on businesses that can provide comprehensive records that paint the most accurate picture of the company’s health and future potential. You will want to be honest in this process. Do not try to fudge the numbers or hide issues. The buyer’s due diligence team is going to uncover anything that you attempt to cover up, which can lower the purchase price. Disclose the truth from the beginning and you’ll be in a better position to overcome any challenges, plus, the buyer will be more confident in acquiring your business.  

5. Keep Your Eye on the Business

Running a company is already a massive responsibility, and the process of selling a company is a significant undertaking all of its own. You need to remain focused on your daily operations without being so distracted by a sale that it has a negative impact on the business. Enlisting the help of M&A deal professionals to handle the sale can take the pressure off of you and keep your business on course. Remember, the process can take several years, and that is quite a bit of time for you to be unnecessarily preoccupied, putting the health of your company at stake. 

6. Have a Plan

You have worked so hard to build your business and you have earned the right to dream about your future. To get there, you have to ask yourself the right questions. Are you ready to retire? What is your target retirement age? Do you want to purchase or get involved with another business? What level of lifestyle will you need to maintain? Will someone in your family be taking the reins? Do you want to retain a small level of involvement? If you know what you expect from your future, you will be less likely to get cold feet at selling time. It’s also important that you appear confident about a sale so that buyers do not feel that you cannot be taken seriously. Knowing your vision for the future is a critical step in making your dreams a reality. As Warren Buffet once said, “Someone is sitting in the shade today because someone planted a tree a long time ago.”

Let’s Discuss Your Options

If you are thinking about selling your company, now is the time to start considering your options regarding timing, exit planning, and market value. Contact our M&A geniuses and let Benchmark International help you map out a future that is in the best interest of you, your family, and your company.

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Tips For Transitioning A Company's Leadership

One of the keys to creating value in lower to middle market mergers and acquisitions is the plan for successfully transitioning the leadership of the company. Maximizing value hinges largely upon a solid succession plan that empowers the new CEO to take the reigns, maintain stability, and lead the business into the future.

Finding the right person to assume leadership is important to the company in several capacities, but there are reasons that it will be personal to you as a business owner who cares greatly about the company you have worked so hard to build. The new CEO should actually care about the company and its employees. They should have a proven track record at getting things accomplished versus a history of being asleep at the wheel. And they should leave you with a high degree of confidence that they are going to do the right thing so that you are not left worrying about the fate of the company and whether you made the right call.

As a founding CEO planning your exit, there are some best practices you can follow in your process to find the right candidate and make a seamless transition in leadership and avoid a succession gone wrong.

Consider Structure and Timing
Initially, there are three important factors to determine the circumstances for the incoming CEO. Are they from inside or outside the company? Will they assume the role immediately or work alongside you for a period of time? And will you maintain a presence in the company as chairman or as an advisor? The answers to these questions will affect the transition process.

Get an Executive Search Expert
Do not underestimate the importance of enlisting the help of a quality external executive search professional. They should have proven experience that gives you the confidence that they will identify a replacement that's in the best interest of the company. They should be able to provide certain insights, find candidates that may not be currently known in the market, and prevent the costs associated with the wrong hire. An executive search firm can also save you time, take the burden off of your HR team, and ensure confidentiality through the process.

 

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Consider What They Face
Think about the new CEO's first year and what it may hold from a political and cultural perspective, such as a recession. Could there be problematic circumstances that will make it difficult to make leadership decisions and are they equipped to handle them adeptly based on their experience?

Meet Face-to-Face Onsite
An important part of building trust and bolstering success is having the candidate come to the company's headquarters to meet with you and get an in-person understanding of the business and its culture from your perspective and in your own words.

Foster Relationships
The vetting process can benefit from the candidate's development of relationships with the management team to enable shared experiences. A quality candidate is going to value this effort in establishing trust.

If the new CEO is someone from within the company, think about how they will assume their new role and the responsibilities that come with it. Consider the fact that they are now going to be the leader among their former peers. How will they handle this change and how will it impact their relationships?

Look for the Obvious
You surely want a new CEO with whom you have a good relationship, but the most important relationship will be between them and the management team and the employees. So their personality is going to be a big factor in their ability to succeed. How are they under pressure? What is their vision for the future? Are they comfortable with change? Are they motivated to create growth? Are their values aligned with yours? What about their ego? A candidate may look exceptional on paper and have incredible qualifications, but if he or she does not possess the right people skills for your company's culture, it should be a deal breaker.

Are You Planning Your Exit?
If you think it's time to make a move in the best interest of your company, feel free to reach out to our M&A experts at Benchmark International at any time. Our impressive strategies can be the game-changer you are seeking for your future success.

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Benchmark International Successfully Facilitated the Transaction Between Technology Navigators LP and Re-Sourcing Holdings

Benchmark International has successfully facilitated the transaction of Technology Navigators LP and Re-Sourcing Holdings. Technology Navigators LP, is a technical staffing firm that concentrates on recruiting individuals for contract, project, and permanent placement. 

Re-Sourcing Holdings (Re-Sourcing) is a leading provider of strategic staffing, consulting, and direct hire solutions, focusing on Compliance, Legal, Information Technology, Finance & Accounting, and HR positions. The company serves clients through five premium brands: JW Michaels & Co., Compliance Risk Concepts, ExecuSource, Perennial Resources International, and Partnership Employment with Technology Navigators now becoming the sixth brand. Founded in 2003, the company is headquartered in New York City with 15 offices in nine markets. Re-Sourcing’s differentiated operating partner model has enabled a strong focus on building direct relationships with clients to bolster retention and deepen understanding of client needs.

In reference to the transaction, Robert Taylor, Partner of Technology Navigators LP, explained his experience with Benchmark International, “We could not have completed the deal without Benchmark International.  Their team was attentive from day one and made sure that all our questions were answered throughout the entire process. The process of finding the right partner and making a deal is like a rollercoaster moving at 100 mph but Benchmark International knew how to navigate the obstacles we encountered and helped us get the deal across the line.”

Ready to explore your exit and growth options?

Allen Goldsmith, a Partner of Technology Navigators LP, mentioned that “Benchmark’s knowledge of the domestic and international markets was key to finding the right buyer that understood our unique business culture.  Benchmark International was there every step of the way and truly got to know how our business operated.  In short, they truly partnered with us to ensure we received the best deal the market could offer.”

Luis Vinals, Transaction Director at Benchmark International added, “Technology Navigators is a great example of how attractive the market has become for B2B services.  Our clients, Robert and Allen were engaged throughout the entire process and fully understood our suggestions.  They were receptive and willing to go the extra mile alongside us to ensure that their deal got done.  All in all, Robert and Allen’s collaboration enabled our team to find the right partner for the future of Technology Navigators.”

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Why 2020 Is The Right Time To Transition A Business

When determining the best time to sell or exit a company, unfortunately nobody has a crystal ball. However, there are several circumstances that should be considered, from fundamental business positions to external influential factors.

The state of the M&A market is among the most significant factors in a decision to sell a business. The market held steady from 2015 to 2017, and optimism skyrocketed in 2018. In 2019, the market dipped slightly but remained strong in deal volume and value, with a wave of multi-billion-dollar megadeals being completed.

While some expect a modest drop in global M&A value in 2020 due to what is perceived as inevitable economic correction after a lengthy, seemingly unstoppable up-cycle, many experts predict that little change is expected due to sustained economic growth, low unemployment, low inflation, high consumer confidence, and strong corporate earnings. Companies still have a need to diversify their portfolios, acquire talent, and innovate technologies in order to stay competitive—all needs that are best addressed through M&A. Also, plenty of capital is available and private equity has amassed the dry powder that can drive larger deals, even in the event of an economic downturn.

Additionally, there is potential for more aggressive M&A strategies earlier in the year to get ahead of a potential downturn and downgrade in valuations. Companies that have proven to perform well during times of recession may be especially appealing targets.

The 2020 U.S. Election

Regarding a potential downturn, one of the major factors that play into the state of this year’s M&A market is the upcoming November 2020 presidential election in the United States and the issue of impeachment of the current president. History indicates that economies typically perform well in election years. However, as uncertainty looms contingent upon the results of the election when it comes to topics such as trade and regulation, acquirers may become hesitant and the M&A market could lose momentum leading up to November, with the market remaining slow in the months following, depending on the election results.

Another matter affected by the election results is capital gains taxes, which is a matter of concern if you are selling a company because how much profit you yield from the sale will be taxable. Some presidential candidates are proposing higher taxation of the highest-income taxpayers’ accrued wealth and income, and this includes capital gains. Most candidates’ plans would tax capital gains at ordinary income rates, with just the very top marginal tax rates varying at incomes of more than $488,850.

The closer the election nears, the more every single day counts. If you hope to sell, the sooner you initiate the process, the better, as most M&A deals take several months.

Ready to explore your exit and growth options?

Brexit

As of January 31, 2020, the United Kingdom is officially no longer part of the European Union, but a second round of negotiations will continue with the goal of reaching a deal by the end of 2020. With lessened political uncertainty now that an initial Brexit deal has been made, there is heightened confidence in deal-making activity. The inability to make a second deal by the end of the year will mean higher costs and barriers to trade.

The Brexit situation is affecting changes to M&A strategies. M&A could be used to secure an operational presence in the EU to maintain access to European markets. M&A could also facilitate access to markets outside the EU. Additionally, some companies could be facing new pressures that can directly impact share prices.  

The Boomer Retirement Wave

While it seems as though we have been talking about it for years, the Baby Boomer generation remains a factor in 2020.

According To Pew Research Center population data, 10,000 Baby Boomers will turn 65 on each day of this year.

In the U.S. alone, Baby Boomers own 2.34 million small businesses, and employ more than 25 million people. This aging ownership pool points to a flood of M&A activity in the lower and middle markets this year, especially in certain sectors such as those that offer professional services.

As this population retires, there will be an increased need for consolidation, succession planning, and exit planning. If Boomers do not properly plan for these scenarios, it could result in an economic crisis that in turn affects millions of jobs. Also, most of these business owners have the majority of their net worth tied up in their company. This means that if the company should lose value, so does the owner’s ability to retire.

The unfortunate reality is that the majority (75%) of owners of small to mid-sized businesses choose to procrastinate and do not have a plan in place. If you are a part of this generation, you should most certainly already have your plans for the future underway. Even if you are not a Boomer and are considering selling, this is the time to get ahead of the massive wave of businesses that are expected to hit the market this year.    

Are You Ready to Sell?

If you are considering selling your business, we encourage you to enlist the expert M&A guidance of Benchmark International’s team to create your growth strategy, exit strategy, or company sale for maximum value. The time to start planning is now.

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Benchmark International Facilitated the Transaction Between Catastrophe Cleaning & Restoration Co, Inc. and Interstate Restoration

Catastrophe Cleaning & Restoration Co, Inc. (“CATCO”) has been acquired by Interstate Restoration. CATCO is a 50-person company that has operated for over 35 years providing highly-skilled restoration and remediation expertise to residential, commercial, public, and industrial customers.

Former owner Michael Hammack will continue as President as he helps transition the firm.

Michael Hammack, President of CATCO commented, “Benchmark International and Robert West were very professional, knowledgeable, extraordinarily helpful, and extremely encouraging during the sales process.  Robert and his team ran a focused and competitive process resulting in a great cultural fit and financial outcome.  CATCO looks forward to many years of success under the ownership of FirstService | Interstate Restoration.”

Ready to explore your exit and growth options?

