Determining how to exit a business is a major event for business owners as it often represents an amount of money that will have a significant influence on their lives. It is a situation that cries for professional assistance, particularly if you consider the fact that only one in ten business owners has been through an acquisition, divestiture or transfer of a business before, yet many rely on an industry that uses a model that is inconsistent with the delivery of professional services.
After spending over twelve years working on the buy-side of business transactions, Michael G. Wolff, founder of M.G. Wolff & Associates, Inc., is all too aware of this situation as he found most business sellers were overcharged and underserved when exiting their businesses. Therefore, he designed the DoneDeal Exit Plan™ and the DoneDeal Brokerage Plan™, which changes the nature of the seller – broker relationship in a way that encourages value add services and the potential for a substantial reduction in transactional expense. That’s right, greater value at a lower price.
Email mikew@mgwolff.com for more information
MG Wolff & Associates, Inc.
Our mission is to help individuals build net-worth and harvest business equity. Our services support critical transitions related to business acquisition, growth and divestiture.
Please explore our site to learn more about our wealth building and business transition services, including our DoneDeal Exit Plan™
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From Spring 2008
5 Simple Things You Can Do Today That Will Pay-Off Tomorrow
If you plan on selling your business in the next three to five years, you will want to consider the following five value builders or you may end-up leaving a lot of money on the table. They are not difficult or costly to do, but you have to start now or you may miss-out.
One of the simplest, but often overlooked, tactics is to get audited financial statements. It may seem like an extra expense, but perspective buyers want security and managing the perception of risk is the key to getting a good price. Audited financial statements lend credence to the numbers and imply managerial integrity.
Another significant risk factor for prospective buyers is the potential inability to manage the business, particularly if it is technical. Well documented processes, administrative procedures and technical data can provide a great deal of comfort for a potential owner. Franchising illustrates the value of “turn-key.”
How assets are held and the legal structure of your business will have a major impact on your final tax bill. However, changes in these areas must often be made years before the event to be effective. So, look at asset ownership and legal structure issues now, before it is too late to do you any good.
As they say “looks do matter,” and nothing screams old and stale like offices with reference books from the eighties and old computer equipment from the nineties. Having worn-out equipment and a junked Ski-Doo in the shop doesn’t help either. Clean, paint and fix everything you can, and throw the rest away or move it to a different place. Not only will you have a nicer environment in which to work, you will be sending a positive message to anyone visiting your facility.
Finally, update critical agreements. The last thing any new owner wants to face is an immediate increase in costs. Pricing arrangements, lease agreements and distribution contracts should all be updated, particularly if they create no liability to the business. It is another step towards offering a predictable, turn-key business.
The bottom-line is that perceived risk is the most variable determinant of business value. Unlike financial statements, business location, and other facts, risk is perceived and subject to influence. Start reducing the perceived risk associated with your business today and you will put more money in your pocket tomorrow. It is easy to get started now by employing any or all of the above simple, but proven tactics. (Newsletter/Archive) (Home)
