Making the Transition from Business Brokerage to M&A


Many M&A Source members join the organization after being business brokers. The desire to move upmarket and work on bigger deals is natural and it happens regularly. M&A advisors bridge the gap between small businesses and large corporations, focusing on the lower middle market. I believe that the major factor that determines whether a deal is business brokerage or M&A depends on who is the most logical, highest value buyer. If it is an industry buyer or a PEG, it is an M&A deal. After selling my business in 2002 I went back to graduate school for an MBA and started [...]

Making the Transition from Business Brokerage to M&A2022-04-14T13:50:55-04:00

Economic Buoyancy


Your business has no doubt been under a lot of economic pressure over the last 15 months or so. That pressure may stem from too much or too little demand for your products or services. A lot of either type of pressure can make it very tempting to sell your business now, but selling your business under economic pressure is ill-advised unless you absolutely have no choice. Economic buoyancy provides the best return on the investment of your hard work, imagination, dedication, and, of course, capital. Economic pressure is more than just the relative health of the economy, as other factors [...]

Economic Buoyancy2021-07-30T10:08:43-04:00

How Did 2020 Change Valuations in M&A


By Cheryl Aschenbrener, National Leader and Partner, Transaction Advisory Services Original Content To say that 2020 was an unusual year is an understatement. Especially within the transaction world, where it left more questions than answers, like: How do buyers and sellers treat 2020 numbers in the valuation process? In more normal times, an appraiser would look at a prospective seller’s prior three years of operating income, maybe longer depending on the economic cycle. There would be adjusted EBITDA times X calculations with the aim of bridging past to future—painting an accurate picture of a company’s earning ability and risk going [...]

How Did 2020 Change Valuations in M&A2021-07-01T13:22:59-04:00

Transaction Tips: The 5 C’s of a Successful CIM


The Confidential Information Memorandum, or CIM, is widely used as a marketing tool when raising debt or equity capital, selling healthy or distressed businesses or refinancing existing debt. A CIM is like the big brother to a one-page investor summary, or the more commonly used term, teaser. Colloquially, a CIM is also often referred to as a book for the simple fact that it can be voluminous, detailed, dense and descriptive. Well-prepared CIMs used in successful transactions tend to share some key characteristics. By establishing the purpose of a CIM and identifying best practices for creating one, you can better [...]

Transaction Tips: The 5 C’s of a Successful CIM2021-05-10T15:25:20-04:00

Good Governance Is Good Business, Especially for Family-Owned Enterprises


Family businesses are the heartbeat of the US economy. Their contribution to the nation’s GDP, job creation and employment are unmatched. Indeed, 35% of the Fortune 500 companies are family businesses, but those companies have beat the odds. According to the Family Firms Institute, 70% of family business will not survive to the second generation and 90% will not make it to the third. Many of those family businesses have proven successful and are sold, merged with another company, or undertake an IPO. Some, however, just fail. The reasons family businesses are sold vary from lack of interest by subsequent [...]

Good Governance Is Good Business, Especially for Family-Owned Enterprises2021-03-29T15:21:56-04:00

Home Office Deduction Rules


The IRS reminded taxpayers of the home office deduction rules during Small Business Week and urged individuals to consider taking the home office deduction if they qualify.   Who qualifies for the deduction?  The home office deduction is available to qualifying self-employed taxpayers, independent contractors and those working in the gig economy.  However, the Tax Cuts and Jobs Act suspended the business use of home deduction from 2018 to 2025 for employees.  Hence, employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home.   What is [...]

Home Office Deduction Rules2021-01-06T10:07:40-05:00

The Case for Moving Forward With M&A


With travel restrictions, portfolio companies in crisis mode, and a very skittish global economy, now is certainly not the time for investors and acquirers to focus on M&A. …or is it? While the idea of doing deals right now might seem daunting, not to mention logistically challenging (how exactly do you conduct on-site diligence in a shutdown?), there’s an argument to be made for M&A to keep moving forward, despite the circumstances. Data from the global financial crisis (GFC) of 2007-2009 “shows that companies that made significant acquisitions during an economic downturn outperform those that did not,” argues a recent article [...]

The Case for Moving Forward With M&A2020-09-30T10:22:10-04:00

Three Types of Procrastination and How They Affect Your Work


There are three different types of procrastination that we see today.  First is classic procrastination which is the act of consciously delaying what we know we should be doing:   I come home from the office at night and I have a stack of bills on the kitchen counter that need to be paid. I’m tired and exhausted. Rather than paying the bills, I’m going to sit on the couch and zone out and watch Sports Center.  That’s the classic form of procrastination we are familiar with.  There is also another type of procrastination which I’ve coined a phrase for, instead of [...]

Three Types of Procrastination and How They Affect Your Work2020-09-01T17:05:16-04:00

Is Your Company Failing? You May Not Need Bankruptcy Law


Resolving business failures cheaply and rapidly has never been more important, with Covid-19 and the recession about to push record numbers of companies under. But consider what a small-business owner faces: Your company is on the brink, you can’t pay your employees or suppliers, and now you’re expected to master the complex vocabulary of federal bankruptcy law. There’s Chapter 11, Chapter 7, Chapter 13, Subchapter V, Section 363, and on and on. The process looks expensive and time-consuming, and the chance of emerging with a going concern seems slim. The Uniform Commercial Code, which traces its origins to 1892, just might be the answer. It’s [...]

Is Your Company Failing? You May Not Need Bankruptcy Law2020-09-01T16:51:03-04:00

The Impact of a PPP Loan on Recasting


A key point regarding a PPP Loan is that it is a loan. When the Borrower receives the loan, the proceeds should be recorded on the Balance Sheet as a Note Payable which is a liability. The loan proceeds should not be posted on the Income Statement as income.   If the loan ends up being forgiven, it should be handled for income reporting as follows:  Financial Statements (specifically the Income Statement) – The forgiven loan amount is an elimination of an obligation to pay a debt. An appropriate reporting of this elimination is for it to be presented as [...]

The Impact of a PPP Loan on Recasting2020-08-05T18:17:26-04:00
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