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What is Your Company Worth Today and Why Does it Matter?

By Generational Equity

How Much Money

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:

  • Have I conducted a goals-based analysis with an advisor?
  • When was the last time I reviewed my investment portfolio’s exposures?
  • Am I effectively managing my personal cash to achieve the highest yield possible?
  • Is my business maximizing 401K, pension, and other vehicles to shelter my income?
  • When was the last time I reviewed my estate plan with an advisor?
  • When was the last time I discussed my investment plan with my family and an advisor?
  • What are my philanthropic intentions, and have I discussed these with an advisor?
  • Am I properly insured?

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, search for an executive conference, fill out a contact form or call us at 972-232-1121 and ask to speak with one of our senior business advisors.

By Carl Doerksen, Director of Corporate Development at Generational Equity.

© 2021 Generational Equity, LLC. All Rights Reserved.

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I wanted to take this opportunity to thank you for all that you have done for us. Not only did you take care of all the aspects of the sale but took extra care to make sure we knew what it looked like every step of the way. I will definitely recommend your company to anyone that is in a position to or looking to exit their business.
Shane and Johanna Kline, Owners of Vision Upfitters
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
The professionals at Generational Equity then helped develop a roadmap for enhancing the value of the firm and an evaluation report. This was completed by June 14, 2021. We then developed the Confidential Information Memorandum and put Taylor Studios, Inc. on the market by July.
Generational Equity’s professional staff helped me every step of the way. Their network and professionals are the only reason I sold my company this quickly. For me this is a once in a lifetime sale and I was unfamiliar with the process. I was able to lean on them with questions and concerns.
Betty L. Brennan, President, Taylor Studios
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.
The most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.
Salvo Stoch, Founder and CEO of Sleeping Partners
After attending a conference with GE, I decided that the value they bring would be worth the expense and as soon as I started working with them, I realized that was the right decision. When we started to get LOIs, Fred Zweifel took the lead on the communication and supported negotiations throughout the process, which got tricky as we moved forward. I learned that it can be common for companies to make a great offer then work to erode that price with their discoveries, but Fred and the GE team kept that from happening.
Caroline Connelly, CEO, OptoTest
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
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
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
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
I decided to attend the conference and hopefully receive some guidance on how to structure an exit plan of my business. Upon arriving at the conference, I was so impressed with the presentation given by Generational Equity that I set a future appointment that week to discuss the possibility of selling my business with their Senior Managing Director David Robinson.
JoAnn Ellis, Owner of Fondren 5 Star Kennels
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
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
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.
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.
We were represented by Michael Goss with Generational. The due diligence was grueling and exhausting, but Michael propped us up and kept us motivated throughout the process. Debi and I continued to ask each other how we could possibly make it through this process without the assistance of Michael. Michael's professionalism and knowledge is absolutely amazing, and we are so blessed to have had him by our side as we made our future dreams come true.
Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
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 had the pleasure of working with Mr. Ahmad Behjati Managing Director, M&A, for Generational Equity during our acquisition of Papa's Dodge in late 2021. Generational Equity and Mr. Behjati represented and marketed Papa’s Dodge. As our primary contact, Mr. Behjati was professional in every facet of this acquisition process, conveying valuable advice most times and assisting us in every step of the process.
Rick Greene of Dobbs Equity Partners LLC
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
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!
JoAnn Ellis, Owner of Fondren 5 Star Kennels
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
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
Thanks to you, the entire GE team and especially Michael Goss for driving a great valuation, coaching me and driving the process across the finish line. Please let me know if there is anything I can do to support GE going forward.
Tom Currier, Former President & CEO, Rackmount Solutions
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
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
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 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 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