Category: Valuation

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Still No Plan to Sell Your Company? Do you Even Know What It’s Worth?

 

David Shavzin

When do I start my exit planning and how much is my company worth? We have gotten these questions for decades, especially from Baby Boomers. Sometimes it comes across casually: “So what do you think, should I start my exit plan 2 years ahead, maybe 3 years ahead?”

 

 

They often ask knowing the answer. They are trying to make themselves feel better because they haven’t created an exit plan and they know they should have started it long ago. They don’t know what their company is worth, but often get some outsized value stuck in their mind. If I respond that waiting until 24 months ahead of the sale is ok, they can let themselves off the hook for not having an exit plan or succession plan in place.

We talk to hundreds of business owners.

    • Some say they are tired and would like to get out. They do not want to put in much more time or invest in building the value of the company. Yet, they are not satisfied with what it is worth today.
    • Some family businesses have put off building a succession plan for a generation-to-generation transfer. They may feel they have time, or they may feel that their children (children often in their 30’s and 40’s) are “not ready yet”. They may fear losing an income stream as they transition out of the business.
    • Some are simply working the business, taking no time to develop an exit plan that could dramatically increase the value of the business when it comes time to sell.

 If any of these ring true for you, there are many potential solutions to address your concerns and situation. Take the first step and have a conversation with all involved. A good advisory team can help guide those exit plan discussions and provide an objective, experienced perspective. There are so many business exit options.

If you do have just a few years, there are a number of things you can do to optimize your exit and get everyone on the same page. But “2 – 3 years” is NOW, especially if you are a business owner in your 50s, 60s, 70s, or older. You have heard when talking about stocks that you can’t time the market. It’s the same thing for your business. And remember, the sale process itself can take 6 or 9 months to a year or more from start to finish.

With all of what’s going on out there in the world, a plan is critical to monetizing your life’s work! A sudden downturn could keep you captive in your business for another few years as you try to rebuild.

 Questions to ask yourself:

    • Do you know the value of your business? Don’t rely on a value that is some industry multiple or that sounds reasonable or what you’d like. Get professional assistance. This is your life, livelihood, and retirement.
    • When do you want to be completely or mostly out of the business?
    • Can you wait out the next downturn? If you are thinking of a 2- to 3-year timeframe, what if the economy slows down? Can you wait another few years to rebuild the value of your business? What do you really need out of the sale?
    • Do you have a solid plan for what you will do after your exit?

 By the Way, It’s NOT all about YOU!

Without an exit plan, you are not just risking your own retirement or next phase of life. You are putting in jeopardy your spouse, children, their families, your employees, their families, and more. Share on X

The message is simple: work with your advisors now to get a good understanding of your situation. The more informed you are, the better positioned you will be to create an exit plan that works for you, maximize value and minimize risk. You will leave the legacy that you want, not what others want. You will create your future!

Need to Get an Idea of Where You Stand on Business Value and Your Options?

David Shavzin, CMC
Founder, The Value Track
M&A Advisory, Exit Planning, Building Value
770-329-5224
david@GetOnTheValueTrack.com
Atlanta, Georgia
Our BLOG  // LinkedIn // www.GetOnTheValueTrack.com

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Should I Sell My Business Without an Advisor?

Optimizing the sale of your company should not be a DIY undertaking. A business sale is complicated, not a do-it-yourself activity. This is not like selling your home. Business owners can and do a lot themselves, we all do.

 The riskiest thing you can do: The most complex transaction you will ever likely engage in is the sale of your business. Selling your company by yourself, your life’s work is just too risky.  This is true from a legal perspective and financial perspective. And when most of your net worth is tied up in the company, you cannot afford big mistakes as you work on exit planning.

 Engaging a professional team to help you sell will maximize the sale price, optimize terms, and minimize the risks inherent in such a complex transaction. Your professional advisory team should also include expertise in exit & succession planning.

Selling baseball cards on eBay or selling your used car might have low financial risk. And we do not recommend selling your house by yourself even if you can get good data on comparable home prices. It is definitely not a good idea to do so with your company. This is even more true through the chaos of COVID, economic challenges and changes, uncertainty in politics (impeachment, a new administration, new potential tax changes, trillions in federal spending), as well as issues tied to your industry.

 One current client example: the first offer that came was a business value at about 30% of the number now under discussion. On their own, our client may have taken that first offer up by 100% but they would most likely not have taken it up more than 200%. Every case is unique but investing in the right advisory team will help you maximize what you walk away with for retirement, or whatever your plans may be.

Are you ready? A few thoughts: Sell Now? Wait for the Economy?

