Aberdeen Advisors, Inc.

Mr Wonderful shared his thoughts about the economy yesterday at ACG Capital Connection. He was bullish on the economy. This was consistent with our private equity friends too!

A recent Supreme Court case,?Connelly v. United States, made an important ruling related to succession planning for closely held businesses. Learn what the ruling says, how it could affect you, and steps you could take to avoid paying more in taxes than is necessary.? https://lnkd.in/esXdKZWn

Here is a recap of some of the key items that were discussed by our panel at our event this past Tuesday regarding "How to prepare to sell your business". Special thanks to Arianna Beetz, PhD, NASM CNC for compiling these! Psychology: ? Prepare psychologically to sell your business--what will you do after? Are you ready to let go? ? Approach business like a long game, much like sports—success requires extensive hours (think 10,000 hours). ? Ensure your team and buyers are on your side; strong relationships and alignment make business smoother. Financial Realism and Flexibility: ? Be realistic about your funding needs after selling. You may not need as much upfront if reinvestment is part of your strategy. ? Understand your cash and equity mix. For example, a 70% cash and 30% equity split is common, while an earn-out can be complicated. Planning for Sale and Success: ? Know who you’ll sell to, why you’re selling, and work with trusted advisors and investment bankers (IB) who are aligned with your goals. Have clear numbers and metrics that matter to your buyer. ? If you’re a solo practitioner in professional services, be aware that selling may not be feasible—plan accordingly. ? Estate planning should happen before any Letter of Intent (LOI) is signed; structure your business with future sale potential in mind, even for family transfers. Legal and Structural Preparedness: ? Choose the right structure for your business, as this influences your final payout. Ensure full transparency—disclose, disclose, disclose! ? When working with investment bankers, prioritize fee structures that align with your success; ideally, they’re paid upon your successful sale. Valuation Realism and Deal Prep: ? Only about 20% of businesses succeed industry-wide. Ask: Is my business actually sellable? Gather data to validate a realistic valuation. ? The biggest deal-killer is overvaluing your business, so maintain a balanced perspective and gather outside opinions. Buyer-Seller Relationship Dynamics: ? Buyers should connect deeply with sellers, proving they’re invested in closing the deal and can offer intangibles that make a difference. Operational Efficiency for Founders: ? Run lean—keep overhead low, grow your margins, and diversify revenue streams to safeguard cash flow. ? Start building a team now; it will be essential for scaling and increasing your business’s value over time.