Interstate Restoration is an emergency response and general restoration contractor founded in 1998.  With more than 50 locations spread across the US and Canada, they have a proven record of providing rapid disaster response in every corner of North America. Interstate is a subsidiary of FirstService Corporation (NASDAQ: FSV), a Canadian public property services company generating over $2B in annual revenue.

Tyrus O'Neill, Managing Partner at Benchmark International stated, “This was one of the more rewarding client relationships I have had the opportunity to build over my time with Benchmark International.  Our team being intimately involved with Michael and his company through marketing, deal negotiation, and financial due diligence afforded us the opportunity to stitch together a deal that made tremendous sense for the client in both a cultural and financial context.  He was able to monetize the great business he has built while also handing the keys over to an organization in Interstate that will genuinely carry on the legacy of CATCO as it continues to grow its presence.” 

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2020 Global IT Industry Outlook

The global Information Technology industry encompasses the sectors of hardware, software and services, telecom, and emerging tech including ‘as-a-service’ solutions under the umbrella of the Internet of Things (IoT) and automating technologies.

 The global IT industry is projected to reach $5.2 trillion in 2020, with global spending growing 3.7%

As the world continues to be more digitally connected and industries become more automated, technology will remain a massively growing market in the beginning of the new decade, especially as companies focus less on cost reduction and more on innovation.

The United States is the world’s largest tech market, accounting for one-third of the total market, and exceeding the gross domestic product of most other industries. Although the US market is so large, the lion’s share of tech spending actually happens outside of the US (68%) and is made by enterprise or government entities. Western Europe is a major contributor in the global tech market, and China is also a significant player with focuses in robotics, infrastructure, software, and services.

 

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Forecasted IT Spending

In 2020, IT spending budgets will be largely driven by the needs to upgrade outdated infrastructure, address security issues, and accommodate growth. The amount of spending and the mix of services will vary by company size.

  • Smaller businesses are expected to spend more on hardware such as servers and laptops.
  • Mid-size companies will be spending more on mobile devices.
  • Larger corporations will spend more on managed infrastructure IT services such as power and climate solutions.

For software spending specifically, small businesses will focus their spending on operating systems. Mid-size companies will have a larger budget for productivity software and business support applications. Large enterprises will be spending more of their money on virtualization, database management, and communications software. Cloud services and recovery software will represent major budget allocations in the coming year and cloud spend will vary by company size.

Cloud Security

With the increasing popularity of cloud-based software and services and hybrid cloud solutions comes the increasing concern regarding cloud security. This is further reinforced by an ongoing rise in cyber attacks and data breaches. Cloud-based security solutions will remain a growing need across several sectors, especially in highly regulated ones such as finance and government. The global cloud security market was anticipated to garner $8.9 billion by the start of 2020. This need will create more opportunities for companies, entrepreneurs and investors.

 

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The Year of 5G

The highly anticipated 5G technology will see a much more momentous rollout in 2020, in contrast to the lackluster emergence in 2019. Hundreds of millions of 5G-enabled smartphones are expected to ship in 2020. 5G will deliver significantly high speeds and remarkable data capacity to expand the financial possibilities for businesses. It is able to support billions of connected devices across sectors, allow new innovation for the IoT, Artificial Intelligence, and Virtual Reality. It will also enable a new world of autonomous vehicles and smart cities through a fully connected society, shattering boundaries to create a scalable global marketplace through unified technologies. Businesses will need to be prepared with how this new technology is going to dramatically alter the possibilities of the cloud and the need for virtualization-based networks as opposed to fixed-function equipment. While it is not going to happen overnight, 5G technology will grow increasingly more available throughout 2020, changing the availability of certain devices and transforming industrial possibilities.

Edge Computing

Edge computing is not a new concept, as it has existed for years. However, the value opportunity that it represents across industries is enormous. 2020 is anticipated to be a highly emergent year for edge computing due to the availability of faster networking technologies such as 5G and analytic capabilities in smaller devices.

Edge computing allows data processing to be done physically closer to where the data is generated (the edge of the network) rather than at a massive data processing center, which in turn reduces latency and processes the data much faster. This opens up countless new opportunities. Additionally, this technology offers several benefits for businesses, such as reduced costs, improved energy efficiencies, predictive maintenance, increased reliability, smart manufacturing, and security enhancements.

Let’s Talk Soon

At Benchmark International, our team of M&A advisors is ready to help you plan the next steps for you and your company. Whether it is selling your business, creating an exit strategy, seeking investor assistance, or finding ways to create growth, we are here to work on your terms to help you make your future as bright as possible.

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14 Common Misconceptions About Selling A Business and Engaging an M&A Firm

1. “I can conduct the sale myself.”
You could. But you are likely to get a much better deal if you have the guidance of an M&A professional on your side. Not to mention, you are going to have far less of a headache if you do not take on this complex process on your own. It’s going to take a good bit of time and is going to involve meticulous details. The help of an M&A expert also allows you to remain focused on running your business instead of getting caught up in the sale process and being overwhelmed by trying to juggle both, just to get a smaller profit.

2. “I already know my buyer.”
You know your business better than anyone, so it is easy to assume that you will know your perfect buyer. But it is a competitive world and there are many types of buyers that could be a great fit. Fixating on one type of buyer limits your options. Exploring all of your prospects will allow you to maximize your sale potential. This includes buyers that may not even be in your same industry. You are more likely to find the right buyer with the help of an M&A firm that has global connections and vast experience brokering these types of deals.

3. “Selling will only take a few weeks.”
It is very rare that any merger or acquisition is completed quickly. It typically takes months to years to find the right buyer and iron out the details of the sale. Six months is a common estimated timeframe for small to mid-sized businesses.

 

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4. “Asking price will be the purchase price.”
These are not the same thing. Following negotiations, it is common for the sale price to be lower than the asking price. A qualified M&A advisor can determine the fair market value of your business, help to maximize this value, arrange a better deal, and manage your expectations regarding the transaction.

5. “A buyer's financing is not my problem.”
A buyer's financing should surely concern you because they cannot buy your company without the capital needed to do so. You can play a role in moving the process along by boosting lender confidence through your testament as to how the business can continue to thrive under new ownership.

6. “I already have the advisors I need.”
As a business owner, you have skillful attorneys and accountants on your side that deserve credit for the fine work that they do in their areas of expertise. But it is unlikely that they are experienced in conducting complicated M&A deals. Even if they have a small level of experience with M&A, it probably is not enough to ensure that you get the best deal possible. Remember that selling your company is a monumental one-time deal that will impact the rest of your life. Consider how much you really want to risk your life’s work in the hands of someone who is not a consummate M&A expert.

7. “Next year, I can sell for more.
Markets can be extremely unpredictable, especially in certain sectors. While timing is important to a sale, it is possible to wait too long and miss out on your best window of opportunity. Working with M&A professionals can help you make better decisions based on reliable data and knowledge, best determining when you should sell.

8. “My business is entirely different.”
It’s not out of the ordinary for a business owner to feel that their company is worth more than it actually is simply because of their emotional connection to it. While most businesses do have their own unique aspects, the reality is that unicorns are rare. You are better off to keep your expectations down to earth, because your business is likely not immune to middle-market norms.

9. “Selling means getting what I want.”
You deserve a deal that delivers on your goals for your future. But remember that a sale is going to have to work for both sides—otherwise you might as well not even consider selling. Many buyers are savvy and recognize when a seller is going to be unreasonable. The best way to fulfill your aspirations is to work with an M&A advisor that knows how to communicate with buyers and negotiate on your behalf while being mindful of how to make the deal enticing for them.

 

Ready to explore your exit and growth options?

10. “I can wait to sell when I am ready.”
If you are seeking disappointment, this is the attitude to have. Waiting until you feel ready is a major pitfall. There are several factors regarding the economy, your industry, and the state of your business that must be considered into the timing of a sale. You might finally be ready, but you may not get what you could have if you went to market at a more suitable time. If you plan to sell eventually, the smart move is to start preparing your business sooner rather than later.

11. “Things are going great. So why sell now?”
Because when your business is trending upward, you are in a much more advantageous position to sell. You are more likely to see increased competition to buy and higher company valuations, and you will be under less pressure to accept any old offer.

12. “My company is ready to sell.”
Properly preparing a business to be taken to market takes quite a bit of work, time and energy. The level of detail that a business owner puts into compiling finances and business records, increasing marketability, planning for the transition, and crafting an exit strategy, directly impacts the salability of a company. If these matters are not in order, your company is not ready to sell.

13. “I must sell 100 percent of my business.”
There are some buyers that are content to providing capital for a minority ownership stake. This type of deal can give you capital to put back into the business and facilitate growth while you still remain the owner. Working with an M&A advisor can help you identify these buyers.

14. “Negotiating is over once I sign the LOI.”
Signing the letter of intent (LOI) is very important, but negotiations do not end there. There will be comprehensive due diligence leading up to the drafting of the purchase agreement. Negotiations continue until the purchase agreement is signed.

Let’s Talk
If you are considering selling your company and enlisting the help of passionate M&A experts like ours at Benchmark International, we are ready to become your partner in success

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5 Qualities The Best People In The M&A Industry Tend To Have

1) Discretion

Privacy and confidentiality are absolutely essential to any M&A deal. Anyone handling or involved with the sale of a business must be trusted implicitly to maintain discretion around all details of the business and any sensitive materials, including intellectual property.

Discretion is also important to ensuring that both employees and customers do not hear that the company is for sale before the intended timing. This can result in unnecessary panic and the loss of clients and valued talent. Sellers should seek out an M&A advisory team that has an established reputation of trustworthiness in such delicate matters. 

2) Passion

The best people in the M&A industry do not just like what they do—they absolutely love it. When you love what you are doing, it is easy to be truly dedicated and passionate about it. That kind of passion translates into the ability to deliver on the best interests of the seller and arrange a deal that helps them fulfill their aspirations for their business and their future. When your entrusted M&A expert is passionate about delivering life-changing choices for you, it will be evident in their actions and the options that they bring to you.

 

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3) Analytical Thinking

M&A transactions are very complex and require assessment of a great deal of data and financials, knowledge of valuation techniques, the ability to market a company, and many other aspects. Navigating through so many details with precision is crucial to any lucrative transaction. A highly analytical mind is needed in order to process massive amounts of information and develop an accurate and error-free evaluation in every step of the process.

4) Experience-based Vision

In order to sell or grow a company through M&A, there must be a clear understanding of the seller’s industry, the market, the competition, and applicable geographic regions and their related nuances. An effective M&A strategy for maximum success comes with pertinent experience and the ability to define a clear path to creating value and reaching the best possible outcome. A quality M&A partner will have a proven track record with all of these aspects. 

5) Compassion

To be truly successful as an M&A advisor, there should be a compassionate understanding of the client being served. Business owners have worked so hard through their entire lives to build their companies and selling is a very personal, emotional journey. They are going to have fears and doubts that need to be mitigated. Empathy during the process is key to fully understanding a seller’s motivation and goals for their future. It also facilitates better communication and the ability to bring people together. A truly good M&A team will never force a seller into a deal with which they are not 100% comfortable. This requires a willingness to see everything from the seller’s perspective throughout the entire journey.

Contact Us

If you are ready to engage in a deal to sell or grow your company, please reach out to our esteemed experts at Benchmark International. As a passionate and compassionate M&A team, we take a personal stake in formulating the ideal path to achieving your goals and maximizing the value of your business.

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Common Pitfalls Owners Face When Selling A Business

Not Knowing the Value of Your Business

As important as it is to know the value of your own business, the reality is that 65 percent of business owners do not know their company worth. Valuation is a crucial step in taking your business to market. Simply put, you cannot negotiate the best selling price for your company if you do not know what it is worth.

