“So, who is the best buyer for my business?”
We get this question all the time at our educational exit planning conferences from business owners preparing to sell their company. At that point, it is far too early for us to answer because we need to spend several weeks getting to know the business through our in-depth evaluation process.
And, on top of that, we prefer the term “optimal” rather than “best.” Best implies perfection and that is hard to find in any business transaction. Optimal means the deal accomplishes the goals of both parties, a win-win all around (or as much as possible given that, in negotiations, each side must compromise a little in most cases to get an agreement completed).
So the answer to the question of who is the optimal buyer for your business is this:
It all depends on your personal financial goals, your goals for the company, and finally, what the buyer brings to the table, not only financially but also synergistically.
The first two factors you control; the latter is vital but really boils down to how good a fit you see between your company, your employees, your customers and the buyer. But let’s take each of the items above separately.
First, we highly recommend that you meet with your wealth manager long before your deal closes to determine how much you will need post-close to maintain your current lifestyle. Unfortunately, far too many wait until after selling their business and are disappointed to learn that if they had held the company a few more years and implemented some growth plans, they may have received more.
Side note: This is why the services of Generational Equity are so critical to our clients. Our first step is a thorough and complete valuation of the business to determine the current business enterprise value (BEV). This is based on the significant recasting and research we do on your business.
From this valuation, in addition to the BEV, flows our Roadmap for Enhancing Value. It provides you with concrete ideas and strategies about how to grow the business so that if the current BEV does not meet your financial goals, you may be able to eventually reach that number.
So two key points: In order for your wealth manager to create a plan for you, it is vital to know the BEV of your business and to determine if that meets your financial needs. If not, you need strategies to grow, which professional M&A advisory firms like Generational Equity provide.
It is very interesting to see the motivations of our clients change as they move through our process of selling their business. For most, at the beginning of the process the attitude is this: Get me the biggest deal and I will take it immediately.
However, after 3-9 months with us, as they really think about their exit, quite often they are willing to take less money if the buyer is willing to maintain or grow the legacy left behind for the employees and the community. This is especially true in 2nd and 3rd generation families. Often the history and preservation of the name, reputation, and opportunities for key employees become paramount.
You should carefully consider the legacy you want to leave behind as you contemplate your exit.
Because that leads us to the final point: synergies with the buyer. The new owners do not only have to be able to afford the deal, but their management style should also meld with how your company currently operates and thrives.
Sometimes we have clients walk away from deals because they simply do not like the potential buyers’ attitudes, manner, and style. Others will take substantially less in the transaction because they really like the buyer and his team, and can see the business thriving under him/her.
Get to know your buyer. Interview them. Find out what makes them tick and if the culture you have worked so hard to create will flourish under them.
This, in a nutshell, is your optimal deal:
If you can find these three features in a deal, you have done well indeed!
Frankly, these are the types of transactions the dealmakers with Generational Equity focus on finding for every client we engage and take to market. Our team has a proven track record of success that is second to none. That is probably why we have been recognized by our peers so many times over the past several years:
If you would like to learn more about creating an optimal deal for you and your company when you decide to sell, you should set aside time to attend a Generational Equity exit planning conference near you. Completely complimentary and highly educational, you will gain a wealth of knowledge about creating optimal deals. Call us at 972-232-1121 or visit our website to learn more.
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2018 Generational Equity, LLC. All Rights Reserved.
The information we learn from customers helps us personalize and continually improve your experience at gencm.com. Here are the types of information we gather.
Information You Give Us: 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. Our computer system protects personal information using advanced firewall technology.
Information from Other Sources: 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 Capital Markets LLC 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 Capital Markets, L.L.C. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Capital Markets LLC at is 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 IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Capital Markets may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Capital Markets 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 Capital Markets will be deemed NOT to be confidential. By sending Generational Capital Markets any information or material, you grant Generational Capital Markets an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Capital Markets is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Information Generational Capital Markets 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 Capital Markets intends to announce such products, programs or services in your country. Consult a Generational Capital Markets representative for information regarding the products, programs and services which may be available to you.
Generational Capital Markets makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Capital Markets web site, please understand that it is independent from Generational Capital Markets, and that Generational Capital Markets has no control over the content on that web site. In addition, a link to a non-Generational Capital Markets web site does not mean that Generational Capital Markets 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 Capital Markets 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.
Furthermore, all information contained within this website is the property of Generational Capital Markets.
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.