Value Drivers or Life Drivers?

Value Drivers or Life Drivers?

I recently caught up on some reading about the value drivers to consider when selling a business. The consistent message was, just focus on 5 or 10 value drivers and you’ll maximize the value of your business when you sell it. My reaction: there’s a lot more to “maximizing the value” than this.

When I meet with a business owner, I get to know the business history, the business strengths and weaknesses (i.e. the value drivers), and other key pieces of information. I’ll deliver an estimate of the business value and review it with the owner. And sometimes, the response is … “I understand it, but I’m not going to sell my company for that”. Translation, the owner just isn’t ready to go to market … regardless of the “value drivers”.

Here’s what I’ve learned over the past 20-years. When a business owner is considering “exiting” their business, something has happened in their world, something has changed…let’s call them the life drivers.

For instance:

  • A personal matter – health issue, financial change, moving somewhere
  • A family matter that needs attention
  • Concern about surviving the next “market correction”
  • Worry how the next surge/variant of COVID will impact business
  • Just not as attentive or as “connected” to the business
  • “I don’t know what it is, but something is keeping me up at night”

Here’s my point.

    • Value drivers matter but generally, life drivers are the real motivation
    • Life drivers are private and personal; sometimes hard to see them
    • Understand how the life drivers might impact the negotiation
    • In the end, the maximum value of the business is the result of good-faith negotiations by both parties. And there’s no list of value driver for that.

Like you, we’re small business owners. We get it, and we’d love to discuss it with you. Give us a call for a free consultation.  We appreciate the opportunity to help out.


This post was written by Eddie Davis, C.P.A., C.V.A. , Harvest Business Advisors partner.

 

Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

 

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.

 

We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.
Business for Sale: Cyber Security Government Contractor

Business for Sale: Cyber Security Government Contractor

Harvest Business Advisors is pleased to announce a recent successful transaction.
Congratulations to the new owners!
We extend our best wishes to the sellers as they embark on their new adventures.

If you are interested in a business such as this one, please contact info@HarvestBusinessAdvisors.com or 877-838-4966

This government contractor (federal, state and local agencies) was established in 1995 and is recognized for their expertise in assessing cyber security threats and related risk analysis

Since 2001, the company transitioned to provide cyber security support to their clients.

In 2008, the company was granted a Top-Secret Facilities Clearance by the Department of Defense. Several long-term key senior staff members have approved security clearances.

The company is well known and well respected. In addition, this company has a history of financial stability and recurring revenues. Current contracts have forward funding.

The company has a stable revenue stream ($1mm+ annually) and cash flow ($250,000).  No significant additional capital investment needed

The ideal buyer would be a strategic buyer in search of new opportunities and/or diversification or an industry buyer seeking rapid growth opportunities with an experienced management team.

Seller will consider all serious offers from qualified buyers.

If you’d like to discuss this business opportunity, please contact Eddie Davis (EDavis@HarvestBusiness.com) at 301-325-7687.

The Harvest Business Advisors Sales Process:

  1. Harvest Business Advisors will send you a Non-Disclosure Agreement
  2. Please provide a brief summary of your background/experience (LinkedIn)
  3. Introductory conversation with Harvest Business Advisors, includes financial capability
  4. Qualified Buyers will receive Confidential Business Review
  5. Buyers will present non-binding LOI including deal structure and financing requirements
  6. Schedule introductory meetings with Seller
  7. Prepare schedules for completion of buyer diligence and closing

Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

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