Selling at the Wrong Time

Market timing is important to a business acquisition because it can directly affect a company’s value based on competition, demand and economic factors. You do not want to rush to sell, but you also do not want to wait too long. Finding this delicate balance is crucial to maximizing your company value prior to your exit. Professional M&A experts can assist you in properly determining the right time for you to sell your business because they have a strong understanding of the markets and have exclusive access to opportunities that can play into the timing.

Lack of Preparation
The most frequent mistake made by business owners in sale is not properly preparing for it. Before taking a company to market, there are several factors that must be addressed. These include detailed documentation regarding finances and profitability, contracts, personnel, exit planning, and other issues that will affect both value and salability. Proper preparation can take anywhere from months to years, depending on the size and complexity of your business. It is smart to seek the guidance of a professional M&A advisor to help you with these details to ensure that nothing is overlooked. 

 

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Misunderstanding Future Cash Flow

As a business owner, it is easy to focus on liquidity as a result of a deal and fail to consider how timing and proceeds will be factored into your retirement plan and how it conforms to your standard of living.

Studies show that 70 percent of business owners do not know what after-tax income they need to support their lifestyle. 

You need to have a clear and detailed understanding of your risk and liquidity profile to help you discern if and when you should sell your business. This includes the calculation of your net worth by comparing your financial assets with your financial liabilities, sources of cash flow, and income tax liability.

Not Having an Exit Plan

A staggering 85 percent of business owners have no exit strategy—something that every business owner absolutely should have in place. 

Exit planning is extremely important for several reasons. A solid exit plan will help you outline your goals for the future of your business as well as your financial retirement goals. It also helps you determine a timeframe for when you want to sell, can enhance the value of the company, gives you a blueprint for success, and protects you in the event of unforeseen circumstances.

Misrepresentation
Of course you want to portray your company in the best light, but you must be careful to not misrepresent it to prospective buyers. Avoid the urge to inflate numbers, exaggerate projections or try to hide issues. Providing inaccurate information can blow a sale and erode your reputation with other potential buyers, derailing any possibility of a deal. Your honesty and transparency will also earn the trust of investors, increasing the likelihood of a sale.

 

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Breaking Confidentiality
When selling a business, even if only considering it, it is important to carefully handle who knows what—and when. It will not be a good situation if your staff hears about the sale from anyone other than you or your leadership team and they descend into a panic. You also do not want your customers or clients finding out and jumping ship. Another reason to be careful with confidentiality is because it can affect the sale if a buyer feels that you cannot be trusted or that they are getting damaged goods.

Not Addressing the Transition
Selling a business is a major undertaking and it is easy to get so caught up in the details of the sale that you overlook the transition process that will need to happen after the deal is closed. You will need to work with the acquirer to determine if you need to stay on with the company for a short time to help move the transition along smoothly, or if it will be an immediate exit. There are also other factors that will play into the transition, including how it will affect the management team and the staff. It is important to make plans for the transition completely clear to avoid confusion, frustration and fear of the unknown.  

Is it Time to Sell?

Enlist the expertise of the M&A advisors at Benchmark International as your partners in achieving the highest standards for the sale of your company. Our team will make sure you avoid pitfalls that you are not even aware may exist, and we are dedicated to arranging the very best deal with your goals and best interests as our top priority every step of the way.

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Benchmark International has Successfully Facilitated the Transaction Between Regency Cleaning Services Limited and Ecocleen Services Limited

Benchmark International has advised on the transaction between contract cleaning firm, Regency Cleaning Services, and national commercial cleaning contractor, Ecocleen Services.

Regency operates throughout Berkshire, Buckinghamshire and Oxfordshire, supporting more than 100 clients. The company’s team of 500 staff are responsible for delivering cleaning, waste management, porterage and maintenance services to a variety of private and public sector sites such as schools, nurseries, offices and car showrooms.

Ecocleen has more than 25 years’ experience of developing and implementing tailored commercial cleaning solutions. The franchise handles contracts of all sizes on behalf of more than 600 customers, servicing both single and multi-site operations on a local, regional and national basis.

Ready to explore your exit and growth options?

Following the acquisition, Regency’s Managing Director, Darran Penny, will join Ecocleen as Commercial Director.

The successful takeover will enable Ecocleen to increase its presence within key sectors such as education and motor retail, while expanding its nationwide franchise network. Regency customers and staff also benefit with Ecocleen bringing its technological innovations and commitment to the environment to the combined operation.

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What Drives The Need For Companies To Consider Mergers And Acquisitions

Mergers and acquisitions (M&A) are an ideal pathway to stimulating positive results for businesses such as creating growth, gaining a competitive advantage, boosting market share, or improving supply chains via the consolidation of companies.

Growth Creation

A merger or acquisition is an extremely effective method for growing a company’s market share or creating stability in the market. When one business either buys out or combines with another business, it can result in increased productivity, sales and brand loyalty, as well as improved cost synergy. Having a larger share of the market usually means a company can raise their prices and generate more profits. Growth can be created by access to emerging markets, new geographies, new technologies and the acquisition of intellectual property.

Competitive Edge

In many cases, M&A transactions enable acquirers to grow their market share by eliminating the competition through the purchase of a competing company. In today’s technologically savvy world, the aim to improve tech capabilities and drive innovation is a huge driver of consolidation.

 

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Acquisition of Talent

In many industries, there is an ongoing shortage of talent. These shortages can obstruct a company’s ability to grow and hamper its ability to serve existing customers. A business can address their pressing need for talent by purchasing another company that has the type and amount of talent that can address their needs. It can also be a faster route to getting the needed talent versus trying to develop it organically.

Economies of Scale

When two companies combine forces to create synergy, the pooling of their strengths tends to bolster overall performance and lower operating costs. This can be especially beneficial in industries that have high fixed costs and require large amounts of capital such as airlines, auto manufacturers, and pharmaceutical companies.

Supply Chain Power

When a business acquires one of its suppliers or distributors, an entire layer of costs can be eliminated. Buying out a supplier is known as a vertical merger. It allows a company to save money on the margins the supplier was adding to its costs. Buying out a distributor enables a business to ship products at a lower cost. These changes can translate to lower costs for consumers, which can increase sales.

Another benefit of a vertical merger is that it gives the acquiring company more control over supply, eliminating the risk of price gouging by suppliers. Depending on the type of business, a vertical merger can also result in improved technologies or expertise.

 

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Increased R&D

When a company acquires another company, they can often make more investment into the areas research and development. Studies show that M&A activity strongly increases the incentive of companies to conduct R&D. This is less so for large firms, as they may buy smaller firms to gain their technology.

Social or Political Influence

In certain industries, there can be a motive to increase social or political influence by gaining a greater stake and, therefore, more of a voice. This can pertain to media companies, newspapers and the like. An M&A transaction can also change public perception of a company. If a company has struggled with negative publicity, an acquisition by a company with a stronger, more positive image can alter public perception of the business.

Bankruptcy Solution

An M&A strategy can be employed to prevent a firm going into bankruptcy and being liquidated, often referred to as distressed M&A. A thriving company may wish to acquire a struggling company with the objective of turning it around and making it profitable. These transactions can be particularly risky, as well as legally and financially complicated.

Research indicates that M&A in bankruptcy is more likely at times when the cost of financing a stand-alone reorganization is expensive relative to the cost of selling the company’s assets to a buyer with internally generated funds or lower capital costs.

Is an M&A Strategy Right for You?

If you are considering selling or growing your company, our M&A experts at Benchmark International would love to hear from you. Our globally connected team is dedicated to helping business owners maximize the value of their companies and complete deals that go above and beyond expectations. Setting you on the path to the future of your dreams is what drives us to do great things.

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Why Cultural Synergy Is Imperative When Selling Your Business

When selling a company, of course the numbers are important. You want to obtain the most value in a sale and it can be easy to get caught up in revenue potential and expansion goals. But if you are truly concerned about the completion of a deal and the long-term success of the business, cultural fit between the converging companies is something that should never be underestimated or overlooked. 

M&A Culture Shock

The culture affects everyone in the company, from the CEO and management down to every last employee. Values matter, communication is critical, morale is extremely influential when it comes to productivity, and these topics become even more important in cross-border transactions. Synergy in this respect can directly impact the bottom line of the business. Culture clash can utterly shatter the prospects of the merger or acquisition’s success.Research shows that complementary competencies contribute significantly to the enhanced overall M&A performance.This is why cultural integration must be considered before a deal is done, and why many savvy acquirers have formulas in place to address the fusion of two organizations’ cultures.

 

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What Defines Company Culture?

The culture of a company is typically outlined by certain key factors:

  • How the company defines essential capabilities and competitive strategies
  • The normal behaviors of leadership and staff members
  • The business’s operating model including structure, accountability, supervisory systems, and day-to-day operation guidelines
  • National and regional customs, observances, language barriers, dress codes, work ethics and ideologies  

Talent Retention is Key

Talent is a major factor in the acquisition of a company, as is the retention of that talent. Cultural fit has proven to be a critical factor in the retaining key talent after a sale due to issues related to autonomy and disruption—all things that should be negotiated upon a transaction. Research demonstrates that giving decision-making autonomy to the acquired business can improve integration and overall acquisition performance. Routines, relationships, and processes that are already embedded in a target company’s culture need to be understood by a buyer to avoid potential disruptions and ensure performance that is conducive to success. This can be especially important in the acquisition of high-tech companies.

Studies have indicated that if national and corporate cultural differences are not properly addressed during pre- and post-acquisition integration, it can have disastrous consequences on the overall success of the M&A transaction.

How Cultural Differences Can Actually Help

Cultural differences in cross-border transactions are not always a bad thing. It has been demonstrated that these differences can actually enhance the competitive advantage of the combined firms when cultural integration is properly handled. These benefits include:

  • Access to distinct and valuable capabilities that may be rooted in the different cultural environment
  • Development of deeper knowledge structures
  • Lessened inactivity within the organization
  • Excellent source of learning, innovation and value creation
  • Greater manager involvement in social and cultural factors that are sometimes overlooked in domestic M&As 

“Cultural learning” can change negative stereotypes, create positive attitudes, and improve communication between the two companies. For this process to work, there should be a controlled dispersion of information between parties that enables them to obtain accurate information about each other in a constructive way. This eliminates misconceptions and shines a light on actual differences that can be seen as the best aspects of both cultures.

 

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Culture & the Due Diligence Process

Due diligence is crucial to every M&A deal, and this includes assessment of the cultural factors that may have impacts on the transaction and its success. Some questions to consider include:

  • Does the target company have the right talent to carry out the acquisition strategy?
  • Which team members are essential to continued value?
  • What are potential deficiencies within management that can hinder long-term success?
  • What is the overall cultural compatibility between the two organizations?

Cultural differences that can be deal killers need to be identified as early in the process as possible, keeping in mind that cultural differences can, in some cases, be beneficial. In any case, cultural differences should never be disregarded. Because they are so important to the success of a deal, they must always be evaluated and effectively managed.

Ready to Sell?

If you feel the time has come to sell your company, start the process off right by reaching out to the M&A experts at Benchmark International. Not only will we help you craft a winning exit strategy and use our global connections and proprietary methodologies to find the very best match for an acquirer of your business, but we can also ensure that you achieve cultural synergy before a sale. As a global company, we understand the importance of culture and know exactly what to look for in the alignment of two organizations.

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Benchmark International (South Africa) is proud to be shortlisted for the annual Africa Global Funds Awards

Benchmark International (South Africa) is proud to be recognised and shortlisted in the category of Best Independent Advisory Firm alongside some of South Africa’s most recognised corporate finance brands.

