Tag: David Shavzin

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Still No Plan to Sell Your Company? Do you Even Know What It’s Worth?

 

David Shavzin

When do I start my exit planning and how much is my company worth? We have gotten these questions for decades, especially from Baby Boomers. Sometimes it comes across casually: “So what do you think, should I start my exit plan 2 years ahead, maybe 3 years ahead?”

 

 

They often ask knowing the answer. They are trying to make themselves feel better because they haven’t created an exit plan and they know they should have started it long ago. They don’t know what their company is worth, but often get some outsized value stuck in their mind. If I respond that waiting until 24 months ahead of the sale is ok, they can let themselves off the hook for not having an exit plan or succession plan in place.

We talk to hundreds of business owners.

    • Some say they are tired and would like to get out. They do not want to put in much more time or invest in building the value of the company. Yet, they are not satisfied with what it is worth today.
    • Some family businesses have put off building a succession plan for a generation-to-generation transfer. They may feel they have time, or they may feel that their children (children often in their 30’s and 40’s) are “not ready yet”. They may fear losing an income stream as they transition out of the business.
    • Some are simply working the business, taking no time to develop an exit plan that could dramatically increase the value of the business when it comes time to sell.

 If any of these ring true for you, there are many potential solutions to address your concerns and situation. Take the first step and have a conversation with all involved. A good advisory team can help guide those exit plan discussions and provide an objective, experienced perspective. There are so many business exit options.

If you do have just a few years, there are a number of things you can do to optimize your exit and get everyone on the same page. But “2 – 3 years” is NOW, especially if you are a business owner in your 50s, 60s, 70s, or older. You have heard when talking about stocks that you can’t time the market. It’s the same thing for your business. And remember, the sale process itself can take 6 or 9 months to a year or more from start to finish.

With all of what’s going on out there in the world, a plan is critical to monetizing your life’s work! A sudden downturn could keep you captive in your business for another few years as you try to rebuild.

 Questions to ask yourself:

    • Do you know the value of your business? Don’t rely on a value that is some industry multiple or that sounds reasonable or what you’d like. Get professional assistance. This is your life, livelihood, and retirement.
    • When do you want to be completely or mostly out of the business?
    • Can you wait out the next downturn? If you are thinking of a 2- to 3-year timeframe, what if the economy slows down? Can you wait another few years to rebuild the value of your business? What do you really need out of the sale?
    • Do you have a solid plan for what you will do after your exit?

 By the Way, It’s NOT all about YOU!

Without an exit plan, you are not just risking your own retirement or next phase of life. You are putting in jeopardy your spouse, children, their families, your employees, their families, and more. Click To Tweet

The message is simple: work with your advisors now to get a good understanding of your situation. The more informed you are, the better positioned you will be to create an exit plan that works for you, maximize value and minimize risk. You will leave the legacy that you want, not what others want. You will create your future!

Need to Get an Idea of Where You Stand on Business Value and Your Options?

David Shavzin, CMC
Founder, The Value Track
M&A Advisory, Exit Planning, Building Value
770-329-5224
david@GetOnTheValueTrack.com
Atlanta, Georgia
Our BLOG  // LinkedIn // www.GetOnTheValueTrack.com

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ITB Partners February 19 Monthly ZOOM Meeting

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Jim Weber is inviting you to a scheduled Zoom meeting Featuring David Shavzin.

David will present:  What Has COVID Done to Value, Timing, Exit and Business Sales? Helping Business Owners Adjust.

 

David Shavzin

David Shavzin, CMC, is a Certified Management Consultant, and a passionate and experienced exit and succession planning, expert. He created The Value Track to help business owners improve profitability, build value, and maximize their business transactions.   A frequent speaker on these topics, David is President and a co-founder of Exit Planning Exchange Atlanta and past president of the Institute of Management Consultants – Georgia Chapter. David has over a dozen years of experience in senior corporate roles followed by nearly 20 years of consulting to privately held businesses. His industry experience includes manufacturing, distribution, healthcare, and professional services firms: law, accounting, architecture, engineering, and design.

 

Join Zoom Meeting

https://us02web.zoom.us/j/84516109138?pwd=c0VtWVFzdjE5NDNDVGVqcHdTc1RqQT09

Meeting ID: 845 1610 9138
Passcode: 393716

 

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When You Hear: “Hey, I Want to Buy Your Business”

Have you gotten this phone call, regardless of where you are in your exit planning? During challenging, tumultuous times, this call comes from many corners. Some are legitimately interested, some are fishing, some are trying to take advantage. It may or may not be the right timing for your exit planning.

Over the last few months, we have heard from several business owners asking for help because they received “the call“.

When this question comes at you, it can be interesting, even exciting. How do you respond?

