M&A Advisor

Do M&A Advisors Add Value?

Billy Fink, Marketing Manager at Axial just published a great article in LinkedIn entitled “M&A Advisors Proven to Improve Valuations“. He states that advisors, 1) create competition in the sales process, 2) are more important in private transactions and 3) provide extra-valuation benefits.  And he is exactly right — a good M&A advisor should create far more value to the seller than the fee paid. This opens up another area for discussion:  What is the proper role for third-party advisors when growing & ultimately selling a business? You’ve probably met the CEO who insists that he/she can do the accounting, corporate legal reviews, raise money for the business, be the H/R director and find the right buyer for the business.  If you’ve met this person, you know that this CEO is wasting precious resources.  Even if the CEO is multi-talented, if doing the accounting is his/her best use of time, …

swiss franc

Swiss Franc … Why Should We Care?

Most people probably haven’t noticed, but the Swiss government did something extraordinary overnight. During the last European crisis, money flooded into the relatively safe Swiss currency.  The Swiss reaction was to fix their currency to the Euro, which at the time helped prop up the Euro and stopped the rise of the Swiss Franc.  Switzerland is not part of the Euro currency club.  The concept was that if the Swiss Franc continued its sharp rise that Swiss companies would be penalized in the world market.  Their goods and services would become far more expensive in other currencies, most especially in the Euro zone, but also in America, Japan & China. Alas, that move was reversed last night. Why would the Swiss government suddenly and without warning reverse its decision to tie its currency & the country to the European Union? Only one answer makes sense:  The European Zone has slipped …

entrepreneurial ceo

Searching For 3 Entrepreneurial CEOs in 2015

Business Owner / CEOs who want to sell some or all of their business often have a problem.  Some CEOs are savvy enough to know they have the problem — most may never know, and that lack of knowledge will result either in failure to find a buyer, or in a purchase price well below what is possible. One CEO (we will call him George) didn’t realize that he had a problem until after a failed attempt to sell his business.  We represented George as a sell side investment banking adviser.  He came to us with a buyer and our job was to advise him in the transaction.  Result?  We advised him NOT to do the deal – and he agreed. Why would we advise NOT to do a deal?  After all, our fee is based on a transaction getting done! Easy answer – the price & terms he was …

wellness

“Wellness” in a Physician’s Practice — What does it look like?

I’ve become convinced that an ever growing % of the population is ready to pay for “wellness” as part of their medical care. Why? Over the past few years, deductibles & co-pays have skyrocketed. People are paying more out of pocket and getting the same or less healthcare. What if people could pay what they are now paying and get better healthcare? The baby boomers are healthier & more interested in integrative medicine than ever before. If a quality alternative existed, I believe they would be attracted. So this is the question … What do you think would need to be part of a Wellness Practice. Some docs are promoting Wellness, but don’t act as the patients PC physician. I’m inclined to combine the two so a single physician directs my care. What’s included? Testing? Infusion? Vitamins? Hormone treatments? Nutrition? I’d like to hear from you — if you were …

Raising Equity

5 Common Mistakes to Avoid When Raising Equity

Raising capital for a business, whether it is a start-up or a mature company, can be an extraordinarily frustrating and time consuming experience. Entrepreneurs want to operate and grow their business, not raise capital. But the fact is that for most businesses, the entrepreneur or CEO is responsible for raising capital. When attempting to raise capital, CEO’s very often make some crucial mistakes. These mistakes not only can dictate whether or not the business will be able to raise capital, but also how long it will take and the ultimate cost of the capital. Using the wrong assumptions, raising capital can be impossible. We believe there are 5 common mistakes that CEO’s make when raising capital: 1. Unrealistic Expectations of Value Most of us has watched Shark Tank at least once. Just watch one episode and you will likely see this mistake. The entrepreneur goes to professional investors with a …

No Growth to Doubling Revenue in 2 Years – Case Study

In October 2012, we began to advise a $12 million company that hadn’t grown in 5 years. It was a good company, producing about 15% EBITDA margins and well over $1 million annually in free cash flow. We had known the CEO for several years and knew he was about three years away from wanting to sell his business and retire. “How about if we double or triple your business before we sell it?”, I asked. He thought I was on some illegal substance – but not so. After talking further, we were retained to help him create a growth plan, to determine what capital was needed and to find the capital. Result? October 2014, LTM revenue is in excess of $23 million. By doubling revenues, margins have improved slightly, and the equity value of his business (he owns 100%) has more than tripled. CEOs – good CEOs – often …