Do you ever find yourself wondering if there is an opportunity to grow, expand, or exit your business? Does this then lead to a barrage of additional questions, including (but not limited to) …
- What is my company worth?
- When is the right time to exit?
- Are there companies out there that would be good merger or acquisition candidates?
- How can I get started?
The decision to buy a business, or to sell your business, is a huge one. It isn’t a process you want to go through alone.
Not All Transactions are the Same
When it comes to M&A (merger and acquisition) transactions, there are many options. Every business has different lifecycles that make them candidates for different types of transactions at different times. When a company is in a rapid growth mode, it may be in a great position to acquire companies. If a business is cash strung, but has some solid customers or upside, it may be ripe to merge or be acquired. It could also potentially end up in a leveraged buy-out if the company is in rough financial shape.
Is it Time to Exit?
There are myriad reasons why an owner may choose to exit. There are an array of factors to consider:
- Are you really ready to potentially step away?
- If the right opportunity presented itself, could it change your immediate desire to sell?
- All your accounting records in order, prepared in accordance with generally accepted accounting principles?
- Do you have robust forecasting capabilities that illustrate growth opportunities and earnings expectations?
- Are your supplier relationships in good standing?
Mergers, Acquisitions, and Exits: Seeing the Light
M&A activity is one of the fastest ways to grow your company, expand your resources, or exit at a time that is right for you. There are many options and advisory organizations that will help with your transactions. And while these companies may be a great partner for a portion of the transaction, you may want to look to your CPA for help.
Firms that specialize in M&A business can go far beyond just bringing the books together for the new organization following a transaction. They can help prepare the “book” you will take to potential buyers. Using CPA speak and appropriate financial metrics will strengthen the validity of your asking price and give a more professional look to the documents.
Your CPA can be instrumental in your planning of any deal. With every deal being critical to the future, an extra set of eyes can make a huge difference! Tax planning, budget planning, valuation, and even operations integration can all be aided through the eyes of a CPA firm that understands your business, goals, and vision.
By NSCA Executive Director Chuck Wilson and Bronswick Reicin Pollack, Ltd. Managing Partner and CPA Jeff Bronswick