Exit and Growth Strategies for Middle Market Businesses

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Succession Planning – What is on the Mind of Today’s Small Business Owner?

By Patrick Powell | Jul 25, 2013

Money GraphIn the wake of the last recession, for most business owners the question is:  How many more recessions do I have left in me?  (i.e. How many more recessions can I personally stand?).  After all there is a toll beyond the financial challenges for most business owners.  It would be nice to know when the next recession is coming.  Naturally, we do not know.  So the next best questions is…”Where do I want to be when the next recession comes along?”

As most business owners know, a recession is no time to sell a business.  Especially when, like the last recession, the recession is accompanied by a banking liquidity crisis.

But what about now?  Has there been sufficient passage of time to return to normality?  In fact, all businesses respond to their own industrial cycles.  Some industries remain under significant strain from the past recession.  Others have already seen their businesses grow past pre-recession levels.  For example, if you are in commercial real estate or coal mining, your business may still be at historically low levels.  However, if you are in manufacturing related to the automotive industry, aerospace, or food products, you have likely experienced strength and growth in your business. Read more »

7 M&A Don’ts for Business Sellers

By Patrick Powell | Aug 15, 2012

If you’re a business owner, in all likelihood at some point you’ll become a business seller. When that time comes, as you ready your business for sale, keep in mind these key “DON’TS.”

DON’T think that selling a company is easy, because it’s not! Plan to devote a considerable amount of time to the selling process. A transaction may take six to twelve months or longer from start to finish. It may be in your best interests to hire a professional M&A advisor to guide you through the process. A seasoned intermediary knows alternative ways of structuring a deal, how to bridge gaps between buyers and sellers and will identify the qualified prospective buyers pool.

DON’T assume that a buyer who approaches you is the best candidate. A discreet and careful screening and canvassing of the market is the only sure way to ferret out the right purchaser – the buyer who needs your business and will pay a fair price for it.

DON’T take for granted a prospective buyer’s claims that financing isn’t an issue. Instead, be certain that you are talking to a firm that can demonstrate its financial capabilities.

DON’T expose yourself and your company directly to the marketplace. Confidentiality is a key concern with employees, customers and competitors.

DON’T negotiate directly, but through an intermediary who can mediate, act as a buffer, and carry on “sidebar” conversations. This will allow you to continue the day to day operations of your business.

DON’T let too much time elapse between meetings with an interested buyer. Once the process starts, keep it moving, or you may lose momentum and affect your business and the morale of your employees.

DON’T delegate important aspects of the deal to subordinates – and don’t let the buyer do so either. It is important for key players to stay in touch and to develop confidence in each other, and work directly with the investment banker who will keep the deal on track.

How to Sell Your Business at Full Value

Posted by Patrick Powell.

Things to Know When You Sell Your Business to a Private Equity Firm

By Patrick Powell | Jul 01, 2011

Private Equity tips for business sellersAt our recent Winter Conference in Scottsdale, a select group of private equity firms participated in a discussion on the state of the M&A Industry, both from a current prospective and looking forward to 2011 and beyond.  Although each participant had a slightly different point of reference, there were definite commonalities that bode well for middle market companies.  The discussion included how private equity selects their portfolio companies, multiples, financing, due diligence and “deal killers”.  I wrote a summary of our discussion and it appears in the most recent edition of our Client Newsletter Capital Ideas.  Use this link to read the article in its entirety.

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Posted by Patrick Powell.