Merger & Acquisition Trends for Summer 2015
A recent article on Axial Forum by Emily Sackett explores Merger & Acquisition market results so far for the summer of 2015. Here are a few highlights.
- By September, we could reach a trillion dollars in proposed deals for the summer, beating out the previous seasonal high in 2007.
- A significant portion of this summer surge is being led by corporate buyers who are scooping up acquisition targets and borrowing like rates may rise tomorrow to fund current or future deals.
- In June and July 933 deals came to market.
- While historically August can prove to be a quieter month, the momentum to date is leading many to believe that a summer slowdown is nowhere in sight and that we could be headed for one the most active years on record for dealmakers.
In recent blogs we have also reported the positive trend in California for business sales as well. These current trends begs the question… “is now the best time to sell my business?” Naturally it’s impossible to predict the future but the market is showing positive signs for sellers looking to exit their business. And with the retiring baby boomer trend continuing to heat up some predict the increased volume of business’s for sale will create more of a buyer’s market in the years coming ahead. It’s never too early to have to starting discussing the proper exit for anyone’s business.
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Living the 80/20 principle will make your business more valuable
I am sure most of you are familiar with the 80/20 principle. 80 percent of results come form 20% of your efforts. Author Richard Koch has written a number of books on how this principle applies to life and business. In a recent seminar put on by well known marketer Perry Marshal, Richard Koch explains in this short 1m minute video how as a business owner “working hard” is typically bad for him/her and usually bad for the business.
Richard uses the phrase “getting off the hamster wheel” or more importantly as a business owner needing to make the decision to “get off the hamster wheel” and how this decision can make your business more valuable. In this 2m video Richard’s gives 3 reasons business owners should make the decision to get “out of the business.”
1- You will enjoy life more and be happier, allowing you to do things outside of the business.
2- It will increase the value of your business – by getting out of the business and thinking a different way. This is based on observations of owners that are most successful are those that have done very little in the business but set things up for the organization perform.
3- Have no value of equity– can not sell the business. To make the business sellable you have to get out of the business and be able to deliver results with out you being there.
In a previous posting we discussed this very important topic in bringing more value to your business.
Want to learn about selling your business and what your own personal Sellability Score is? Click here.
If you’re interested in learning about your selling options, getting a professional business valuation, or getting help creating an exit strategy, please feel free to CALL Evolution Advisors at 916.993.5433 or visit our website: www.EvoBizSales.com
Source: Perrymarshal.com
Read MoreImportant Business Succession Planning language, by Colleen Watters Attorney at Law
In my experience, many business owners have not included language in their Business Succession Plan to address the needs of the business should the owner(s) become incapacitated or pass away.
If the business formation is a sole proprietorship and the owner utilizes Schedule C for tax purposes, simply listing the business on the Schedule A of their Trust can be sufficient. If the business is valuable, then a discussion regarding business entity formation is important, and assigning the business to the owner’s trust may be appropriate.
Planning techniques are likely to have transfer tax considerations that must be evaluated by an attorney and a CPA. Changes in tax laws, as well as the business owner’s estate value, may require ongoing reevaluation and potential adjustments to the plan by outside advisors.
As the “baby boom” ages, understanding a variety of approaches to planning for business exits and succession planning will grow in importance. Approaching these strategies as a process and integrating a team of legal, tax, accounting, insurance, and financial professionals may help tax and legal professionals address the multitude of situations their clients may face.
When a business owner wants to pass his or her business on to children, they should be certain the children want to continue to operate the business before gifting it to them.
How children relate must be considered as well. If children cannot work amicably, a busniess may not be the proper forum to attempt to force them to work together. Family behaviors and personalities can be an important part of this decision that organizational psychologists and other management professionals specialze in consulting on business family dynamics and succession planning.
Whether the next generation wants to be involved in the business and whether they will treat the business as a “sandbox” to play in or a “golden goose” to be nurtured and valued must be considered before the decision to pass on a busniess is made.
This article was contributed by Colleen Watters, Attorney At Law, a dedicated estate planning and probate lawyer.. She can be reached at:
916.225.3570
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