The best response is to ask for some basic information and let them know you will get back to them. Whether they say they are the potential buyer or representing the potential buyer, ask for their name, phone number, email address, and website. If you can’t get that, politely end the conversation. If they say they are representing another party, ask for the name of that person or company. They may not share this initially but ask. Getting some basic information will help you do some digging.  It may be something like “I have buyers that are interested in your business.” If you hear that, consider ending the conversation!  In any case, do NOT share any information, financial or otherwise, on this first call. Step back and consider your exit plan.

Even if they are legitimate, remember that they are representing the seller. This is a complex transaction, probably the most complicated one you will ever consider. It will impact your life, retirement, family, and employees for the long-term. Succession planning takes some time.

As I discussed in my last blog (Sell My Business Now? Wait for the Economy?), you need to consider so many factors when deciding if this is the right time for you to sell. It may very well be. Even then, you need experienced professionals who provide transaction services to help guide you through this most important decision and avoid the expensive pitfalls of trying to go it alone.

If you are ready to sell, get professional representation to help manage the process. A business sale is always complicated, even more so under current conditions. If you are not ready yet, start with an estimate of value and some advice on preparing your exit plan – whether your target is one year or 10 years. If you do have time, focus on getting through COVID-19 and building business value: Rebuilding Post-Crisis.

Call if we can help you think through your specific situation. Always happy to have a conversation to provide some guidance!

Stay Healthy & Safe!

David Shavzin

David Shavzin, CMC
Exit Strategist – Value Growth, Exit Planning, Succession Planning, Transactions

Founder and President,
 The Value Track, Atlanta, Georgia
Co-Founder and President, 
Recent Blogs:

During & Post-Crisis: Preserving, Rebuilding & Growing Business Value

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Sell My Business Now? Wait for the Economy?

Get on the Value Track

Yes, for most businesses, this is probably the toughest year over the last few decades. The recession 12 years ago was devastating but 2020 has been a catastrophe in many more ways.

 Coming up with an exit plan is more important than ever.

“Should I sell my business now?” We have been fielding this question almost daily since COVID-19 started. In good times it seems that we field that question a bit less. Generally, that should be the reverse. Like with the stock market, business owners too often ride the wave up and assume it will keep rising until they reach the exact moment – and value – that they want. That isn’t going to happen for the vast majority.

Of course, the answer at any given moment depends on so many factors:

    • YOUR personal situation
    • Family considerations (See: Family Business Succession)
    • The overall economy
    • The health of your industry
    • Perhaps most importantly the state – and transferrable VALUE – of your Business

 Should I sell? Should I wait? When? Price? The answers are different for every one of you reading this article. Our current clients (mid-COVID) range from $0 in revenue to having their best year ever. What is the same for every business, however, is the series of questions and considerations for designing an exit plan.

If the value of your business is down during COVID-19, but still reasonable for your needs, consider selling. Get over the emotion of it being worth more at the beginning of 2020 and don’t gamble on the future. If you cannot jump out at the current value, get hyper-focused now on comprehensive, realistic exit planning. Call if we can help you think through your specific situation.

 Whatever your situation, these 5 Action Items Apply:

  1.  Get absolute clarity from your CPA or tax advisor and HR consultant on your obligations regarding employment laws under COVID-19 and loan uses / forgiveness. Do what you need to do to have your 2020 financial statements in order shortly after December 31st.
  2. Request an estimate of value based on your best forecast for 2020. This is not an exact science (it never is) but a mid-COVID estimate will give you a baseline for decision-making. Get this done now, you can quickly update it when your numbers are final.
  3. Set out a preliminary goal (target date and value) for the sale of your business.
  4. Design a plan to get from today’s value to your target value by your exit date. Your exit planning should consider: What is working, what needs work, how to get creative…in these 8 areas:

 

    • Brand / Marketing / Business Development
    • Your Customers’ Experience
    • Operations & Key Business Processes
    • Human Capital and Human Resources
    • Profit Improvement, Accounting/Reporting, Cash Flow
    • Risk Management to include Disaster Recovery & Business Continuity
    • Technology
    • Your Personal Finances and long-term plan

 

  1. Make sure that all your advisors are communicating and coordinating as a team on your behalf! If anyone is not doing so, kick them to the curb!

Always happy to have a conversation to provide some guidance!

Stay Healthy & Safe!

 

David Shavzin

David Shavzin, CMC
Exit Strategist – Value Growth, Exit Planning, Succession Planning, Transactions

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Founder and President, The Value Track, Atlanta, Georgia
Co-Founder and President, Exit Planning Exchange Atlanta

 

770-329-5224 david@GetOnTheValueTrack.com
Our BLOG // LinkedIn // www.GetOnTheValueTrack.com