Why Delays Can Be Costly For M&A Transactions

By Generational Equity

02/09/2018

Recently, the media in New England reported the "retirement sale" for a company that had been in business for 235 years. Sadly, the firm's owners were closing the business because they could not find someone to buy the company.

"Timing is a key component in the ability to sell a business for maximum value," said Terry Johnson, Chief Revenue and Strategy Officer here at Generational Equity.

"A business forced into closing its doors may have had much greater value if it had been positioned for sale by a professional at the right time. Timing is everything, and I've never met a business owner that regretted starting the process too early."

Johnson added, "Too many people wait to begin the exit planning process until they are forced due to failing health, industry upheaval, and a myriad of other unforeseen circumstances. The degree of difficulty increases exponentially in these situations, and the net result is often unfavorable."

The Importance of Good Timing for M&A Activity

What makes an optimal time to sell?

• A strong economy
• Low interest rates
• Favorable tax environment
• Active buyers with ample capital to invest
• Industry consolidation
• A business with a substantial opportunity to grow with the help of additional capital or experienced management

"A business must be buyer ready in order to take advantage of positive timing conditions," noted Johnson. "This means following the multi-step process that Generational Equity directs for all of our clients."

One key step is creating professional documentation that demonstrates the buyer-readiness of the company. Because of this, having an experienced M&A advisor by your side is vital.

"A proper exit plan is not something that is done overnight," said Johnson. "A business owner should initiate the process far in advance of their target exit date.”

“For millions of baby boomer business owners now reaching retirement age, selling at the right time may be the difference between long-term financial struggles versus a comfortable retirement. The stakes are high, and my advice to business owners is to start the process early."

Don’t Delay – Contact Generational Equity for M&A Advice Today

If you want to avoid the delays in M&A activity that could cost you the optimal exit from your business, reach out to Generational Equity’s experienced advisors today. Through our complimentary executive M&A conferences, you’ll understand why selling a business at the ideal time helps ensure that money won’t be left on the table when you depart.

Contact our team for more information on attending a conference in your area, or to arrange a meeting with our skilled M&A advisors. Quick, while time is on your side!