A few weeks ago, Axial, a leading website connecting capital providers with business owners, published a well written piece covering several key questions business owners need to ask of themselves about their net worth BEFORE closing a transaction with any buyer.
Entitled “8 Questions to Answer About Your Personal Wealth Before Transacting,” the article walks you through some important concepts that every business owner should carefully consider before closing a deal with a buyer.
Written by Andrew Cardone, a partner with Bestwick Cardone Group, a wealth management group within Bank of America/Merrill Lynch, Mr. Cardone does a great job of highlighting some key questions business owners need to address, including:
Although each of these is important, based on our experience, the ones I have highlighted above are generally the ones that our clients tend to neglect the most. In fact, far too few have sat down with a wealth manager and created a future financial plan at all. Because of this we encourage our clients to create a relationship with a wealth management team long before the deal is closed. It is simply too vital and important to know how much invested capital you will need to reach your financial goals post close.
But as important as each of these is, one key item is not listed above and perhaps is the most important part of any wealth management discussion: How can you plan what you will need to live on for the rest of your life post sale if you have no idea what your company is worth in today’s market?
Simply put, you can’t.
So, even if you are proactive and meet with your wealth management team to create a plan, if you are like most business owners, most (if not all) of your personal net worth is tied up in one highly illiquid asset: your business. Without a good idea of what that asset is worth today, you can’t create a plan that is accurate or has the substance you need going forward.
This is what sets the Generational Equity system apart and makes us so successful. We conduct a complete and thorough evaluation of every client who signs up with us. This 60-day to 90-day step is vital for us and for our clients because it allows us to conduct financial due diligence on the business, recast the financials, and determine the current business enterprise value. For our clients, it is equally important because it gives them a solid idea of what the company is worth, which is vital for both estate planning AND determining if the deal is optimal for the owner.
Here are some folks talking about how critical our evaluation was to a successful conclusion of their transaction:
The last link above highlights another added benefit of our professional evaluation: based on our findings, we will provide you with a tangible Roadmap for Enhancing Value. Through these financial metrics, based on up to two dozen various ratios and industry norms, we will objectively view your business as a buyer will. The strategies we provide our clients often allow them to enter our hold-and-grow program and return a few years later with a much more “salable” business, with an enhanced valuation.
Again, before you can actually have a productive meeting with your wealth manager, you need to know what your business will generate for you upon its sale. If you are at a point in your life, and your company’s development, that you need to know what it is worth, then you need to attend a Generational Equity exit planning conference. While there you will learn about the various methods that can be used to value a company, and the upside and downside of each method. You will also be able to learn more about our exit planning services including our evaluation team and deal making success.
To learn more about how you can attend a conference near you, please visit our website or call us at 877-213-1792 and ask to speak with one of our senior business advisors.
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2017 Generational Equity, LLC. All Rights Reserved.
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
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.
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
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
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).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
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
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 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
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
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
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
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
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
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 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
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
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.
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
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