The Awards were created to honour and generate both industry and public recognition of the outstanding efforts and accomplishments of Service Providers covering Africa.

The 2019 awards shortlist was announced in mid-September and the black-tie event and ceremony will be hosted on October 24th at the Radisson Blu Sandton, Johannesburg, South Africa. 

Benchmark International’s nomination was motivated by the consistent year on year growth in transaction activity and success achieved in transactions across the spectrum of M&A and corporate finance disciplines.

About Benchmark International:

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximising solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $6B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 12 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.

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Business Services M&A: Office Administration & Recruiting

When companies seek to enhance their margins and better serve their customers while reducing the cost of providing services, they outsource non-revenue producing functions to outside business services providers, known as business process outsourcing (BPO) companies. In the area of recruiting, it is a form of BPO, commonly referred to as Recruitment Process Outsourcing (RPO).

The business process outsourcing industry is valued at nearly $1 trillion USD. The United States leads the market with 40% share worth more than $400 billion, followed by Europe and the Middle East with a market valued at $300 billion. The global RPO market is valued at around $5 billion.

Technology has greatly expanded the capabilities in this sector, as it is not uncommon for companies to have virtual contact centers where employees work from their homes, or to have offshore centers where support staff works from another country or continent. It is less efficient for companies to have functions performed in-house that require overhead costs. This is a major driver of growth in the BPO industry and represents a relatively still-untapped opportunity in many countries that use little outsourcing.    

There are also several other benefits that companies gain by outsourcing services.

  • It frees up the time and energy of internal resources to focus on bigger picture strategic goals.
  • There is no time or cost associated with training new staff members.
  • It offers access to regulatory experts to ensure compliance in an increasingly regulated world.
  • There is no employer liability.
  • Administrative services can be paid for when they are needed, as opposed to employing someone full time and having them be under-utilized.
  • The interviewing and hiring processes can be avoided, saving additional time and money.
  • Employers do not need to pay benefits, leave or holidays for outsourced staff.
  • It also opens up the opportunity for smaller companies to carve out more market share by increasing their global reach.

 

Ready to explore your exit and growth options?

 

Office Administration Outsourcing

A large and growing segment of this outsourcing is office administration. Essentially any company in operation has administrative tasks that must be accomplished to keep the day-to-day operations running smoothly. Administrative functions that are often outsourced include payroll, accounting, human resources, data management, employee benefits, insurance claims management, and client support.

Recruitment Outsourcing

RPO companies emerged from traditional recruiting needs, but are designed to work differently. All or part of a company’s recruitment processes is assigned to an external service provider. RPO services differ from that of staffing companies in that they do not simply find candidates to fill job openings. They focus on the overall improvement of a company’s recruiting process as more of a strategic, consultative partner. They study factors such as turnover rates, technology, scalability, and how much time it takes to fill a position.

Many companies choose RPOs to improve recruitment efficiency, reduce cost, make hiring more scalable, improve the quality of hires, meet the talent needs of short-term projects, and improve workforce analytics and planning.

The industry sectors with the largest market shares are technology, telecom, finance, insurance, healthcare, biotech, pharmaceuticals, and medical equipment.

BPO M&A Activity

As the use of BPO services becomes more common around the world, the M&A activity surrounding them increases, with a large concentration in the middle market. There is a tendency for customers to prefer fewer vendors with more diverse service offerings, motivating BPOs to use M&A to diversify to increase customer wallet share.

In this highly competitive market, BPO companies typically acquire target companies in order to gain:

  • More capabilities for broader service offerings
  • Exposure to higher growth end-market verticals
  • Broader geographic reach to offer more global services
  • Economies of scale to lower proportion of fixed costs

 

Feel like it's a good time to sell?

 

RPO M&A Activity

RPO companies are becoming increasingly globalized as a result of mergers and acquisitions. To be successful in this growing market, RPO providers have found different ways to distinguish themselves.

  • They specialize across geographic regions, vertical markets, related jobs, and buyer segments.
  • They offer value-added and technology-based services, such as analytics and mobile recruiting.

For an M&A deal to be successful, sellers should conduct an all-encompassing assessment of their value proposition and how it ultimately aligns with the buyers’ interests.

M&A Due Diligence

Conducting due diligence for a merger or acquisition is always a time-consuming undertaking, and this is especially true when the target is a BPO company. Location analysis of the target company should be performed for any potential acquisition to help form an accurate purchase price and avoid costly post-closing issues. It assesses site location, economic development, competition, real estate markets, workforce issues, saturation levels, historical attrition rates, recruitment, and retention viability. Partnering with a specialty company broker who has this type of experience is advised.

Contact Us

If you are ready to take the next step with your business, whether it is selling, expanding, or retiring, contact our M&A specialists today. Our expertise, global connections, and proprietary technologies are here to guide you to a prosperous future. 

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10 Facebook Pages About M&A To Follow

Benchmark International

@BenchmarkCorporate

Benchmark International is a leading worldwide M&A advisory firm that specializes in the lower to middle markets. On the company's Facebook page, you will find regularly updated news and information regarding the organization and its involvement in the world, as well as relevant topics and insightful articles regarding different industries, topics in M&A, and additional useful information for entrepreneurs, business owners, business buyers, and anyone eager to learn more about M&A.

 

M&A Leadership Council

@MALeadershipcouncil

The M&A Leadership Council is a global alliance of companies and experts in everything related to mergers & acquisitions, including best practices, training and certification, resources, and information about M&A companies. Their Facebook page offers a nice compilation of content that is relevant to people working in M&A, as well as CEOs and business owners, and it keeps followers updated on interesting events.  

 

The Middle Market

@themiddlemarket

This M&A-focused page offers breaking news, in-depth commentary, and helpful analysis about deal making in the burgeoning middle market. It is frequently updated with information regarding current deals that are being made or have been made, and articles that focus on other happenings in certain industries, as well as M&A events.

 

Entrepreneur

@EntMagazine

This popular publication caters specifically to entrepreneurs and topics relevant to them, offering tips, tools, and insider news to help businesses grow. Here you will find occasional articles regarding M&A news and insights mixed in with a wealth of other quality information that is relevant to business leaders.

 

Institute for Mergers, Acquisitions & Alliances

@imaa.institute

IMAA is a global, non-profit M&A think tank and educational provider. They offer M&A trainings and workshops for executives worldwide, and offer the only globally oriented M&A Certificate Program. Their Facebook page is frequently updated with information and coverage regarding their events, as well as news and opinions on M&A from around the world.

 

Ready to explore your exit and growth options?

 

Harvard Business Review

@HBR

Founded in 1922, Harvard Business Review promotes smart management thinking for business professionals worldwide through reliable insights and best practices, with the ultimate goal of making leadership more effective. Their Facebook content spans a myriad of business-related topics and news, including happenings in the world of M&A.

 

Morningstar, Inc. 

@MorningstarInc

With a mission to power investor success, Morningstar is a top provider of independent investment research in North America, Europe, Australia, and Asia. It provides data and research insights on a range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data, and their Facebook page reflects these related topics.

 

Investopedia

@Investopedia

For 20 years, Investopedia has provided educational information on complex financial concepts, investing, and money management. While not exclusive to M&A, on their Facebook page you will find a variety of topics covered that are relevant to businesses of all types, stocks and the economy, including articles that delve into mergers, acquisitions, trends, and historical transactions.

 

CNBC International

@cnbcinternational

The self-proclaimed "home of all things money" network is a leading business and financial news organization that reports stories from around the world. Here you can access real-time market coverage and news related to careers, entrepreneurship, leadership, personal finance, and mergers and acquisitions.

 

Seeking Alpha

@Seekingalpha

Seeking Alpha is a substantial worldwide investing online community, and their Facebook page is a great extension of their online presence. The platform connects millions of investors and money managers every day regarding news and investment ideas. They handpick articles and podcasts from the world's top market blogs, money managers, financial experts, and investment newsletters, publishing approximately 250 articles daily. 

 

Contact us

Contact one of our analysts if you are ready to start a conversation about M&A for your business.

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The Ultimate Checklist For Buying A Business

Acquiring an existing business can offer great advantages over starting a new business from scratch, especially if the target business is thriving and holds more opportunities for growth. When considering the purchase of a company, you should take certain steps so that you can be confident that you are minimizing your risk and making a smart move. Use this comprehensive checklist to help you ask the right questions and guide you through the process. 

 

☐ Is the Target Company Financially Healthy? 

This is a question you must ask yourself before considering anything else about the business. You will want to carefully comb through the business's financial statements for the past five years (at least) to identify if anything appears out of the ordinary and to assess how the numbers compare with standard performance in that sector. Also, request to see the tax returns for the same years. This will help you determine whether the owner has put personal expenses through the company books and give you a more complete picture of the company's actual value. You also will want to know if you will be taking on any existing debt, and exactly how much.

 

☐ Will You Be Able to Generate Cash Flow?

It is crucial that you know whether you will be able to generate cash flow immediately upon purchasing the business. If not, are you in a position to carry the business until that time comes? No matter how attractive the company may seem, you must ensure that you are not getting in over your head. Take a thorough look at sales records to assess past and future performance. You must also find out if any existing clients or customers are planning to part ways and what you can do to retain their business. 

 

☐ Does the Company Have a Good Reputation? 

Doing a quick Google search can reveal quite a bit about a business. You will want to see how the company is perceived in the world. Does it have a lot of negative reviews or bad press? Are there any customer complaints, and do you know how they were handled? Get a comprehensive look at the business's reputation because you are going to need to see if you have work to do in order to turn it around. This could include a complete rebranding and marketing effort, which costs money. 

 

☐ Have You Done Your Homework on the Staff?

When you acquire an existing business, you are also acquiring its management team and employees. You should know the skill levels and proficiencies of any staff you will be inheriting, and whether you are going to be faced with the task of replacing key staff members. Do all team members plan to stay with the company? Have they been made any promises by previous ownership that you will now be expected to fulfill? Is anyone retiring or planning to go on extended leave? Is anyone disgruntled about the sale? When you know the answers to these questions, you'll be best prepared to address any issues. 

 

Ready to explore your exit and growth options?

 

☐ What is the State of the Inventory?

If inventory is applicable to the business in question, everything should be itemized and given a carefully determined value. Will any inventory lose value with time, or only have a value at certain times of the year? Will it be adequately stocked for when you take over the company? When you are investing in a company, you're going to want to have everything you need on hand to generate revenue from its operation. 

 

☐ What is the State of the Physical Property?

First things first: you need to know if the business owns the property on which it resides or if there is a lease agreement in place. Then seek out answers to the following questions. What are the details of the lease and the reputation of the landlord? How much is the rent, and is it due to increase? Is the property in good condition, or is it in need of repair? If the business owns the property, what are the real estate taxes? Is the property able to accommodate any planned growth? Is it legally zoned? Is the location appropriate? Are you going to need to make changes, or find a new location altogether? This is an area where you cannot be too thorough. 

 

☐ Do You Have All the Legal Documents and Contracts?

This is another critical step in purchasing a business. You are going to need to have every last piece of paperwork that pertains to that business. This includes business licenses, copyright agreementspatentstrademarks, import and export permits, mining rights, real estate documents, etc. Basically, if something relates to the business in any way, you should have documentation of it. If the current owner has not kept good records, there is your first sign that you might want to think twice about moving forward with the acquisition. 

 

☐ What is the Condition of the Business's Equipment?

You should assess the condition of all office equipment, furniture, machinery, and vehicles used for the business. What is owned and what is leased? What are the items' lease or purchase details, and are there maintenance agreements in place? You should assess the condition of all equipment to determine if anything will need to be replaced because this will be a factor in the purchase price of the business.

