It’s best to plan at least 2 to 3 years ahead of your target sale date to get the most for your business. Any one of our Apex Business Advisors can give you some assistance and guidance in preparing your business for sale.
Fairly often, we get approached to assist in a transaction that is already well down the road. Certain agreements have been made, and expectations are set. In many instances a buyer and seller have a relationship by virtue of being an existing customer, family member, friend, or partner. Over time the two sides have come together to discuss a potential deal and decide on price and terms. This might include a partnership’s buy/sell agreement.
Emotions are in play, trust has been developed, but generally there is a winner and loser because the parties don't ask for outside assistance at the proper time. Due to the existing relationships, the tough questions don’t get addressed, the value doesn't get analyzed, and due diligence might get waived. Someone in the deal is either paying too much for the business or getting a steal. In either situation there are going to be hard feelings and maybe future legal challenges.
The easiest way to make a deal happen and to improve the odds of a good deal for both sides is to have a third party review the proposed transaction, facilitate discussions, test the value, and bring professionals that are familiar with how to get deals done.
A third party could be an M&A professional, mediator, or neutral attorney. Keep in mind that whomever you bring in to help with a deal needs to have years of experience doing transactions and can familiarize both sides with the process of buying and selling businesses.
Before you agree to a value on the sale or purchase of a business, contact Apex Business Advisors. Any one of our team members would be happy to discuss your situation and assist you in your review.
We have met with several business owners this week that want to discuss their plans to sell. (The business owners have generally been referred by financial planners or attorneys that have been involved with their estate planning). Retirement is upon them and they haven’t planned for it and don’t have a good idea of their businesses’ value. It only takes 3 to 5 years to fully prepare your business for sale to increase the likelihood of a sale and to get more for your retirement.
We want to meet with any business owner well ahead of retirement (or burn-out) to discuss their options. This is a free service, so please contact an Apex Business Advisor for assistance.
Contact your Apex Business Advisor to review your business to determine current market value.
"Nearly half of the 799 small-business owners surveyed in August by The Wall Street Journal and Vistage International, an executive-mentoring organization, expect to retire after age 65, with 38% saying that their planned retirement date is later than they had predicted five years ago. In addition, 56% said most of their retirement nest egg is tied to their business."If you found yourself at retirement age with only one, privately owned, non-public, illiquid stock in your portfolio, how would you feel? Did your stomach just turn into knots? Well, if you are owner of a small business, you may easily find yourself in this scenario. To counter the risks here, you need to make sure you are in a position to sell quickly, at a high price, and on your terms.
As was mentioned on the last blog, there has been a bit of uncertainty and nervous energy focused on the fiscal cliff. Well,the cliff was averted for most people, and the wealthy weren't guillotined. The stock market responded favorably. Since the new laws were made permanent we can now focus tax planning...
This article from Entrepreneur magazine is a really good summary of the tax rules that were negotiated last week.
If you are a business owner or plan to be, or plan to sell your business, this will be of particular importance to you. As always, check with your accountant to determine the impact on your personal situation.Call your Apex Business Advisor to assist with your exit strategy.