BreakOUT Business Owner's Blog

These short topical articles target specific areas of knowledge where a business owner's thinking and actions can make all the difference.  Knowledge, coupled with the right actions, can and should increase your wealth through the power of your business!

Future Financial Performance

What Impacts a Business's Future Financial Performance?

It is management's job to be able to assess the operating environment for today and tomorrow and to adjust to the changes as they occur. Ideally, managers will pickup early on the trends and re-position the company before there are any lasting detrimental impacts from these "outside" forces.

All of the FACTORS in the Following Areas of the Business have a Notable Effect on Financial Results:

Macro-Economic Factors

  • General business cycle
  • International economic factors
  • Government policies
  • Long-term trends 

Industry Factors

  • Structure of the market place
  • Level of competition
  • Capital intensiveness
  • Long-term trends 

Business Operating Factors

  • Sales & marketing process
  • Production operations
  • Human resources management
  • Long-term trends

Accounting and Financial Factors

  • Interpretation of accounting statement data
  • Financial condition and outlook
  • Long-term trends 

Business Law & Tax Factors

  • ...
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Prepare for a Sale

Get Visible: It Could Make the Difference!

It pays to be prepared for the sale of your business at any time!

You never know when a highly qualified, unique buyer will appear.  The thrust of value engineering and strategic planning is to move your business into a position to engage with a buyer who appears unexpectedly without regret.  Good preparation will permit you to know what to do and have the confidence that your business is ready to be marketed...even if it is in advance of your prior plan.  If you apply the strategies and principles in the value engineering section of MergerMentor.com you will be well on your way to effectively handle and optimize any unique offer that develops.

You should alway be seeking visibility and market position as "that really good business over there" in the publics and competitors' minds.  You can go beyond focusing on operating excellence by recognizing that the market place will develop a characterization of your...

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WHAT IS THE MIDDLE MARKET?

That Private, Quiet Middle Market…

WHAT IS THE MIDDLE MARKET? It's not the Fortune 500 companies, nor is it a two-or three-man job shop.  In the world of mergers and acquisitions, the middle market is sometimes defined as those companies that fall into a size range, by value, from $5 million to $50 million.

What is the private market? 

Unlike those attention grabbing mega-dollar deals involving large publicly owned companies, acquisitions and mergers taking place in the middle market are usually unnoticed by all except those directly involved.  These transactions are normally quiet and private by nature.  This quiet and private middle market world is quite distinct from that of small, main street type businesses you would find advertised in the classified section of any local newspaper.  And yet it does not presume the mega status of deals in the Chrysler-Daimler class.  The middle market tends to be a world unto...

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How to Go Where the Money Is!

How to Put Your Company in the path of the Buyers with the Greatest Purchasing Power

There are more Private Equity Groups (PEGS) active in the market for closely-held businesses than days of the year.  Depending on how you define and count these investors, there are now over 1,500 active professional participants in the US private middle market. 

Most Private Equity Groups has preferences for investments in specific industries.  This is their first screen. The target industries for the more active PEGs is well know within the merger and acquisition community.  Part of the service provides by top middle market acquisition advisors is effective representation of client divestures to multiple groups who they know will have a high level of interest.  In addition to access through advisors, there are websites such as www.PEHub.com that provides a searchable fee-for-information data base. 

These...

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Price vs. Value

Understanding the Gap!

It is normal and natural that price and value perspectives differ between buyers and sellers.  A simple experiment shows what is happening and can help us understand what occurrs as the parties approach the transaction process.

An experiment was designed as follows: One group of students randomly selected was given a cup and another group was not.  The two groups were separated and not in contact with each other nor did they know what question each group was going to be asked.  The group without the cups were independently shown a cup and asked what price they would pay fo it.  The answers centered around $4.00.  The other group, who had the cups in their possess, were each separately asked what they would take to part (sell) with their cup.  These answers centered around $8.00.   

Many experiments of this nature have been repeated with similar results.  What is happening?  It is human...

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