 

☐ Are You Familiar With the Business's Suppliers?

This is important because suppliers can have a significant impact on how reliable your business is able to run. You want to ensure that they are established and committed to providing superior quality and service. Find out if they fill orders on time and meet their obligations. Look into any contracts that are in place, so you understand the relationship. You also will want to ask if there are any expected price increases or factors that may impact the existing arrangement.

 

☐ Contact Benchmark International 

If you are looking to buy a business, we represent highly motivated sellers in the lower-middle and middle market that may be the perfect fit for you. Contact one of our experts to discuss how we can help with target company searches. 

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Benchmark International's Three Key Philosophies for Getting Deals Done

As we work exclusively in the mid and lower-mid markets, we see many deals succeed, and some wither. In an effort to have more of the former and less of the latter, we would like to share our core philosophies with the belief that helping you understand them will make working with us a more rewarding experience.


1. Time kills all deals.

Prudent and deliberate action are certainly also key aspects of getting deals closed but, in our experience, neither buyers nor sellers are inclined to be under-prudent or lacking deliberateness. Rather, unexplained and avoidable delays tend to stack up between the first meeting and the closing. Each delay shaves off a small percentage from the probability of closing. There are enough legitimate delays in the M&A process. When we see one that can be avoided, we will step in and attempt to get the ball rolling once again.

 

Ready to explore your exit and growth options?


2. Transparency is the best antiseptic.

We’ve seen too many deals die because one side or the other has hidden something until it is too late. Long before you meet our clients, we will have already guided them on the value of releasing the troubling issues they might have at the earliest opportunity. Hopefully, you will already have seen some of this in our Confidential Information Memorandums. We lean forward into these issues because we believe that the sooner they are addressed, the more solutions there are, and the less likely anyone is to feel hoodwinked. We hope you’ll feel the same way with your own challenges (for example, lining up debt financing) as well as any you may see with our clients.


3. The emotional must be covered as well as the financial.

This may be somewhat unique to our clients as our process appeals to a certain owner type. As you probably know, we specialize in closely-held and owner-operated businesses. Nowhere is it more true that “every business is a family business.” Our clients have typically had 20- to 30-year relationships with their businesses and often equate the sale process to sending their son or daughter off to college. When we work with acquirers that understand the effects of this fact pattern, we see a much higher level of success. In fact, we have built our teams, our process, and our engagements around it. We will be more than happy to help you deal with this interesting aspect of our clients. Please just ask.

 

Author
Clinton Johnston
Managing Partner
Benchmark International

T: +1 813 898 2350
E: Johnston@benchmarkcorporate.com

 

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A Trip Back in Time: M&A 20 Years Ago

The year was 1999. The world was transforming thanks to new technologies, and society was bracing for what Y2K and the millennium bug might bring. The popularity of the Internet was skyrocketing, and home computers were becoming a necessity rather than a luxury. Napster, Blackberry, Tivo, and Bluetooth were introduced. The "Melissa" E-mail Virus infected millions of computers and caused more than $80 million in damage globally. The Euro currency was established in 11 countries. The cost of a gallon of gas was $1.22. Bill Gates became the wealthiest man on earth, and Jeff Bezos was named Time Person of the Year. But what about the world of mergers and acquisitions twenty years ago?

1999 M&A in Review

The year 1999 was known as the year of the hostile deal. Strategic refocusing of companies was at an all-time high. Companies were motivated to act quickly to fend off larger rivals. The philosophy was that the bigger a company became, the more dominant it would be in the market.

  • Total worldwide mergers and acquisitions grew from $286.9 billion in 1991 to $3.2 trillion in 1999, with a total of 24,436 transactions that year.
  • Also in 1999, worldwide hostile deals reached more than $473 billion in dollar volume representing more than 14% of all announced worldwide deal value.
  • There were 9,192 M&A transactions valued at $1.4 trillion in the U.S alone, including 15 hostile deals valued at $112.7 billion.
  • Deals valued at over a billion dollars increased from 13 in 1991 to 194 in 1999.
  • There were 47 transactions valued at more than $10 billion worldwide in 1999.

 

Ready to explore your exit and growth options?

 

Making M&A History

Several of the biggest M&A deals in history took place in the years 1999 and 2000.

  • Vodafone AirTouch of Britain negotiated the hostile $183 billion merger of Mannesmann of Germany. This all-stock transaction set a record for a corporate takeover.
  • Also in 1999, Exxon and Mobil merged to become an energy industry superpower.
  • In January of 2000, America Online's announced the $165 billion purchase of Time Warner.
  • The same year, Pfizer acquired Warner-Lambert for $90 million, creating the second-largest drug company in the world.

These four deals are among the world's largest mergers of all time. 

Tech & Communications Revolution

The years of the mid to late 1990s were an economic game-changer. The tech and communications revolution certainly had a major impact on M&A activity. It stimulated the globalization of markets by improving cross-border communications and transactions, and it enhanced capabilities in modeling cash flows and structuring transaction scenarios. It also resulted in a boom in new business launches and the reimagining of established businesses.

1999 was the height of the Information Age, and the dot-com tech bubble was fatter than ever. Markets were booming. Dot-com startups were going public. Online shopping was becoming an actual thing. People were quitting their jobs to engage in full-time day trading and personal investing. We saw the rising popularity of online companies such as eBay, Amazon, Yahoo!, AOL, Match.com, and WebMD.

Of course, the bubble burst, leading to the early 2000s recession. Many online companies went under, and other major corporations lost a large portion of their market cap. Pets.com lost a whopping $1.75 trillion in value only nine months after its IPO.

Unfortunately, the dot-com crash also led to the telecoms market crash of 2001. Telecom providers over-invested in their networks, and mobile phone companies overspent on 3G licenses. The high levels of infrastructure investments were out of proportion to cash flow, and increased competition led many telecoms providers to slash prices for services, especially in the European market. Within one year, 100,000 jobs were lost in telecoms support and development across Europe.

Now vs. Then

The recession in the early 2000s cooled M&A activity for obvious reasons. The good news is that 2019 has actually been the most dynamic year for M&A activity since the year 2000, driven by a surge in North American deals. CEO confidence is on the rise, and investors are showing a willingness to take risks.

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How & When To Explain To Your Employees That You Are Selling Your Business

You’ve decided to sell your company, but when is the right time to tell your employees? And what is the right way to tell them? The conversation may not be easy, but if you follow a few simple guidelines, you can ensure that you handle it to the best of your ability.

Have a Plan

You should already have an exit strategy in place when you are selling your business, but that is your own personal exit plan. You should also think about how the process will affect employees. Develop a clear timeline of how you expect the deal to progress and when you will meet with your staff about it. You do not want to come across as confused and unsure about the process. The more confident you are in explaining it, the more confident they will be about it being a good plan for them as well. You may also want to consider when to introduce the new owner. By having the staff meet the new boss, you can dispel a great deal of anxiety. The best time to do this is AFTER the deal is done, in the event that the deal falls through. Otherwise, you are introducing them to someone irrelevant, adding confusion and instability. 

Wait Until the Deal is Done

It can be tempting to share your plans with employees early in the process. But if you disclose your plans too soon, you are opening yourself up to risks that can tank a deal. Employees can get scared into finding another job. Vendors and clients can get nervous and jump ship. These are all scenarios that are not in your best interest, as the health of your business is an essential aspect of a sale. By waiting until a deal is in place, you can avoid telling your employees false information when things are still subject to change.

 

Ready to explore your exit and growth options?

Tell Management First

Depending on the size of your business, you will likely want to inform key management before telling anyone else in the organization. They are going to need to fully understand the transition because you are going to need their support. They can help you maintain clarity when employees go to them with questions. If management is clear on what is going to happen, they can keep employees calm and properly informed.

Be Accessible

Once you’ve made the announcement, you must remain proactive in answering employees’ questions. It can also be important that they hear any news directly from you versus rumors around the water cooler.

Provide Written Communication

By creating a document that outlines pertinent points about the deal and the transition, employees can reference it following the announcement if they do not recall something. It also provides them with something concrete so that you are not leaving details up to their imagination.

Do Not Overpromise

Once you sell the company, you will no longer have control over what happens in the day-to-day business operations. It is important to express to your employees that you care about their futures and that you took the proper steps of protecting them when brokering the deal with the new owner. However, you want to avoid making promises that you will not be around to honor.

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Where Will Lower-middle Market M&A Be In A Year From Now?

The Current Market

The lower-middle market has remained positive for sellers in 2019, thanks to an abundance of buyers that are giving sellers the leverage to demand favorable terms. Most business sectors are seeing strong profits, and the bullish optimism of large-cap investors has spilled over into lower and middle markets. This has resulted in heightened interest and aggressive valuation and buying from private equity firms.

There are several patterns have carried over into 2019 from a very active year in 2018.

• M&A activity has been especially strong in the healthcare and technology industries.

• Acquisitions remain a popular strategy for companies needing talent to keep up with growth.

Buy-and-build strategies are proven to be working.

• Emerging markets are being attractively valued, especially in the Asia Pacific region.

• Competition for high-quality targets is intense, particularly for businesses that are owned by the rapidly growing retiring population.

• Small business confidence is strong, resulting in increased investment by owners.

What Lies Ahead

The world faces potential changes in the political landscape as the United States 2020 presidential election nears, Britain is under new leadership through the Brexit transition, and the global economy navigates significant political unknowns in the wake of trade deals and tariffs. However, the United States election takes place near the end of 2020, which could possibly stave off any significant effects on the economy until the year 2021.

 

Ready to explore your exit and growth options?

While no one can ever be certain what the future holds, we still see the benefits of a strong year midway through 2019, yet the lower-middle market has the potential to become more complicated in 2020. The current bullish market is strong but is expected to lose momentum based on the average amount of time that historical highs have been proven that they can be sustained. Many experts warn of a downturn in the economy next year, predicting that a recession is looming. In contrast, some experts expect M&A activity to remain robust regardless of the economy.

Obviously, uncertainty in the marketplace can impede M&A activity. But a recession does not necessarily mean that selling will be impossible. The variables that drive lower-middle market M&A include:

• Lending capacity: The less money a buyer can borrow, the less money they may want to spend.

• Cost of capital: The cheaper a buyer can borrow, the more money they may want to spend.

• Buyer access to equity capital: Strong profits and surplus cash motivate activity.

• Supply and demand for deals: Aging populations entering retirement and business succession plans, strategic buyers focusing on growth, etc.

In the lower-middle market, buyers and lenders both tend to stay much more disciplined regarding their willingness to lend, cost at which they lend, and returns they target. Buyers will be seeking targets with stability, limited cyclical exposure, a business model with recurring revenue, and a history of performing well through a recession.

Should You Sell Now?

The good news is that there is still time before a possible slump in activity and optimism. If you are looking to sell your business, you may have another 12 to 18 months to benefit from the premiums today’s sellers are getting. Keep in mind; it does not mean that after this time is over, you will not be able to sell. Companies are always looking to grow through acquisitions, and the market is always changing. You do not need to feel completely discouraged by any economic slowdown.

Consider how long you are willing to wait to sell your business if the market were to drop. If you do not plan to sell within around five years or more, you can wait patiently for the next market rebound. But if you are determined to sell in the next couple of years, it may be wise to get serious about your exit strategy while conditions are still favorable. Think about what is right for you, your business, and your family when deciding when to make a move.

Contact Us

Our business acquisition experts at Benchmark International can offer exit planning advice and help you plan a solid transition for your company. We will use all the tools at our disposal to get you the maximum selling price while preserving your vision for the future. We can also help if you are looking to buy a business. Contact us today.

