Many of the brightest visionaries and business owners I know have gotten to where they are on pure grit, intuition, and hard work. However, the time comes when they are ready to reach even higher heights, and leveraging data into information can supercharge the journey. 

Shifting from collecting under explored data to arming you and your business with this predictive information empowers you to tweak your business operations in real-time rather than waiting for next month to see your financial results or worse yet never doing this analysis in the first place.

You’ve accomplished everything you set out to do; probably more. Now you’re ready to exit the business you’ve built from the ground up,

After reviewing your options, you’ve determined the best decision is to run a formal sale process to fetch the best offer for your company. Under this scenario, for a variety of reasons more than ever before, your most likely buyer will be a “financial buyer”. Let me tell you who this buyer is, and what they are looking for in your business.

The guiding principals you have used to run your business successfully are not always the most helpful when it comes to selling your business. Let us help you offset your company’s earnings volatility by moving from cash to accrual accounting, and learning to really understand your financial statements.

Lately though, you’ve been turning your attention to some bigger questions. The status quo isn’t working for you anymore and you’d like to shake things up. You keep posing a question to yourself, “Should I grow this thing? Or should I sell the company and move on?” You’re just not sure, but you know it requires some exploration. Putting your head in the sand will only hold off the inevitable for so long.

When it comes to these questions, you need a different skill set from your current internal capabilities. Navigating through these waters is much different from your day-to-day accounting and finance processes. It might be time to think about a Transactional CTO.

EBITDA is an acronym for Earnings Before Interest, (Income) Taxes, Depreciation, and Amortization. You won’t find it listed on standard company financial statements, but you can calculate it from them. EBITDA is a very rough calculation of the cash flow generated by your business operations.

When it comes to selling debt or equity in your business it’s important to note that EBITDA comes in many flavors and will be a critical metric in any discussion.

After reviewing your exit options, you also decided to sell to the highest bidder. You feel the release of this decision to sell. Now what do you do?

Do you put up a for sale sign on the front lawn? Do you put an ad in the newspaper? Do you create a website? Of course not. In order to get the best offer, you’re going to need to engage an investment banker who specializes in the sale of businesses like yours.

Chances are you’ve never engaged an investment banker before now. Most people haven’t. Here’s what you need to know.

While owners of cash rich businesses tend to place a limited financial burden on their companies, enabling strategic operations, strong vendor and customer relationships, and plenty of negotiation options, owners of cash poor businesses tend to place a heavy financial burden on their companies, forcing expedient and shortsighted decision making that often creates rifts with customers, vendors, and employees.

The cash rich/poor dichotomy can become stark in the case of selling your business.

Given that you as the seller plan to no longer own the business, you would probably like to leave as little money behind as possible. In a typical transaction it is not uncommon to see 10% or more of the purchase price held back in escrow or contingent payments for a year or even longer. This is an uncomfortable situation, especially when selling your business to a deep pocketed financial investor with access to the best legal counsel.

On the other hand, if a seller offers a R&W policy as part of the package to a buyer the premium needs to be paid, but the escrow goes away. This makes for a much cleaner transaction.

You can sense the email arriving any moment from your finance director. The subject line will read: “Discuss Next Year’s Budget”. You think, “Is there anything more corporate than a budget?!” Budgeting makes you anxious and has for years.

You wouldn’t even do it if it weren’t a requirement from the bank. This is the moment in every year where you are forced to make definitive statements about the future and put yourself in a box. You do not like being put into a box. You are an outside of the box kind of person.