Business Exit Planning

Business Exit Planning Strategy and Consulting

If you’re contemplating an exit for your business but are unsure of what criteria buyers look for in an acquisition and how to position your business to get top dollar in an exit, exit planning may be a fit for you.

What Business Buyers and Private Equity Groups Look for in Investment Opportunities

There is a wide spectrum in the range that middle market ($1m – $15m EBITDA) companies trade in. We have sold companies for high single-digit multiples of their annual revenue and low single-digit revenues of annual profit. If you are planning to exit your business, it is helpful to start by viewing your business through the lens that business buyers will view it through so that you know how to increase it’s value.

In general, private equity investors and other professional investment groups will want your company to check as many of the below boxes as possible:

  • Recurring Revenue. Ideally your business has sticky, recurring clientele/ customers. While some industries do not lend themselves to this, the industries that do will typically be more desirable to buyers.
  • Size. Companies over $2m EBITDA are generally considered platform eligible and trade at higher valuation multiples than smaller businesses.
  • Leadership Team. Generally speaking, the larger your business is, the more employees you have and the less reliant on you/ the owner it is. This makes for a smoother transition and a higher multiple business.

 

When assessing a company’s market value, we look at these three factors and dozens more. If you are planning to sell your business or take on investors in the coming years, we’d encourage you to contact our team for an intruductory call.

Request A Consultation

If you are currently doing over $2m in annual revenue and entertaining selling your business in the coming years we welcome you to get introduced to discuss our business exit planning and consulting packages.

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