Best Practices

Closing is Just the Beginning – Post-Merger Integration Plan Best Practices

2020-03-03T13:39:51-05:00

Growth by acquisition can be a risky proposition, but it carries less risk when compared with organic growth. In theory, you are paying market value for a book of business that will immediately begin generating cash flow. If the valuation is reasonable, then the deal should be appealing to shareholders. In contrast, organic growth or investment in new growth areas doesn’t always materialize. Acquisitions are the preferred choice for many companies looking to grow on a retracted timetable, and the process is an exciting one. When it comes to acquisitions, the “closing date” is often seen as the crescendo of a [...]

Closing is Just the Beginning – Post-Merger Integration Plan Best Practices2020-03-03T13:39:51-05:00

3 Takeaways From Harvard Business School’s 2019 Search Fund Conference

2020-03-03T13:39:58-05:00

Though search funds still make up a relatively small percentage of lower middle market investors, this investment model continues to gain prominence. In December 2019, I had the pleasure of attending the HBS Entrepreneurship Through Acquisition (ETA) conference for my third consecutive year. It’s been incredible to see firsthand the search fund community gaining prominence. I’d like to sincerely thank Harvard Business School and the ETA Club at HBS for producing the incredible event. For those unfamiliar with ETA, it is a career path in which professionals (often after an MBA program) acquire a profitable lower middle market business and assume [...]

3 Takeaways From Harvard Business School’s 2019 Search Fund Conference2020-03-03T13:39:58-05:00

Value Rises, When There are No Surprises!

2020-02-05T09:38:00-05:00

How to protect your client’s business value from unplanned, chance events. As we all know, there are rarely good surprises in business. Record concurrent years of positive economic growth are behind us, with an unclear future. Risk exposures beyond our control loom daily -- tariffs, trade wars, industry slowdowns, recession, partisan politics or international crisis. Of equal concern, internal operating risks abound -- increasing pay rates, hiring difficulties, technology edge and  compliance requirements to name a few. Most business owners want to enjoy the value that took years to develop. So how can we help them protect and grow that same [...]

Value Rises, When There are No Surprises!2020-02-05T09:38:00-05:00

A Business Valuation is Not Just In the Numbers: Part Two

2020-02-05T09:37:47-05:00

A Business Valuation is Not Just In the Numbers Leadership & Culture The culture of an enterprise may be hard to measure, but it nevertheless very important to the worth and value of a business.  Employee retention and turnover is one important variable that appraisers will want to understand, as well as some of the underlying drivers.  Companies with weaker benefits and compensation programs will likely face more competitive employment pressures and increased turnover, which in turn creates increased discounts to value when analyzed by a qualified appraiser. Another issue many businesses face is key person risk.  We have enjoyed a [...]

A Business Valuation is Not Just In the Numbers: Part Two2020-02-05T09:37:47-05:00

A Business Valuation is Not Just In the Numbers: Part One

2020-01-07T12:34:11-05:00

A Business Valuation is Not Just In the Numbers As a professional business appraiser, we are called to provide our best estimate of fair value.  On its face, it would seem relatively straightforward to assume that most of it has to do with the financial well-being of the company, which it does.  However, it is also very easy to overlook some of the more salient issues in the ongoing operations of a business which subtract meaningful dollars from its value.  In our experience, the issues most prevalent impacting potential valuations can be found in the following areas: financial operations, sales function, [...]

A Business Valuation is Not Just In the Numbers: Part One2020-01-07T12:34:11-05:00

Update on the BIEF Campaign for Clarity

2019-11-05T16:36:43-05:00

Update on the BIEF Campaign for Clarity On September 11th, a subcommittee of the House Financial Services Committee (HFSC) held a public hearing on various bills, including HR 609, The Small Business Mergers, Acquisitions, Sales and Brokerage Simplification Act of 2019. In its memo announcing this hearing, the Financial Services Committee staff summarized HR 609 as follows: This bill would codify an SEC no-action letter by exempting certain merger and acquisition brokers from registration as broker-dealers. Under the bill, M&A brokers are defined as brokers that facilitate the transfer of ownership of privately held companies with earnings [EBITDA] of less than $25 million or revenues of less [...]

Update on the BIEF Campaign for Clarity2019-11-05T16:36:43-05:00

When Was Your Last Independent Business Insurance Review?

2019-08-29T11:06:14-04:00

When Was Your Last Independent Business Insurance Review? Bill Goddard, CPCU, Principal, Insurance Advisory Services Business owners, CEOs and CFOs have enough on their plates – being experts about their business insurance policy is rarely at the top of their list. Coverage often goes unchallenged and unexamined for years until something prompts a closer look. That could include being asked about the business’ coverage by a board of directors; undergoing a large business change that requires different coverage; or, unfortunately, disaster striking and learning there isn’t adequate coverage. A business should undergo an insurance review every three to five years to [...]

When Was Your Last Independent Business Insurance Review?2019-08-29T11:06:14-04:00

Successfully Navigating the SBA Lending Process

2019-08-01T13:43:36-04:00

For buyers seeking acquisition financing, an SBA 7(a) loan can be a fantastic tool.  Relative to conventional loans that typically require down payments of 30% or more, buyers utilizing SBA loans can make a down payment of 10-25% (more on this later), and obtain a low fixed rate (a small amount above WSJ prime rate) with payments amortized over for 10 years with no pre-payment penalty.  While the SBA lending process can be opaque at times and can subject the parties to uncertain timelines and potentially modified deal structures, the process worked very well for one of our recent clients, a [...]

Successfully Navigating the SBA Lending Process2019-08-01T13:43:36-04:00

Due Diligence: Preparation Saves Time and Money

2019-07-01T14:09:55-04:00

Due Diligence: Preparation Saves Time and Money When talking about selling a business, we talk a lot about a buyer doing their due diligence. What does that mean for the seller? What will the buyer be looking for? The answer is actually contained in a long and thorough checklist. As a seller, it means you must be prepared to present paperwork or reports that answer due diligence inquiries, and that any area where you are not prepared can potentially delay the sale or worse, derail it altogether. This is one of the reasons due diligence is such an important thing to [...]

Due Diligence: Preparation Saves Time and Money2019-07-01T14:09:55-04:00

Ten Tips for Aspiring M&A advisors

2019-04-03T14:47:46-04:00

Ten Tips for Aspiring M&A advisors When I decided to get into this business at the old age of 28, my only advantage was a full head of brown hair, a youthful charisma, a sharp analytical mind and a strong desire to succeed.  I had spent the prior 10 years in academia in undergraduate and graduate studies in engineering followed by a brief stint in teaching.  I had absolutely no knowledge of business and finance, and very, very minimal experience in sales.  Starting in 2006, I was also jumping into a pool as the water was draining out the bottom.  In [...]

Ten Tips for Aspiring M&A advisors2019-04-03T14:47:46-04:00