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15 Smart Tips On Exit Planning

15. Decide the Company's Future

Before planning your exit strategy, you must decide the future course for your business. Do you plan to sell outright? Would you prefer that the company stay within family ownership? Do you want to retain a percentage stake in the company? Is there an employee that you would want to take over? Could a merger or an acquisition be the best move? This is a key decision to consider before embarking on your exit plan.

14. Set a Date

It's never too early to think about when you plan to retire. This need not be an exact date on the calendar, but you should establish a ballpark timeframe that you would like to put the wheels in motion for your exit. Having an idea of the timing will help you get the process started at the right time, whether it's two years from now or 20 years down the road, especially because most transactions take time.

13. Plan for Continuity

If your business will be changing hands when you retire, you should have a solid plan in place for maintaining the continuity of the company's operation. Both employees and customers alike will need to feel that the future is secure, and you should be able to reassure them through a clear strategy for the transition.

12. Use Diversity to Minimize Risk

The more diversity you have in your client and supplier bases, the more attractive and less precarious your business will be to potential buyers. They are going to need to have confidence that the business can grow, rather than falling apart if the sale results in the loss of one or two key clients.

11. Think Big Picture

It is not uncommon for a business owner to get wrapped up in the day-to-day details of running the company to the point where they lose sight of the bigger picture. It is a good idea to take a step back and consider where you want your business to be in the future, how you plan to get it there, and when your exit fits into that plan.

 

Ready to explore your exit and growth options?

 

10. Create Your Dream Team

Having a strong management team in place is crucial to any successful exit strategy. Whoever is taking the reins is going to be a significant factor whether you are selling the business to an outside party or bequeathing it to family or an employee. It will also help you rest easier about leaving the company in someone else's hands.

9. Get Your Financials in Order

Before you can broker a sale or transfer ownership or control, you will need to organize financial statements, valuation data, and other important documents about the business. If you are planning to sell, buyers will expect to see thorough documentation about the business operations, profits, losses, projections, liabilities, contracts, real estate agreements (pretty much anything and everything regarding the company).

8. Know Your Target

If you plan to sell your company, you are obviously going to want a buyer who has the financial capacity to take on your business. But money is not the only thing that you should be seeking. You want a buyer who shares your values and your vision for the company. They also should possess the right skill set to maintain the company's success and even grow that success. You should not waste your time with a prospective buyer that doesn't have the chops to take the business in the right direction.

7. Always Listen

Even if you feel it is too soon to sell and someone is reaching out to you, it is always wise to hear him or her out. It could result in a meaningful relationship that can be beneficial in the future. They could also reveal some things about your company that you have not yet considered, sparking new ideas and opportunities in the realm of business acquisitions.

6. Devise Practical Earn-outs

If you plan on getting additional payment as part of the sale of your business based on the achievement of certain performance metrics, be realistic about setting these goals. Falling short of these targets can result in less money for you and enhanced leverage for the buyer.

5. Get Your Tech in Order

Today nearly everything is powered by technology. You use it to help you get organized, but you also run the risk of letting things fall through the cracks. Think about all the logins and passwords that give you access to things that run the business. Establish a plan to streamline your tech while keeping it secure for a transition in management. There are enterprise cyber-security management solutions that can assist with these matters.

4. Know Your Number

Have you asked yourself, "What is my business worth?" When you understand the precise valuation of your business, you will be able to ascertain the difference between a fair sale and a bad deal, and get the money you deserve. This includes a company analysis married with a market analysis. You should enlist the help of an M&A expert to determine the valuation of your business accurately. It is worth it to ensure that you get your maximum value.

Feeling unfulfilled? Explore your options...

 

3. Put it on Paper

Having the proper paperwork drawn up for legal purposes is important in the event that something were to happen to you so that you can convey your plans and wishes for the business. The task of creating this safety net will also help you plan more clearly for the future. Sometimes there are details you may overlook until you go to put it all on paper. You should outline your plan and make sure any necessary signatures are on file.

2. Assess the Market

Markets fluctuate and can change at any given time. But if you carefully evaluate your industry's outlook and growth projections, you can time your exit strategy for when you can get the most value for your company. If the outlook is not trending toward optimism, you can take the time to consider how you can bolster the value of your business and make it more desirable in the future.

1. Partner With an Advisor

Valuating and selling a company is not easy. Neither is planning an exit strategy. Seeking the help of experts such as an M&A advisory firm can take an enormous weight off of your shoulders. It can also ensure that the exit process goes smoothly, stays on track, and achieves your specific objectives for both you and the company.

Benchmark International can help you establish your exit strategy and broker the sale of your company so that you get every last penny that you are worth. Call us to get the process started. Even if you are not 100% sure that you are ready to plan your exit, we can help you devise strategies to grow your business in the meantime.

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Should You Hire An M&A Advisor To Sell Your Business?

That’s an easy answer. YES! You absolutely should hire an M&A advisor to sell your business. Here’s why.

It’s Not Easy

The process of selling a company is guaranteed to be complicated. While an accomplished attorney or accountant can help, you are going to need a true expert intermediary to handle the entire venture if you are serious about selling and getting the best possible deal.

Consider the seemingly endless amount of work that needs to be done.

• Data and documentation must be produced and organized, stretching back several years to a decade. This is going to include financials, vendors, contracts, and so much more. Do not underestimate how overwhelming the paperwork will be.

• Potential buyers will need to be identified and vetted. A good M&A advisor has access to connections and a knowledge base that you would otherwise never have, opening up an entirely new realm of potential buyers. This process will include a fair share of phone calls, emails, and face-to-face meetings, all of which add up to be very time-consuming.

• You are going to need an experienced negotiator that knows how to maximize your business value and lay the groundwork for getting you what you want. This means knowing how to push a deal forward while providing you with peace of mind that things are on the right track. This also means creating a competitive bidding landscape.

Get Peace of Mind

Selling your business is not a process that should be taken lightly. Countless decisions will need to be made. Consider the reality of what is going to be required and embrace the fact that you cannot shoulder the burden and run your company. Make sure you can sleep at night. Find an M&A advisor that will find you the right buyer, deal with the minutiae, and get the job done—all while sharing your vision for the company, as well as your exit strategy.

They Can Get You More Money

It is also important to note that an M&A advisor is more likely to get you more money. Research shows that private sellers receive significantly higher acquisition premiums when they retain advisors, in the range of six to 25%. Additional research shows that 84% of mid-market business owners who hired an M&A advisor reported that the final sale price for their business was equal to or higher than the initial sale price estimate provided. After all, they know how to value a company properly.

Another benefit of having an M&A advisor is that it shows buyers that you are a serious seller. As a result, hiring an M&A advisor can help drive up your company valuation and get you more favorable terms.

Ready to explore your exit and growth options?

What to Look for in an M&A Advisor

Enlisting the guidance of the wrong advisor can be disastrous. The last thing you want is to end up in negotiations with someone who does not have your wants and needs in mind at all times. Even worse, they can slow down the process and cost you a fortune. When making this decision, know what to look for:

• You want an advisor that understands you, your company, and what you expect to achieve from the sale.

• Consider their experience in your sector, as well as their geographic connections, and how that can work for your business. Global connections are especially helpful. And do they usually work with businesses that are around the same size as yours?

• They will adequately prepare you and manage your expectations.

• They will work diligently to find the RIGHT buyer, not just the easiest or the richest.

• They should be honest, and you should trust them because they have demonstrated that they are worthy of it.

• Their track record will speak for itself. A quality business acquisition advisor is going to have a proven reputation, client testimonials, credentials, and accolades.

• Also, ask if they use any proprietary technologies or databases and how it helps them gain insight into specific industries.

Take your time in evaluating potential advisors. A good firm will patiently accommodate your process. You are going to be working closely with them through a grueling journey, so you will want to feel comfortable with their team and confident that they will work around the clock to get you the most favorable results possible.

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6 Books About Growing A Business That You Should Read

Growing a Business

By Paul Hawken

In this book, Paul Hawken explains how a successful business is an expression of the individual behind it, along with practical advice, common sense, and down-to-earth ideas. Even though it was written 30 years ago, it remains an excellent and very relevant read, backed by the fact that the author’s own companies are still successful after all these years.

 

Organizational Physics - The Science of Growing a Business 

By Lex Sisney

The author of this book spent more than a decade leading and coaching high-growth technology companies. In his work, he discovered that companies that thrive do so in accordance with six universal principles. The book covers a blend of important business and entrepreneurial topics in a manner that stands out from other business books.

 

Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

By Mike Michalowicz

In this book, the author offers principles to simplify accounting and easily manage a business through analysis of bank account balances. The theory is that a small, profitable business can be more valuable than a large business surviving on its top line, and those that achieve early and sustained profitability have a better chance of maintaining long-term growth.

 

Ready to explore your exit and growth options?

 

Explosive Growth: A Few Things I Learned While Growing To 100 Million Users - And Losing $78 Million

By Cliff Lerner

This best seller provides step-by-step instructions, case studies and proven tactics on how to explode business growth. It reveals the detailed growth frameworks that propelled the author’s small online dating startup to grow to 100 million users while coupling humorous storytelling with concrete examples.

 

Traction: How Any Startup Can Achieve Explosive Customer Growth

By Gabriel Weinberg

Traction is based on interviews with more than 40 successful business founders about their real-life successes. It covers 19 channels that can be used to gain traction for a business, and how to select the best ones for your company. The book discusses topics such as targeted media coverage, effective email marketing strategy, and online search optimization.  

 

Growing Influence: A Story of How to Lead with Character, Expertise, and Impact

By Ron Price and Stacy Ennis

Growing Influence is packed with relatable human experiences and practical advice on developing the right leadership skills. It chronicles two main characters’ growth as they applied the principles in the book, mixing solid business advice with a novel that is fresh, timely and inspiring.

 

Ready to Grow Your Business?

Contact us for help with unique growth strategies for your company and how we can partner for your successful future.

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Why Buy-and-build Strategies Work

What Is Buy and Build?

When private equity acquires a well-positioned platform company to acquire additional smaller companies, using the developed expertise in a specialized area to grow and increase returns, it is considered a buy-and-build strategy. This strategy is common with private equity firms with shorter holding periods of about three to five years.

Why It Is An Effective Growth Strategy

If a buy-and-build strategy is executed correctly, a great deal of value can be created when smaller companies are combined under the control of a new company.

  • This type of acquisition saves time regarding the development of specialized skills or knowledge, allowing for growth and expansion to other markets more quickly and successfully with lower production costs.
  • Creating a larger, more attractive company offers a path to exploit the market’s inclination to assign larger companies higher valuations than smaller ones.
  • It provides a clear plan when deal multiples are at record levels and there is a need for less traditional strategies.
  • Buy-and-build deals generate an average internal rate of return of 31.6% from entry to exit, versus 23.1% for standalone deals.

Ready to explore your exit and growth options?

Getting It Right

The buy-and-build acquisition is not simple to execute. The process demands meticulous planning and due diligence for the strategy to work. The best deals usually employ multiple paths to create value.

  • Synergy between the acquirer and the acquired is important to the outcome of the deal. Companies should target existing firms that will be a good fit as a team both tactically and culturally. The human element should always be considered.
  • The management team must be an appropriate fit and have experience with these types of transitions.
  • There should be a vision in place for where the company will be five years down the road.
  • The platform company must be stable enough to endure the process regarding operations, cash flow, and infrastructure (IT integration in particular).
  • Sector dynamics should also be considered. Avoid sectors that are dominated by low-cost rivals or mature, stable players. Focus on sectors with many active smaller suppliers and service providers. Consolidation should result in cost savings and improved service.
  • While no two deals are the same, there are patterns for getting it right. Those experienced with buy-and-build strategies are more likely to lead to a successful deal.
  • It can be difficult to identify private equity firms because of the nature of the way they do business. It helps to have an experienced M&A firm with extensive connections and a proven track record of negotiating successfully with buy-and-build-focused private equity firms.

