In the recent episode of the Business Growth Architect podcast we are featuring Trever Acers, the CEO of Objective Investment Banking. Our topic focuses on business exit strategies and optimizing the value of a business sale. Acers emphasized the importance of both quantitative and qualitative aspects when planning an exit strategy.
On the quantitative front, the focus is on after-tax cash in hand, an important factor in evaluating the financial outcome of your business sale. The key is for you to not just consider cash at closing but the longer term implications after-tax proceeds over subsequent years. Often around potential holdbacks and their impact on your overall financial picture.
In addressing the qualitative aspects, Acers highlighted an often misunderstood negotiation tool that is around personal objectives and setting clear expectations. He pointed out that many business owners express dissatisfaction post-transaction, often tied to non-financial factors such as acquirer behavior, personnel treatment, culture clashes, and the overall impact on the seller’s legacy. Articulating and negotiating these qualitative requirements is vital for a successful and fulfilling business sale.
The insights from this episode are valuable for navigating the complex process of evaluating your exit strategy, providing guidance on unlocking your hidden cash-out opportunities and maximizing the value of your business sale.
What You’ll Learn In Today’s Episode:
- Trever discusses the biggest hurdle for business owners when it comes to an exit strategy, emphasizing the importance of understanding one’s objectives before going through the transaction.
- He emphasizes the importance of negotiation and due diligence in the acquisition process, including negotiating the purchase price, transaction structure, and one’s role going forward.
- Trever advises on the importance of understanding personal objectives and being cautious in engaging in acquisition conversations to avoid distraction and potential negative impact on the business.
- He addresses the trend of increased interest in acquisitions and the need for business owners to carefully consider and evaluate the opportunities presented to them, emphasizing the importance of partnership and asking the right questions during the acquisition process.
Time Stamps:
02:10-02:50 Addressing the Biggest Hurdle in Exit Strategy for Business Owners
02:50- 03:25 Understanding the Reality of Business Exit Transactions and Unhappiness
03:25- 04:06 Mentoring Insights on Business Sale Expectations
04:06- 05:02 Considering the Timing of Selling a Business
05:02- 05:37 Quantitative Elements and After-Tax Cash Considerations
05:37- 07:00 Impact of Hold Backs and After-Tax Cash at the Close
07:00- 08:04 Addressing Unforeseen Market Fluctuations and Decision-Making
Resources Mentioned:
Trever Acers: Website | LinkedIn
Ideas Worth Sharing:
Entrepreneurs must rethink the timing of selling their businesses. In today's M&A landscape, even companies at $1M Annual Recurring Revenue (ARR) are sought after. We need to consider what must be true for an early sale, with… Click To Tweet After-tax cash at closing is the golden number in decision-making. Having 'your number,' coupled with qualitative considerations, gives us the powerful tool to confidently say no to offers that don't align with our objectives. -… Click To Tweet n negotiations, we can shape not just the deal terms like price and structure but also our post-sale role—our influence, reporting structure, and impact on the future organization are negotiable. - Trever Acers Click To Tweet
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