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With market uncertainty increasing, when to engage with a Merger & Acquisition(M&A) Advisor is becoming even more important. Our firm often comes across business owners who could have made key strategic changes years ago that would have made the ownership transition much smoother and more profitable at the closing table. Because market and industry conditions fluctuate, many times the advice these owners received set unrealistic expectations that could have been avoided if they had met with M&A Advisor earlier. In our monthly update, we outline reasons why business owners should engage with an M&A Advisor earlier in the process. Preliminary

In the evolving world of business transactions, there remain 3 general types of professionals who play a critical role in facilitating successful transactions: Business Brokers, M&A Advisors (Mergers and Acquisitions Advisors), and Investment Bankers.  While these professionals often work in similar areas, they differ significantly in their roles, expertise, and the types of transactions they handle. Understanding these distinctions is essential for owners seeking assistance in buying, selling, or merging with other entities. Business Brokers Business brokers assist in the buying and selling of small businesses with the focus primarily on transactions on the lower end of the market under

In an uncertain economy, selling a business can be a challenging endeavor. One critical factor that can significantly impact the sale process is the pricing strategy. Overpricing a business in the hopes of the numbers “catching up” with the asking price may seem tempting, but it can lead to adverse outcomes.  The following are the potential negative consequences to consider and the importance of setting a realistic and competitive price. 1) Prolonged Time on the Market Most buyers, especially in times of economic uncertainty, are cautious and diligent in their investment decisions.  If a business is priced too high, it quickly becomes

Success Fees When Selling a Business The continual upheavals in the market today have forced many business owners to re-evaluate their expenses. In many cases, those expenditures that are not directly related to revenue are decreased such as marketing, training, and hiring budgets. When it comes to selling a business, it is hard not to get caught into this same mindset. Comparing firms can be confusing when each firm has a similar sales pitch. Yet, the way a firm negotiates success fees with an owner upfront can provide some insights into how they will negotiate the business transaction. Our firm

The recent bank collapses have triggered large waves of additional uncertainty throughout our economy, already weakened by increasing inflation and interest rates. While our firm represents primarily lower middle market, privately held businesses, these unexpected shifts in the banking system have had direct impacts on the sale of businesses regardless of the size. Yet, even before these recent disruptions, buyers have become increasingly more meticulous in scrutinizing financials during the due diligence process. If you are an owner considering the sale of your business within the next few years, we recommend that you start working with your accountant to actively

Our firm meets regularly with business owners who have had their businesses valued by a 3rd party. While these valuations can provide some good insights, invariably, the valuations often don’t adequately address the intangibles in the business that go beyond the financial statements. Of course, there are exceptions, but too often 3rd party valuations fail to address some key areas that significantly affect the market value of a business. Below are a couple key questions a business owner should consider when obtaining a business valuation. How are trends in the last 2-3 years applied? Prior to the pandemic, trends over

When an offer is presented to a seller, how the buyer plans to address working capital is an important consideration. As the cost of capital has increased over this past year, working capital has become more and more of a negotiation point between buyers and sellers. Without a good understanding of the working capital requirements for a particular business, sellers could be leaving their hard-earned money at the closing table. Below are a few key questions to consider when addressing working capital in a transaction. 1) How is working capital calculated? To understand why working capital can be hard to