 

David Shavzin

Call if we can help you think through your specific situation. Always happy to have a conversation to provide some guidance on business valuation, exit planning, and the transaction. 

David Shavzin, CMC, Exit Strategist

Transactions, Value Growth, Exit Planning, Succession Planning

Founder and President, The Value Track, Atlanta, Georgia
Co-Founder and President, Exit Planning Exchange Atlanta

770-329-5224 david@GetOnTheValueTrack.com
Our BLOG // LinkedIn // www.GetOnTheValueTrack.com

 

 

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When You Hear: “Hey, I Want to Buy Your Business”

Have you gotten this phone call, regardless of where you are in your exit planning? During challenging, tumultuous times, this call comes from many corners. Some are legitimately interested, some are fishing, some are trying to take advantage. It may or may not be the right timing for your exit planning.

Over the last few months, we have heard from several business owners asking for help because they received “the call“.

When this question comes at you, it can be interesting, even exciting. How do you respond?

The best response is to ask for some basic information and let them know you will get back to them. Whether they say they are the potential buyer or representing the potential buyer, ask for their name, phone number, email address, and website. If you can’t get that, politely end the conversation. If they say they are representing another party, ask for the name of that person or company. They may not share this initially but ask. Getting some basic information will help you do some digging.  It may be something like “I have buyers that are interested in your business.” If you hear that, consider ending the conversation!  In any case, do NOT share any information, financial or otherwise, on this first call. Step back and consider your exit plan.

Even if they are legitimate, remember that they are representing the seller. This is a complex transaction, probably the most complicated one you will ever consider. It will impact your life, retirement, family, and employees for the long-term. Succession planning takes some time.

As I discussed in my last blog (Sell My Business Now? Wait for the Economy?), you need to consider so many factors when deciding if this is the right time for you to sell. It may very well be. Even then, you need experienced professionals who provide transaction services to help guide you through this most important decision and avoid the expensive pitfalls of trying to go it alone.

If you are ready to sell, get professional representation to help manage the process. A business sale is always complicated, even more so under current conditions. If you are not ready yet, start with an estimate of value and some advice on preparing your exit plan – whether your target is one year or 10 years. If you do have time, focus on getting through COVID-19 and building business value: Rebuilding Post-Crisis.

Call if we can help you think through your specific situation. Always happy to have a conversation to provide some guidance!

Stay Healthy & Safe!

David Shavzin

David Shavzin, CMC
Exit Strategist – Value Growth, Exit Planning, Succession Planning, Transactions

Founder and President,
 The Value Track, Atlanta, Georgia
Co-Founder and President, 
Recent Blogs:

During & Post-Crisis: Preserving, Rebuilding & Growing Business Value

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Sell My Business Now? Wait for the Economy?

Get on the Value Track

Yes, for most businesses, this is probably the toughest year over the last few decades. The recession 12 years ago was devastating but 2020 has been a catastrophe in many more ways.

 Coming up with an exit plan is more important than ever.

“Should I sell my business now?” We have been fielding this question almost daily since COVID-19 started. In good times it seems that we field that question a bit less. Generally, that should be the reverse. Like with the stock market, business owners too often ride the wave up and assume it will keep rising until they reach the exact moment – and value – that they want. That isn’t going to happen for the vast majority.

Of course, the answer at any given moment depends on so many factors:

    • YOUR personal situation
    • Family considerations (See: Family Business Succession)
    • The overall economy
    • The health of your industry
    • Perhaps most importantly the state – and transferrable VALUE – of your Business

 Should I sell? Should I wait? When? Price? The answers are different for every one of you reading this article. Our current clients (mid-COVID) range from $0 in revenue to having their best year ever. What is the same for every business, however, is the series of questions and considerations for designing an exit plan.

If the value of your business is down during COVID-19, but still reasonable for your needs, consider selling. Get over the emotion of it being worth more at the beginning of 2020 and don’t gamble on the future. If you cannot jump out at the current value, get hyper-focused now on comprehensive, realistic exit planning. Call if we can help you think through your specific situation.

