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The Importance of Experienced Exit Planning Advice

By Generational Equity

Exit Planning Advice

We are often asked by business owners: Why do I need to hire an M&A advisor?

The answer is easy – if you want to obtain a premium for your company, you need an experienced M&A team by your side like Generational.

Why?

For several reasons. 

First, any experienced M&A firm will determine if your business is buyer ready once you hire them. This process identifies key areas that you may need to work on over time, both tactical and strategic, to prep your business for an exit in the future. 

The Generational process is unique in the M&A world because we have a team, Generational Consulting Group (GCG), that was created to work with business owners to do just that: Build a buyer ready business.

Now the interesting thing we have found is that our team often helps the business owner fall in love with their company all over again, and see hope for growth beyond what they could imagine. This often takes an exit off the table for years to come!

This is what a few of our GCG clients have said about our consulting work with them:

Once your business is buyer ready, and you are personally ready to move on, the second step any experienced firm will take will be a full evaluation of your company including recasting of your financials. This critical process is so vital that if you don’t do it, you will be selling your company at a substantial discount.

Recasting allows your advisor to show the true historic and projected profitability of the company using a baseline that eliminates all items that you expensed through your business that will not be done so by a new owner (relatives salaries, vacation homes, autos, non-business-related perks, etc.) 

It is critical to get the evaluation phase right, for it to be accurate, and for it to be documented. Because when you get to due diligence, buyers will naturally try to determine if the financials are valid. Many will do a Quality of Earnings analysis. So having an experienced team of M&A advisors working with you can ensure that this process goes more smoothly.

Once the evaluation is completed you will then have an idea of what the economic value of your business is. Typically this will be a range of values, and the key thing to remember is that ultimately the market will determine the true value of your company. But the economic value gives you at least a starting point to know which offers are valid and which are being discounted.

And this is where the art of deal making comes into play and where you really will see the benefit of having a team like Generational by your side: Creating an optimal buyer list – one that has targets that will see the true value of your company.

Generational has over 34K registered buyers in its buyer database, and each has given us information on what they are specifically looking for in acquisition targets. This allows us to create buyer lists that are both targeted and broad enough to capture the premium buyers for your business.

Finally, when it comes to due diligence and negotiating a final deal, you will see the ultimate value in hiring solid M&A advice. Due diligence can be grueling and in many cases business owners question why a buyer is asking so many questions about the business. Don’t they trust me?

An experienced M&A team can help guide you through the purpose behind the 300+ questions often on a due diligence checklist, and help you understand (and answer) them.

Negotiations with buyers are never easy. If you go at this alone, you will be sitting across the table from folks that have acquired companies for a living for decades. They will NOT look after your best interests. That is why having a team like Generational with you at that table will help you obtain a deal that meets your short- and long-range financial goals.

Often business owners assume an all-cash deal is the best deal. However, in some cases it is wise to structure a deal where the owner is compensated in stock and other forms of payment, and even in contingent payments if the owner has some control over those items in an earn-out scenario.

Other options such as employment agreements can also be lucrative. Maybe ultimately you are not ready to sell 100% of the business, but want to remain and help it grow with new capital from a private equity firm. The variations are really endless, but you will need good M&A advisors to help you understand them all.

So, these are some of the reasons why you should hire an experienced, talented exit planning firm like Generational for your future plans. Don’t just take my word for it – listen to what a few of our clients have to say about our process:

If you would like to partner with us to develop a plan for your company, call us at 972-232-1121 or visit our website and provide us with your contact info and we will be in touch.

Carl Doerksen is the Director of Corporate Development at Generational Equity.

© 2021 Generational Equity, LLC All Rights Reserved

We will highly recommend Generational Equity and Musa Jagne to any business owner about to embark on the same process.
Karen S. Williams, CFO, BW Manufacturing
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”
Karen S. Williams, CFO, BW Manufacturing
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!
Andy Graham, Vice President, Modern Heating & Plumbing
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
Dear Chris and Andre, I just wanted to say thanks for all your help. Even though this process was not an easy one, it was comforting to know that I had a capable team standing beside me. You made me feel like we were almost your only client or at least the most important one. Thanks again, and I will recommend your service in the future.
Shenille Engelhart, Owner – CLS Technology
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.
Pete L.
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.
Michael J Polarek, President, Paragon Packaging
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
Tom Staszak is one of the most professional people I have dealt with in my last forty years of business. You’ve got a great group of people and you have built a truly professional organization.
Michael J Polarek, President, Paragon Packaging
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.
Bryan D. Horn, Owner, Over Under Clothing
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.
Larry Moore, Owner, A Company Portable Restrooms
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.
Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!
Eric Erlandson, Owner, Action Fastenings, Inc.
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse