Most business owners fail to realize they must plan for the sale of their business. According to recent statistics, only 20-33% of business complete the sales process. A study conducted by ROCG, a company that specializes in business transitions showed 84% of the respondents to their survey indicated that the proceeds from their transactions were essential to their future.
Topics: selling business action plan
Topics: sell your business, business valuations
If you have resolved to make your company more valuable in 2017, you may
want to think hard about how your customers pay.
If you have a transaction business model where customers pay once for what
they buy and do not return, expect your company’s value to be a low single-digit multiple of your
Earnings Before Interest Taxes, Depreciation and Amortization (EBITDA).
If you have a recurring revenue model, by contrast, where customers subscribe
and pay on an ongoing basis, you can expect your valuation to be a multiple of
your revenue.
Topics: Recurring Revenue
Companies owned by professional investors usually put in place a strategic plan to build their organization and its public profile. Their intent is to maximize returns upon the eventual exit of its investors. All major business decisions to pursue acquisitions or investment in facilities, geographic or product expansion, technology, systems, personnel, etc. are influenced by the short and long term goals of ownership and the strategic plan. The management team and their advisors are familiar with the preparatory steps necessary to position the company for an eventual transaction. They each play a part in building the company’s profile so that it is appropriately positioned when it is time for an investor exit.
Topics: Selling your business, pre-sale strategies, selling
Less than 25% of small businesses ever sell. Engaging an exit planning advisor can be the difference between liquidating and maximizing the after-tax return from the many years a business owner has invested in building and running the business.
Topics: business planning, wealth management, entrepreneurial opportunity, business valuations, trusted advisor, exit planning
I had the pleasure of working with Kevin Freeman on a deal. As a transaction advisor, I found Kevin to be very efficient, knowledgeable, and committed to serving his client’s interest in the most professional manner. This was evident when he encouraged his client to walk away from a deal when the client was ready to settle primarily out of frustration. Obviously this put Kevin’s commission at risk, but it was the right thing to do. It is always encouraging to work with another transaction advisor and to leave the experience knowing that he is representing the business brokerage industry well. I would gladly work on another deal with Kevin and would recommend business owners to trust him with the responsibility of selling their companies.
The US economy is driven by entrepreneurs - small and mid-market businesses, more than 20 million of them, many of them privately-owned. It is often difficult for owners to convert all of their hard work and ingenuity into an equity event. It is a complex and time-consuming process. Stony Hill Business Brokers has the experience and expertise to assist with selling a private business successfully.
All of the partners at Stony Hill Business Brokers have been entrepreneurs in private businesses and have had experience managing and selling their businesses. We understand the grind of running your own show and the uncertainty of getting the most value for the business.
© 2017 Stony Hill Advisors