These reasons are among several as to why it is a sensible decision to enlist the help of an experienced M&A firm such as Benchmark International for your vision for growth. Count on us to help you get your buy-and-build strategy done right.

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9 Ted Talks Every Business Owner Should Watch

1. Globalization Isn't Declining—It's Transforming
Arindam Bhattacharya

https://www.ted.com/talks/arindam_bhattacharya_globalization_isn_t_declining_it_s_transforming

Mr. Bhattacharya is a Boston Consulting Group Fellow, Senior Partner in their New Delhi office, and worldwide co-leader of the BCG Henderson Institute in Asia. Hear his interesting argument as to why globalization is not going extinct but instead is evolving due to cross-border data flow.

2. How to Build a Company Where the Best Ideas Win
Ray Dalio

https://www.ted.com/talks/ray_dalio_how_to_build_a_company_where_the_best_ideas_win

Mr. Dalio is the founder, chair, and chief investment officer of Bridgewater Associates, the largest hedge fund in the world. Learn how his strategies helped him create such a successful hedge fund and how you can use data-driven group decision making to your advantage.

3. Why the Secret to Success is Setting the Right Goals
John Doerr

https://www.ted.com/talks/john_doerr_why_the_secret_to_success_is_setting_the_right_goals

In this talk, engineer and venture capitalist Mr. John Doerr discusses the established goal-setting system "Objectives and Key Results," or "OKR," which is currently being used by companies such as Google and Intel.

4. The Global Business Next Door
Scott Szwast

https://www.ted.com/talks/scott_szwast_the_global_business_next_door

Mr. Szwast is the marketing director for UPS, and he has spent 25 years supporting the international transportation industry. In this talk, he explains how the image of global business is misunderstood and why businesses should stop hesitating to consider crossing borders.

Do you have an exit or growth strategy in place?


5. How to Break Bad Management Habits Before They Reach the Next Generation of Leaders
Elizabeth Lyle

https://www.ted.com/talks/elizabeth_lyle_how_to_break_bad_management_habits_before_they_reach_the_next_generation_of_leaders

Tune in as esteemed leadership development expert Elizabeth Lyle offers a new approach to cultivating middle management in fresh, creative ways.

6. Business Model Innovation: Beating Yourself at Your Own Game
Stefan Gross-Selbeck

https://www.ted.com/talks/stefan_gross_selbeck_business_model_innovation_beating_yourself_at_your_own_game

Mr. Gross-Selbeck is Partner at BCG Digital Ventures, and he has 20 years of experience as an operator and a consultant in the digital industry. In this talk, he discusses the unique aspects of today's most successful start-ups. Also, he shares strategies for duplicating their philosophies of disruption and innovation that can be applied for any business.

7. How the Blockchain is Changing Money and Business
Don Tapscott

https://www.ted.com/talks/don_tapscott_how_the_blockchain_is_changing_money_and_business

Mr. Tapscott is the executive chairman of the Blockchain Research Institute. In this talk, he explains Blockchain technology and why it is crucial that we understand its potential to redefine business and society completely.

8. What it Takes to Be a Great Leader
Rosalinde Torres

https://www.ted.com/talks/roselinde_torres_what_it_takes_to_be_a_great_leader?referrer=playlist-talks_for_when_you_want_to_sta

In this talk, leadership expert Rosalinde Torres describes simple strategies to becoming a great leader, based on her 25 years of experience closely studying the behavior and habits of proven leaders.

9. How Conscious Investors Can Turn Up the Heat and Make Companies Change
Vinay Shandal

https://www.ted.com/talks/vinay_shandal_how_conscious_investors_can_turn_up_the_heat_and_make_companies_change

Mr. Shandal is a partner in the Boston Consulting Group's Toronto office, leading their principal investors and private equity practice. Hear his chronicles of top activist investors and how you can persuade companies to drive positive change.

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How Seller Due Diligence Maximizes Business Value

Selling a company is a momentous life event for any business owner. You have worked hard to build it and want to achieve the highest acquisition value possible when you are ready to sell. To do this, you should be fully prepared for any prospective buyer to conduct rigorous due diligence, which means you should be prepared to do your own.

What is due diligence? A comprehensive appraisal of your business to establish its assets and liabilities and evaluate its commercial potential. 

If you carry out thorough due diligence before putting your company on the market, it will be primed and ready for the buyer to conduct their due diligence process. By being sufficiently prepared, your business is going to appear more attractive to buyers.

Planning Ahead is Crucial

First things first: plan ahead and plan early. Give yourself enough time to optimize the company’s value before putting it on the market. A carefully planned sales strategy is sure to garner better value than what appears to be a hasty fire sale. It is best to wait to sell until you have done everything that you can to maximize your company valuation. When you take the time to position your business attractively for the marketplace, it reduces the odds of a negative outcome.

Start by identifying the key value drivers for your business and how they can be improved. This will help you find obstacles to a sale before a buyer does, and give you time to address any issues. These drivers include:
• Skilled, motivated workforce
• Talented management team
• Strong financials and profitability
• Access to capital
• Loyal and growing customer base
• Economy of scale
• Favorable market share
• Strong products/services and mix of offerings
• Solid vendor relationships and supplier options
• Sound marketing strategy
• Product differentiation and innovation
• Up-to-date technology and workflow systems
• Strong company culture
• Research and development
• Protected intellectual property
• Long-term vision

It is common for buyers to be especially concerned with company culture and existing customer relationships. Make sure your employees and your customers know what to expect and share your vision. If there is misalignment in these areas, it can unfavorably impact the post-sale performance of the company.

Ready to explore your exit and growth options?
Why Documentation Matters

Having all your documentation in order, ensuring its accuracy, and putting it all on the table is going to make you a more trusted seller and increase the value of the business. It will also help you avoid constant back-and-forth requests from a buyer, which can be a distraction for you while you’re trying to run a business.

Creating a secure and efficient virtual data room (VDR) for storage and review of documents offers major advantages. A VDR is a secure online document repository that enables efficient collaboration between parties in any location so they may share information at any time during the pre-deal phase. A VDR also makes it easier to compile and verify every document internally and avoid duplicating efforts. Plus, it offers exceptional security to safeguard against confidential information ending up in the wrong hands. Once you have your VDR completed and vetted internally, you can open the files up to outside partners. Overall, the VDR is your secret weapon in making sure all of your documentation is centralized and that you are presenting your company in the very best light.

You can learn more about the documentation you will need to compile here.

Timing is Everything

You want to sell at the right time based on the market, which is always changing. Being adequately prepared to sell means being ready to act when the time is right. And selling at the right time means getting more value for your business.

Something else you must consider is if you are truly ready to sell. This is not the time to be emotional. Once you’ve initiated the sales process, the last thing you want to do is change your mind when buyers are already involved in the conversation. This will give you a reputation of being disingenuous and not being a serious seller, scaring off potential buyers in the future and devaluing your company.

Professional Help is Key

If it sounds like preparing for the sale of your company is an exhaustive undertaking, that’s because it is. But you do not have to do it alone. If you enlist the expertise of a reputable mergers and acquisitions firm, they can lead the way and help you get the most value for your company. A good M&A Advisor will know better than anyone how to steer you through the due diligence process.

They will also know when the market is in the right place for a sale, and give you access to quality buyers that you can trust. It is also important to note that buyers are going to take you much more seriously when you have partnered with a highly regarded M&A firm.

At Benchmark International, we’re here for you. Our experts are ready to partner with you to exceed your expectations and make great things happen.

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The Ultimate Cheat Sheet On How To Sell Your Business

Once you have decided that the time has come to sell your company, you will want to be as prepared as possible for the endeavor. Being adequately prepared will pave the way for a smoother process, avoid unnecessary delays in the sale, and increase the value of your business. Use this cheat sheet as a guide to get your business ready for what lies ahead.

Know Why You’re Selling

An important part of selling your company is having a clear understanding of why you are doing it.

  • Do you want to exit the business completely and retire?
  • Do you wish for it to be under control by family or an existing employee?
  • Do you hope to retain a stake in the business as part of the sale terms?
  • Do you plan to sell the business to facilitate its growth?
  • Do you aspire to sell the business to fund other ventures?

These questions should all be considered so that you have a clear answer before initiating the sale process. By knowing why you are selling, you can look for the right kind of buyer to suit those needs and establish a clear plan of action.

Compile the Proper Documentation

Any buyer is going to expect to see the facts and figures on your business. The more prepared you are to provide detailed documentation, the more likely they will be to trust you. Items you should compile and have ready for review include:

  • Current and recent profit & loss statements
  • Balance sheets, income statements, and tax returns for at least 5 years
  • Leases and real estate paperwork
  • A business plan
  • A marketing plan
  • Accounts payable and client lists
  • Inventory and pricing lists
  • Insurance policies
  • Non-disclosure/confidentiality agreements
  • An executive summary and detailed profile of the business
  • Employee, customer, vendor, and distributor contracts
  • Outstanding loan agreements and liens
  • Organization chart
  • Letter of intent and purchase agreement

Feel like it's a good time to sell?

Inventory Your Assets

Your assets are a key factor in determining the value of your company, so it is important to have a clear picture of what they are and what they are worth. Create a record of these assets, including:

Physical assets:

  • Business furnishings, fixtures, and equipment, inventory, real estate, automobiles

Intellectual property assets:

  • Trademarks, patents, licensing agreements, trade secrets, and proprietary technology

Intangible assets:

  • Brand equity, business name, and brand identity
  • Processes and strategies
  • Trained employees
  • Loyal clientele
  • Supplier and distribution networks

Enlist the Help of an Expert

Selling a business is a complicated process, and it is not as simple as just gathering the items listed above. This is why most business owners opt to partner with a mergers and acquisitions firm to organize a deal. They do all the work and tend to all the details so that you can focus on running your business and keeping it thriving in the wake of a sale. This includes finding the right buyers, creating a competitive bidding environment, and making sure you get the most value for your company.

Advisors such as our experts at Benchmark International have specialized tools at our disposal that are proven to maximize value for our clients and get desired results. Give us a call and let us put our connections to work for you.

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14 M&A Cartoons That Will Brighten Your Day

All images may be subject to copyright.

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Five Things I Wish Business Owners Knew Before Engaging Us

1. No one can control the market.

You can know it. You can be smart about what it will do, how it will react. But you cannot control it. The nearer into the future you look, the more of a feeling of control you can have. But the longer a business owner wants us to look into the future, the less valuable the insights. Things change. Interest rates move. Sectors fall in and out of favor. If you want me to try to control the market, please act quickly so that we are dealing with the current market, not some future version of the market.

2. There is no perfect buyer (or seller).

Everything in life involves tradeoffs. Your business, like the ones we will bring to you, has imperfections. I’m here to convince buyers to take a favorable view on your business – to trade off its defects against its outstanding features in a way favorable to you – AND to help you uncover and evaluate the buyer’s defects and favorable features. So … please don’t expect your business to be perfect and don’t expect us to bring you perfect buyers. One of the main reasons our business exists is because buyers – and sellers – are imperfect. If that were the case, you’d not need us.

