A potential client once told me, “I will exit my company when I know the time is right.” When I followed that comment with a question regarding how he would know that the time is right, the answer was, “I will just know.”
Unfortunately far too many entrepreneurs use their gut when it comes to exit planning. Although this method may work for many business decisions, when it comes to monetizing their largest asset, most M&A professionals counsel a more contemplative approach.
Sadly, the reality is that far too many business owners “know when the time is right” because external circumstances force their hand. When one of the big “D’s” hit, you know the time is right:
These five are usually nearly impossible to predict but when they hit, they hit like a ton of bricks and going back once they hit is usually not in the cards.
Generational Equity, a leading M&A advisor to owners of privately held companies in North America, advises you to take a far more planned approach to your exit to ensure that your timing coincides with two things:
Taking these in reverse order, the reality is most privately held companies suffer from some or all of the following:
The good news is that each of these can be ameliorated if addressed strategically. You simply have to acknowledge that your business has an issue and then take logical steps to focus on them.
As for buyers being active, the fact is we are in the midst of one of the strongest seller market trends that we have seen in years. Although larger deals were impacted earlier this year because of uncertainty regarding the pending election cycle, the lower middle market has stayed fairly resilient.
Given the uncertainty regarding the long-term impact of Brexit on the U.S. economy, it is clear that the Fed will not be raising interest rates this year, which is positive in the deal-making world. Given the capital available on corporate balance sheets and committed to private equity, we anticipate this market should remain prime for business owners who are ready to exit.
The key word in the phrase “exit planning” is planning. As the famous author Lewis Carroll once said, “If you don’t know where you are going, any road will get you there.” This is applicable to the path far too many business owners are on when it comes to exiting their companies. Unfortunately it is not a topic that is focused upon because most business leaders are simply too busy operating their companies to spend a significant amount of time to consider how and when they want to exit.
This is one of the reasons we work so passionately to get business owners to attend our exit planning seminars: Far too many companies are simply not prepared for the owner’s departure. We believe that over the next 10 years we are going to witness the largest transfer of generational wealth ever seen in modern history as baby boomer business owners hit retirement age. As more and more reach the realization that their financial security is largely tied to one illiquid asset, they will soon realize that an effective exit strategy is needed.
This is where our M&A seminars come in. These are highly educational, led by seasoned M&A vets who in a few hours of time impart a significant amount of knowledge to our business owner attendees regarding how and when to exit for the most profit.
If you are interested in learning how you can attend, please call me at 972-232-1125 or email me at firstname.lastname@example.org. And no matter what, don’t make the fifth mistake covered in this publication and sell when the timing is not optimal – due to being forced by external circumstances beyond your control.
Carl Doerksen is the Director of Corporate Development at Generational Equity, part of the Generational Group.
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
Generational Capital Markets, Inc.’s affiliates are all part of one corporate family, they work with one another and may work together to provide services to you. The sharing of your information among affiliates enables Generational Capital Markets to serve you more efficiently and makes it more convenient for you to do business with Generational Group. Generational Capital Markets is permitted by law to share information with its affiliates. All of our affiliates follow similar privacy policies.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Generational Capital Markets, Inc. ("GCM"), member FINRA/SIPC, is wholly owned by Generational Capital, LLC ("GC"). Both GCM and GC are affiliated with Generational Equity, LLC; and all part of the Generational Group of companies. This website is solely for general informational purposes and is not guaranteed by us to be accurate and complete statements of fact and should not be relied on as such. Opinions in this website constitute the current judgment of the author as of the date and its last update. The content of this website does not necessarily reflect the opinions of GCM, and is subject to change without notice, and GCM is not under any obligation to update or keep current any information contained herein. This website does not constitute any personal recommendations and does not take into account the specific investment objectives, financial situation or particular needs of the reader. The information contained in this website should not be construed as an offer, or a solicitation of an offer, to buy or sell any securities or other financial investments. The information presented should not and cannot be viewed as an indicator of future performance. To the extent permitted by law, GCM does not accept any liability arising from the use or retransmission of the information in this website.
Furthermore, all information contained within this website is the property of Generational Group.
Honored to win Investment Banking Firm of the Year 3 years running.
Over 50 awards and counting.
Sign up to receive regular email updates, industry-leading insights and details on complimentary M&A executive conferences in your area from our award-winning team
Success, you have been added to our list.