With the help of her Exit Planning Advisor, Sarah has decided that selling to a third-party buyer would best accomplish all of her goals (financial, values-based, legacy). Quantifying her business and personal resources with a financial gap analysis has been helpful to Sarah in determining her departure date in six years. She now knows the current… Continue reading Strategic Exit Planning: Deal Momentum, Deal Fatigue, and Pre-Sale Due Diligence
Cash flow normalization is done with the intention of identifying Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) or Seller’s Discretionary Earnings (SDE). These differing measures are not interchangeable but are used by different classes of buyers for different categories of acquisition. Free cash flow is an important measure when calculating the value and price for any business. It is the amount theoretically available for servicing acquisition debt, working capital, return on investment for any cash outlay in the acquisition, and future expansion.
Communication: Clear and consistent communication with all stakeholders is vital. Whether it’s sharing Business Continuity Instructions with family members or discussing the terms of a Buy-Sell Agreement with co-owners, transparency helps prevent misunderstandings and builds trust. Ownership transitions are inevitable, but with the right continuity planning, businesses can navigate these changes successfully. By understanding the unique… Continue reading Conclusion
In businesses with multiple owners, the departure of one owner can create tension and uncertainty, particularly if the remaining owners are unprepared. A well-drafted Buy-Sell Agreement is essential in these situations to govern the transition and ensure fairness to all parties. Here are a few key considerations: Buy-Sell Agreement: This agreement should clearly define the terms… Continue reading Continuity Planning for Departure of One Owner in a Multi-Owner Business
Ownership changes are critical moments in the life of any business. Whether due to the untimely death of an owner, the departure of an owner-operator, or the exit of a co-owner in a multi-owner business. These types of transitions present unique challenges that require thoughtful planning. Effective continuity planning can help ensure that a business… Continue reading Continuity Planning for Businesses
FPA Owner Transitions 