3. Your priorities will change over the course of the company sale process.

This is not a bad thing. It’s a marvelous occurrence that is very satisfying to observe. It is an unintended consequence that will be of great benefit to you. What makes it problematic is when you don’t realize its happening AND when you don’t tell us its happening. As your broker, we are out there trying to achieve your objectives – as you’ve explained them to us. If we don’t know what you’re after, we’ll be after the wrong thing.

 

Ready to explore your exit and growth options?

 

4. We’ll give you plenty of feedback but we need feedback also.

We will start by proving you some feedback from our internal knowledge base and experience. We will then give you feedback from specific buyers and the market in general. In order to get the best result for you, we need that feedback loop to be a two-way street. We want to know what you think of each buyer, of our service, of your own business, of the market in general, and of the process. Both our process and the market are highly flexible and changes can be made to meet your needs and expectations, but only if we know they need to be made.

5. It’s a marathon, not a sprint.

Too many clients come out of the blocks at full speed. Many also tend to think the signing of a letter of intent is the beginning of the end but it is just the end of the beginning. Running out of gas is a big problem when it comes to getting deals closed. Some parts of the process require significant time and energy from you and others do not. In order to hit your goals, we’ll need you well-prepared for those stages where your input is crucial. The deficiency we most often see emerging during the process is not one related to energy or time but rather emotions. This is understandably a stressful process. It should be and we build our service model around that fact. And that emotional aspect of the process is the hardest one to deal with over the course of the lengthy process.  

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How Do I Know If I’m Ready To Retire?

Retirement is a significant decision that you have waited your entire life to make. Most people retire between the ages of 60 and 70, but everybody faces a different set of circumstances that dictate when they can retire. So how do you know if you are ready?

The most important factor in retirement is whether your financial situation will allow you to do so with security and peace of mind.

Do you have enough money saved? You want to live comfortably and maintain the standard of living to which you are accustomed. The last thing you want to do is retire and then realize you don’t have the means to live the way you are used to and end up having to downsize your dreams.

Are the markets in the right place so that you maximize your investment returns? Maybe your portfolio took a little bit of hit recently. Giving it a little time to recover can be a wise strategy. Consider where the markets are and where they are forecasted to be in the upcoming months. If you time it right, you can make the most of your decision.

Are you debt free? It may not be the smartest move to retire if you still carry debt you must pay, especially if it is significant. Retiring when you are debt free means retiring when you are worry free.

Do you need a plan to cut down on potential expenses? If you have a strong desire to retire but feel that you are not as financially confident as you would like to be, you can devise a plan to reduce your monthly expenses and ease some of the burdens.

Of course, there is more to the decision than just financial factors. You must consider whether you are mentally and emotionally prepared for retirement.

Are you no longer interested in pursuing career opportunities? If you are still hungry to attain work-related goals or you feel that you haven’t achieved everything you set out to achieve, then maybe retirement is not for you just yet. You do not want to retire and then feel that you are missing out or that you didn’t reach your full potential.

Do you find yourself thinking about recreational and social activities more than you are thinking about work? If you find yourself standing on the golf course, wishing you could spend more time there, then it may be a good time to consider retirement. Sometimes getting out before you are completely checked out is in the best interest of you and your business.

Do you have a plan for how you want to spend your time? It is not unheard of for people to retire only to become overwhelmed with boredom and a lack of purpose. Having a plan in place can help you stay busy and feel that you are achieving a new set of goals in life.

If you are retiring with your spouse, are you equally ready and on the same page when it comes to how you will spend your time? If you are in this together, make sure your plan is truly in sync. If one of you wants to travel the globe and the other one just wants to spend time with the grandchildren, there could be a conflict that you didn’t even realize you would have to address. Plan your vision for retirement together.

These are all critical questions to ask yourself when deciding if you are ready for retirement. But there is one more crucial question that you must address.

Do you have an exit strategy for retiring from your business? An exit plan is essential because it ensures that your business will make a successful transition into its next phase of ownership. Also, an exit plan will help you boost the value of your business so that you are prepared to sell at the ideal time.

Ready to explore your exit and growth options?
A proven strategy for success regarding exit planning is to partner with a trusted advisor, such as Benchmark International. We can help you find the right buyer, maximize value, and craft a dream exit that leads to a happy and satisfying retirement.

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Benchmark International Facilitated the Transaction of Master Printing Group to JAL Equity

Benchmark International has successfully facilitated the sale of Master Printing Group to JAL Equity. Master Printing is one of the Mid-South's leading marketing solutions providers. The company provides complete services from design and concept through the production of complicated collateral pieces. Additionally, the company operates a full-service graphic design, marketing, and advertising division as well as comprehensive direct mail services.

JAL Equity is a boutique private equity firm based out of Sarasota Florida and focuses on acquiring small businesses and operating them profitably over the long term. The company targets printing services, data services, direct marketing, and lead generation entities.

Ready to explore your exit and growth options?

Senior Deal Associate, JP Santos, added, "The Benchmark International team is incredibly excited about the future of Master Printing Group under the ownership of JAL Equity. The previous owners did an outstanding job of building a company with an impeccable reputation in the market, and a brand that was built over generations. Jon and Susan were a pleasure to work for, and we're excited about what the future holds for them both. JAL Equity has proven to be successful in this industry, and the corporate and cultural fit amongst the JAL Equity and Master Printing Group was apparent from the first conversation."

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10 Things Most People Don’t Know About The M&A Process

1. Most M&As Fail
According to collated research and a recent Harvard Business Review report, the failure rate for M&A is between 70 and 90 percent. To effectively complete a deal, there must be a clear strategy and open communication among all parties.

2. Expect Due Diligence
Experienced buyers conduct meticulous due diligence. They want to know exactly what they are taking on, and that includes factors such as obligations, liabilities, contracts, litigation risk, and intellectual property. As a result, sellers should be prepared to provide very thorough documentation.

3. Priorities Change
Your company may be a good strategic fit today, and in a year from now. But people are fickle, and priorities can change, so a good offer today could be a non-existent offer later.

4. Employees Will Have Questions
In any sale of a business, employees are going to have questions about how the transaction will affect them. Also, the buyer will want to know how specific issues are handled. Will there be layoffs? Have confidentiality agreements been signed? What about any stock options? How will management be changed? These are just a few questions that should be anticipated.

5. Don’t Overlook Technology
These days, virtually every industry is impacted by technology. In the M&A process, it is important to think about how IT platforms will be consolidated or integrated, how technological changes can affect inventory, and how cloud management will be used, among many other factors.

Ready to explore your exit and growth options?

6. M&As Are Often Funded by Debt
Low interest rates on loans encourage M&A. In 2015, acquisition-related loans worldwide totaled more than $770 billion, the most since 2008.

7. Competition Will Result in the Best Deal
The more bidders there are on a sale, the more favorable the conditions are for the seller to negotiate a higher price and better terms. Even if there is only one serious bidder among several, the perceived level of interest can lead to brokering a better deal.

8. Synergy is a Must-Have
For an M&A deal to succeed, vision and strategy need to be synergized at the executive level and communicated to all management. M&As can fail due to a misalignment of vision for the culture, the industry, each company’s role, and more. The cultural fit of two companies can be crucial to how successfully they meld.

9. It Can Take Awhile
From beginning to end, most mergers and acquisitions can take a long time to be completed, usually in a period of around 4 to 12 months. The length of time depends on how much interest the seller has generated and how quickly a buyer conducts due diligence.

10. You Need an M&A Advisor
An experienced M&A advisory team can help ensure that the complex process of selling or buying a company goes smoothly, addressing all of the issues mentioned above on this list.

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Benchmark International Facilitated The Transaction Of Am Engineering, Inc. To Fremont-Wright, LLC

Benchmark International has successfully facilitated the acquisition of AM Engineering, Inc. (“AME”) by Fremont-Wright, LLC (“Fremont-Wright”).

AME is a Florida-based business headquartered in Sarasota. AME specializes in civil engineering and land surveying projects for large and small-scale land development, water distribution systems, wastewater collection facilities, roadways, parking facilities, and site grading. AME offers both engineering and surveying services for residential and commercial clients. The sale to Fremont-Wright creates new growth opportunities for the business.

Fremont-Wright is a holding company based in Memphis, TN, and specializes in aerial and land survey, as well as civil and structural engineering. Its companies – Triton Engineering, I.F. Rooks, Colbert Matz Rosenfelt, and Harmsen – also offer services such as photogrammetry, environment management, volumetric services and utility design. Fremont-Wright serves the institutional, mixed use, commercial and residential industries. This acquisition fits well with Fremont-Wright’s continued nationwide growth strategy.

Ready to explore your exit and growth options?

Shawn Leins, president and one of the owners of AME stated, “We are excited to join the Fremont- Wright team and look forward to continued growth and success.”

Regarding the deal, Transaction Director Leo VanderSchuur at Benchmark International stated, “It was a pleasure to represent AME in this strategic transaction. On behalf of Benchmark International, we wish both companies continued success.”

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Benchmark International Facilitates the Acquisition of UBEO Business Services to Sentinel Capital Partners

Benchmark International is pleased to announce it has successfully facilitated the acquisition of UBEO Business Services to Sentinel Capital Partners.

UBEO, Benchmark International's client, headquartered in San Antonio, Texas, is a provider of best-in-class document management equipment and related services. UBEO facilitates business technology integration by offering the newest, best, and most innovative ideas in hardware and software solutions to its customer base of approximately 6,000 mid-sized businesses, schools, and municipalities. With a team of more than 225 salespeople, technicians, and support staff, UBEO sells and services globally-recognized copier and printer equipment in major Texas metropolitan markets and operates seven sales sites serving the San Antonio, Austin, Dallas-Fort Worth, and Houston metropolitan areas.

Jim Sheffield,President and CEO of UBEO, said "We are very proud of the reputation we have built. UBEO outperforms its competition in the service categories that our customers value most – technical capability, service quality, and on-time delivery. Partnering with Sentinel well positions us for our next phase of profitable growth."

 

Ready to explore your exit and growth options?

 

Sentinel Capital Partners is a private equity firm that targets investments in middle-market companies with strong management and attractive growth prospects. Sentinel looks to invest up to $175 million of equity in companies generating EBITDA of up to $65 million. Sectors of interest include business services/outsourcing, consumer products and services, food and restaurants, franchising, and manufacturing. Prospective transaction situations include management buyouts, recapitalizations, corporate divestitures, take-privates, and growth financings. Their motto is to provide "private equity to talented executives and helping them to build great businesses and realize their boldest dreams."

Scott Perry, a partner at Sentinel, explained "We are very excited about the acquisition of UBEO and partnering with a regional market leader with a stable, highly recurring business model, high margins and strong free cash flow characteristics. As the largest independent dealer in Texas, UBEO is a scalable platform and ideal for consolidating its highly fragmented industry. We are very pleased to partner with a highly experienced, talented, and strongly committed management team that has a proven record of profitable growth."

Sentinel Capital Partners has made several notable acquisitions in the last 12 months. Besides acquiring UBEO, Sentinel has made four other platform investments – Altima Dental, a leading dental services organization in Canada; Captain D’s, the leading franchisor and operator of seafood quick service restaurants; MB2 Dental Solutions, a rapidly-growing regional dental service organization with a unique physician-centric ownership model; and Nekoosa, a leading manufacturer of specialty paper and film products used in the graphics and commercial print markets. During this same period, Sentinel sold Checkers & Rally’s Restaurants, an iconic and innovative drive-thru restaurant chain; Huddle House, a leading franchisor of family dining restaurants in the Southeast; National Spine & Pain Centers, a leader in interventional pain management; Playcore, the leading North American designer, supplier of play, park, and recreation products; and WellSpring Consumer Healthcare, a portfolio of high-performing OTC healthcare brands.

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