 Whatever your situation, these 5 Action Items Apply:

  1.  Get absolute clarity from your CPA or tax advisor and HR consultant on your obligations regarding employment laws under COVID-19 and loan uses / forgiveness. Do what you need to do to have your 2020 financial statements in order shortly after December 31st.
  2. Request an estimate of value based on your best forecast for 2020. This is not an exact science (it never is) but a mid-COVID estimate will give you a baseline for decision-making. Get this done now, you can quickly update it when your numbers are final.
  3. Set out a preliminary goal (target date and value) for the sale of your business.
  4. Design a plan to get from today’s value to your target value by your exit date. Your exit planning should consider: What is working, what needs work, how to get creative…in these 8 areas:

 

    • Brand / Marketing / Business Development
    • Your Customers’ Experience
    • Operations & Key Business Processes
    • Human Capital and Human Resources
    • Profit Improvement, Accounting/Reporting, Cash Flow
    • Risk Management to include Disaster Recovery & Business Continuity
    • Technology
    • Your Personal Finances and long-term plan

 

  1. Make sure that all your advisors are communicating and coordinating as a team on your behalf! If anyone is not doing so, kick them to the curb!

Always happy to have a conversation to provide some guidance!

Stay Healthy & Safe!

 

David Shavzin

David Shavzin, CMC
Exit Strategist – Value Growth, Exit Planning, Succession Planning, Transactions

******************************************

Founder and President, The Value Track, Atlanta, Georgia
Co-Founder and President, Exit Planning Exchange Atlanta

 

770-329-5224 david@GetOnTheValueTrack.com
Our BLOG // LinkedIn // www.GetOnTheValueTrack.com

 

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During & Post-Crisis: Preserving, Rebuilding & Growing Business Value

You need to address the urgent needs of keeping your family safe and healthy. You need to address the critical issues around employees, payroll, managing your cash and other realities of the current crisis. Period! Absolutely! If you haven’t spoken to your bank about the financial relief bills that congress is about to pass, call them now!

 

You also need to get back to business to the greatest extent possible as you address these – hopefully – short-term issues, even if you are doing it from your home kitchen table in your pajamas. During the last recession, I saw too many business owners slow down when they should have been redoubling their efforts.

 

You need to get back to basics and plan out how your business may change (opportunities!) and how you are going to ramp up as quickly as possible. You need to get back on The Value Track and back to exit planning – creating your future: your exit / succession / transaction. Make sure that you are integrating your short-term crisis management decisions into your planning. They will impact your business and its value just like any other decision.

 

How can you keep to your timeline for the sale of your business or get back to family business succession planning for the transfer/sale to your children or other family members? It may be delayed but don’t assume it will and don’t slow down working toward it.

 

What can you learn from what other companies are doing? What is likely to change as we come through this period that you can adapt your product or services to address. (Hand sanitizer in happy meals? McD’s, I want royalties!) I am very serious about this. My clients have been hit hard like everyone else, in a variety of ways. They are all getting creative in the short-term and I know that these decisions and detours are going to make them stronger and more valuable companies.

 

You need to have a clear, but flexible plan that considers the “what-ifs”. Whether here in the Spring of 2020 or in every year since you started your business. You won’t always know what those “what-ifs” are, but they WILL occur. Hurricanes, recessions, competitors, regulations, your own illnesses, tariffs, hacking, lawsuits…

 

Here are 4 brief blogs I have written over the last 10 years on the topic of business risk. These business management and leadership issues did not start today. Take a few quick minutes: Thoughts to Consider on Risks to Your Business

 

In the meantime, I am reiterating my offer of a one-hour conversation with you, your clients or other business owners who could use a sounding board at this time – whether for input on urgent problems, thinking through strategy in order to come out of the crisis or to focus on building/rebuilding value if working toward a sale.

 

This year of challenges marks my 20th year in practice as a consultant, coach and exit strategist; helping clients grow, solve problems, build value and work on exit strategy. I would be happy to explore how my 20 years of experiences with other clients – and how they are addressing this situation – might provide insights and help your business survive & thrive!

Stay Healthy & Safe!

David Shavzin

 

David Shavzin, CMC
Exit Strategist – Value Growth, Exit Planning, Succession Planning

Founder and President, The Value Track, Atlanta, Georgia

Partner, ITB Partners

 

 

Building Transferable Value for Sale
770-329-5224 david@GetOnTheValueTrack.com
Our BLOG // LinkedIn // www.GetOnTheValueTrack.com

 

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Family Business Transfer Conversations – Talking with Your Adult Children About Succession Planning

Family Business Succession 

 

David Shavzin

Are your children ready to take over your business? The answer I usually get is something like “No, she has only been in the business for 10 years, she’s not ready to run a business.” Or, “He will get it eventually, but there is no rush.” Exit planning and succession planning are critical to a smooth sale and transition, but they are too often ignored until it’s too late, especially when it comes to family business situations. Are you burying your head in the sand because you are uncomfortable planning to leave the business?


