"I wish I had known that.” At VBB Advisors, the leading sell side broker for the convenience services industry, we often hear those words from operators after they sold their business without our assistance. Usually, the seller’s remorse comes from three big mistakes that are easy to avoid.
Big Mistake #1 – Going it alone
As an operator, you were successful in business. That’s why you can now sell your company, a highly coveted possession that you have worked hard to build. One of the reasons for your ongoing success was your ability to utilize experts in several areas including training, technology, accounting and on legal matters.
Now that you have decided to sell your company, this is not the time to stop relying on experts or to use a business broker that might not act in your best interests. Selling your business is potentially a life changing event. Having an attorney and an accountant in your corner is not enough – you need an experienced business intermediary on your team to ensur...
Most business owners are selling for lifestyle, not financial, reasons. Common lifestyle reasons are retirement, becoming tired of the business, health, or the need to move elsewhere. The reason we say that these are lifestyle reasons rather than financial is that the motivation is based on lifestyle considerations, rather than financial. In most business sales of a successful business, the return on the sale proceeds, after taxes on the sale price, will be less than the owner was earning out of the business.
In many sales for lifestyle reasons, the owner may not have a choice on the timing. But, in some others, particularly retirement, there is a choice in timing. Some factors that come into play may be when the owner will collect social security if that is going to be a significant source of income. A financial planner can help a business owner, who wants to retire, see when they can afford to do so. It’s likely that there is some flexibility in that date. The sale price of the busine...
The Mid South region of Canteen led by Tim Bailey has acquired Vendable Systems of Rock Hill, SC in a cash transaction.
Vendable Systems was founded in 1983 by Tom Bucher and Terry Durling. They are headquartered in Rock Hill, SC and have a second facility in Columbia SC. From those locations they provide vending and micro markets throughout the Charlotte and Columbia regions.
Canteen is leasing the Vendable Systems warehouse facility in Rock Hill and will operate a branch from that location. The employees of Vendable Systems will join Canteen in various roles.
I had the privilege of representing Tom and Terry in the transaction.
It is important to understand the various aspects of confidentiality when it comes to selling a business. This can involve understanding what to disclose and when, and the legal obligations that need to be met by business sellers.
Knowing What to Disclose and When
Knowing what to disclose and when can have a significant impact on the sale of your business, so hiring a business broker who can advise on such matters is an important step. From a buyer’s perspective, they want to know as much as possible about the operations and performance of the business so that they can make an informed decision whether or not to offer and at what price.
Account details such as cash flow and existing contracts may be requested. Because of the sensitive nature of some of this information, particularly when it comes to existing relationships and contracts with suppliers and customers, business sellers may be reluctant to reveal more information than is absolutely necessary.
The quarterly IBBA and M&A Source Market Pulse Survey was created to gain an accurate understanding of the market conditions for business being sold. The national survey conducted and compiled by the Pepperdine Private Capital Markets Project is intended to provide a valuable resource to business owners and their advisors.
The following graphs and charts provide highlights of the most recent quarter and provide some guidance as we enter 2019 and beyond. If you are interested in the complete report please contact me at email@example.com.
The intense pace of mergers and acquisitions that shaped Main Street and the Lower Middle Market last year is likely to continue into 2019. But, advisors don’t expect the run to last much longer.
“Increased deal activity is being driven by in part by the low unemployment rate which makes it hard for businesses to grow organically,” said Craig Everett, PhD, Assistant Professor of Finance and Director of the Pepperdine Private Capital Markets Project. “Th...
The following is an excerpt from investor Brent Beshore’s recent book, The Messy Marketplace: Selling Your Business in a World of Imperfect Buyers. Beshore is founder and CEO of adventur.es, a Midwestern-based permanent equity firm.
As a seller, it can be easy to fixate on the numbers. “My business is worth X. I’m going to get Y cash at close.” These figures will represent some of the largest you’ve seen in your lifetime. The focus on valuation is understandable, but remember that structure and terms are equally important in negotiation.
When negotiating with a qualified and trustworthy investor (a.k.a. the type of buyer you probably want), you should take advantage of their expertise. While this may seem counterintuitive, they have spent their careers understanding creative ways to structure a deal, from responsible options and uses of debt to how to properly incentivize existing leadership to ensure a smooth transition. Your best path is to tell them what is important to you and why, a...
CRH Catering, based in Connellsville, PA, has acquired the operating assets of Crescent Vending Service. Crescent was owned and managed by Mark and George Craney serving the greater Philadelphia market. The Craney's will join CRH in strategic roles.
CRH Catering is a full line industrial catering and food service company established in 1968. CRH Catering has grown from a local company started in Connellsville Pennsylvania to one of the largest automatic food and beverage distribution companies in the Mid-Atlantic region. CRH covers most of Pennsylvania, Maryland, and Virginia; and parts of West Virginia, New Jersey, and North Carolina.
Two obvious and essential drivers of business value are business profits and growth potential, but eliminating risk and increasing the quality of your business can also make a dramatic difference in the value. Owners should review all facets of their businesses for improvement. There are three common and critical areas that deserve scrutiny regardless of industry. Here is a partial list of best practices in each of these areas:
▪Recruit and hire a talented management team (COO and CFO at minimum)
▪Cross-train to secure backup for key employees and their duties
▪Implement incentive plans so key employees will stay before
▪Benchmark your compensation and benefits to be sure they are competitive
▪Take HR compliance seriously
▪Upgrade your advisors as you grow
▪Consider a Quality of Earnings engagement to ensure the quality of financials
▪Limit owner personal expenses and document them
▪Resist the temptation to depress earnings and minimize income taxes
Aqua Filter Fresh has acquired the operating assets of Pittsburgh Water Cooler Service. Founded by Dan and Linda Konop, Pittsburgh Water will continue to operate an online business providing parts and equipment related to bottled and filtered water.
Aqua Filter Fresh was founded in 1981 by William and Kathleen Bell. Over the years the business has diversified with the addition of Tyler Mountain Spring Water and a full-line office coffee service. Aqua Filter Fresh will consolidate operations into their existing Pittsburgh location.
Mike Kelner, founder of The Vending Biz Broker, in Charlotte served as the sell side broker during the transaction.
Pflugerville, TX based Accent Food Services has acquired the assets of Central Vending Services of Gaithersburg, MD. This acquisition marks the 1st acquisition of this year for Accent Food Services and the third add-on for the Company’s Mid-Atlantic Division.
Over the past year we have been focusing on the integration of our acquired companies, investing in infrastructure including our facilities, people, and technology, and growing our base. It is exciting to get back to improving our footprint through the right tuck in acquisitions. CVS gives us a great start to continue our growth strategy. I’d like to thank Donald and Elysa Fischer for the opportunity to serve their customers as part of the Accent brand.” said Josh Rosenberg, CEO of Accent.
Accent Food Services is a Total Refreshment Services company operating in ten states and the District of Columbia. We continue to seek strategic acquisitions and top talent. If interested, contact us at firstname.lastname@example.org.