24 Feb Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from Divestopedia entitled “3 Simple Ways to Start an Exit Plan in 2021” discusses the process of selling a business. This process takes significant time and planning in order to achieve a successful outcome.
When getting your exit plan started, consider the following tips:
- Establish your objectives – what does the transaction look like, how much do you need, what are you going to do after, when do you want it to happen
- Discuss your plans with a trusted advisor such as your lawyer or accountant
- Get a valuation so that you know what the business is worth and if you need to make changes to increase value
A recent article from Harvard Business Review entitled “How to Capitalize On the Coming M&A Wave” discusses the expected imminent surge in M&A activity that many in the industry are talking about. As the economic effects of COVID-19 continue, some business owners will decide to sell while others will decide to grow via acquisition.
The reality is a lot of mergers and acquisitions are not successful, instead hurting shareholder value and costing significant money. So what can business leaders do to set themselves up for M&A success?
- Avoid prioritizing a strategic move over financial sense
- Identify and plan for cultural differences
- Have a non-biased and non-incentivized party perform a valuation
- Assign the same team members to pre-deal, transaction and post-deal
- Move with speed and communicate well
A recent article from Transworld Business Advisors entitled “Can I Sell My Closed Business?” explores options for business owners who have decided to close their business. One might think that closing is the end of the line; however it is still possible to sell the business.
With a business that has closed, it is important to understand that you likely will have to sell the assets at a discount. However, there may still be buyers willing to make a deal. This is where you need to be able to communicate previous success and future potential.
A closed business still has value in the form of goodwill, client lists, inventory, market share, equipment, etc. Identify these assets and present them to buyers who are a logical fit. A business broker can help you with this process.