You don’t have to leave tomorrow. At the same time, starting early will help you think through a variety of options to find a structure that best fits your needs. An early start will also provide enough time to talk through key issues with family, inside and outside of the business. The issues can be thorny ones when dealing with the family business, but time can bring everyone together.


Don’t leave a mess for your spouse, children, and employees. We will ALL exit our business at some point, one way or another. The process of selling is very complicated, and it will take much longer than most owners expect. Family business transfers are especially complex.


Again, you don’t have to rush out the door just because succession planning begins. But your family and employees will be more engaged knowing that you are laying out a game plan. If they are not yet ready, start now and include a plan for them to get ready. You may still think of them like this, but they really may be more ready than you think.

 

It takes a huge toll on morale when your children lack specifics and any semblance of a timeline. We routinely hear from adult children of business owners who are beyond frustrated at the lack of a real plan as to how they will eventually start taking steps to succeed Mom and Dad. They don’t need it to happen next week, but they need to know how and when. And, yes, what they need to do to show you that they are ready.


They may never be ready. However, getting an early start on talking about these issues will help you determine whether that is the case or not. You may find that they don’t want the family business, even if they would be capable. Either way, you need to know that as early as possible.


Get your family engaged in these complex issues. The right conversations will lead to the engagement that carries on your business legacy for years to come. Another significant benefit to family business succession conversations is that with a plan in mind, business value growth becomes a lot easier.


Let us know if a conversation about your specific succession planning situation would help you move forward.

______________________________________________________________________________________________

David Shavzin, CMC
Exit Strategist – Value Growth, Exit Planning, Succession Planning
Founder and President, The Value Track, Atlanta, Georgia

Building Transferable Value for Sale

770-329-5224 david@GetOnTheValueTrack.com
Our BLOG // LinkedIn // www.GetOnTheValueTrack.com

 

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David Shavzin, CMC, Exit Strategist, interviewed on RadioX North Fulton.

David Shavzin Interviewed by N. Fulton RadioX

David Shavzin created The Value Track to help business owners build value and create a path toward a successful exit. Too often, they have not built the value they need and are unprepared when the time comes to put their transition into action. In this RadioX interview, “Maximizing Exit Strategy, Understanding Value”, interviewed by John Ray on Business RadioX®:  Listen to the Interview

David discusses critical issues that business owners need to understand in order to maximize the sale of their business. Exit planning is a process – not something to decide one day, and try to implement the next.

David helps business owners think through their long-term goals and plans, educates them on business value and brings the right – collaborative – advisory team around the table. He then assists in the implementation of value-growth initiatives, guiding them to a successful transition (sale, family transfer, etc.). His 7-step process improves their quality of life and allows them to exit on their own terms.

A frequent speaker on these topics, David is a CMC, former IMC Georgia chapter president and President and Co-Founder of Exit Planning Exchange Atlanta, formed to bring advisors together in a collaborative effort to serve their clients.

His early career was in banking and finance, then 12 years with life sciences company Sanofi/Aventis. He spent 4 years in corporate finance and Mergers & Acquisitions. Then, 8 years of leading teams responsible for Quality, Finance, Supply Chain, Customer Service and IT functions within a $175M subsidiary.

For More Information, Contact David Shavzin at:

(770) 329-224

david@getonthevaluetrack.com   

 

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David Shavzin, CMC to Speak at IMC USA’s National Conference, ConsultCon 2019

David Shavzin, CMC to Speak at IMC USA’s National Conference, ConsultCon 2019

 

David Shavzin

David, exit planning advisor, is Founder of The Value Track. He will speak to conference attendees on “Riding the Wealth Transfer Wave, Helping Clients Maximize Their Exit.”

Four million business will be sold in the next 5-10 years, resulting in a multibillion-dollar transfer of value. This is a significant opportunity for consultants because most business owners are not preparing an exit strategy. The right advisory team, working together, will help clients maximize the eventual sale of their business.

David created The Value Track to help business owners build value and create a path toward a successful exit. Too often, they have not built the value they need and are unprepared when the time comes to put their transition into action. David helps his clients improve their quality of life, build value in their company and exit on their own terms.

 

ConsultCon 2019, IMC USA’s National Conference (Dallas Oct. 4 – 6). Speakers also include Dave Copps, Melinda Marcus, CSP, and Alan Weiss. Starting out or a seasoned consultant, please join us to connect with other consultants, learn & form potential alliances. Info & Register: https://www.imcusa.org/page/ConsultCon2019  

 

David Shavzin, CMC

david@GetOnTheValueTrack.com

https://getonthevaluetrack.com/