Category: Exit Planning

Buying & Selling a Company, Exit Planning

How to Get a Company Ready for Sale

Gregory Pearl

Your company is your most valuable asset. You have spent years creating, building, and nurturing it.  It is your life’s work.  And now may be the time when you are thinking about selling it. There are probably many reasons for this, but the time is right.  There is one thing for sure. Selling a company can be a long and complex process. Here is some of what you will need to do to get your company ready to sell.   Each business is unique and will require specialized actions particular to them. So what we are saying here is generally what…

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Exit Planning

Succession Planning is Not Exit Planning

Gregory Pearl

We talk a lot about exit planning for business owners on this site. Exit planning terminology can be a little confusing and have different meanings depending on who is being asked. Sometimes it goes beyond just the terminology to how the terms are related, meaning embedded in each other. Many business owners believe exit planning is the same thing as succession planning. But these are two different concepts, related but different. To make clear what each is and is not, here are some descriptions. Succession Planning identifies owner and management successors for a business. It also provides the identified successors…

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Buying & Selling a Company, Exit Planning

The Best Time to Sell Your Business?

Gregory Pearl

Everyone wants to sell their business for the best price possible.  Doing so is a gigantic achievement.  It also true that you cannot get the best sales price for your business without working closely with your advisors.  You and the people helping you must be a team.  And it is up to both of  you – the business owner and the advisors – to allow the sale for the highest amount to happen. The timing of the sale will also allow you to get the best possible price.  Here are some factors to consider when trying to sell your business.…

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Alternative Investments, Buying & Selling a Company, Exit Planning

Are Private Equity Groups For You?

Gregory Pearl

In recent decades more and more capital has flowed into the alternative investment category of private equity or Private Equity Groups (PEGs). Maybe because of this higher profile, we get asked repeatedly by business owners in the lower middle market if they can sell to a private equity group. I’ll say this right up front – most likely the answer is no. Private equity investments have traditionally been focused on large companies, the so-called middle market and especially the lower middle market have been ignored. That has changed in recent years as more capital has entered this investment category. Seeking…

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Buying & Selling a Company, Exit Planning

Should You Use An Intermediary Or Investment Banker?

Gregory Pearl

What are the situations that the sellers of privately held businesses should turn to intermediaries for help? Is there a company that is too small or big to use an investment banker? How does an intermediary – a business broker or investment banker – add value to the process? The simple answer is almost always. For large companies, an investment banker will add much value and are almost always used. The intermediary/investment banker will do all of the preparation work, the modeling, the valuation, the offering memorandums, and so on. The large companies, despite their resources, almost always outsource all…

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Buying & Selling a Company, Exit Planning

What Exactly, Is M&A Due Diligence?

Gregory Pearl

The dictionary definition of due diligence is “research and analysis of a company or organization done in preparation for a business transaction.” Basically, a buyer will conduct due diligence before the Purchase Agreement is signed to make sure they are buying what they thought they are buying.  This goes beyond just reviewing documents and contracts. With so much is at stake for the buyer in a M&A transaction, they will want to have all the facts and information available before making a final decision and going ahead. In the due diligence process, the seller will receive a long list of…

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Buying & Selling a Company, Exit Planning

Pitfalls In Selling An Independent Business Or A Divestiture

Gregory Pearl

Many of the posts on this site involve discussions about selling a business. The last few posts have been about selling a business unit that is part of a larger company.  A divestiture. Selling a business and divestitures have both similarities and differences.  But maybe more similarities than differences. Here are some common pitfalls that apply to both. Not being familiar with the process. Senior managers and equity stakeholders may not recognize the amount of work required to conduct a successful sale or divestiture. The tone for the project must be set early on and those managing the project need…

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