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
To Hold or Fold? Inquiries Suggest More Owners Facing Exit Dilemma
The increasing number of inquiries from business owners feeling the pinch of declining profitability and negative cash flows is evidence of current economic conditions, particularly the housing market. Of course, these owners are worried about funding losses and want to know the value of their business to determine if they should consider selling it. Answering this question is not always easy, but my experience suggests exploring options early-on is the key to a successful outcome.
My recent conversation with “John” is a classic example. He worked in a family business, a manufacturing/installation company, for most of his life and obtained ownership about ten years ago. He will tell you he is a conservative guy that has paid-off all his debt and owns his building free and clear. His position is one to which many aspire, but the dilemma he is facing is not.
With business down and a series of losses from bad debt, “I’m looking at the worst losses in company history,” exclaims John. “I don’t know how much I want to fund out of my own pocket, but I question the timing of selling now,” says the sixty-something owner.
Though his situation isn’t unusual, in my experience, his taking immediate action was, and it will likely be the difference between survival and failure. So often by the time an owner comes to us, it is too late to help. Many owners fail to address the situation and wind-up with a run-down business burdened by excessive debt.
What makes this particularly frustrating is that, as the story unfolds, you inevitably discover they are needlessly going down the same bankruptcy path as others before them, almost like cattle to the slaughter house. Of course, not all companies can be saved, but many can be sold while they still have value or be kept afloat through proven turnaround methods, yet instead they wind-up in bankruptcy court.
It is easy for business owners facing profitability or cash flow issues to learn about their options and it doesn’t have to be costly. Most business brokers and intermediaries, including us, will give you an idea of the value and marketability of your business for free. And, a turnaround specialist will typically provide an initial consultation free of charge as well. So, successfully managing through difficult times is really about acknowledging the situation, taking the time to develop options and being willing to make tough decisions when necessary.
If you would like referral for a turnaround specialist, you can email me at mikew@mgwolff.com or you can contact the Turnaround Management Association, at TMA, Upper Midwest Chapter PO Box 27415 / Golden Valley, MN 55427phone: 612-708-0258 / fax: 763-533-2144 Brenda Ryan, Administrator. (Newsletter/Archive) (Home)
