You've made the decision to sell your business, move on to something else, retire or simply cash out. Not only is this a frightening time in anyone's life, but it is definitely a time where proper planning could make all the difference in the world! Don't risk entering bad negotiations with unscrupulous buyers, leaving money on the table or handling your disassociation improperly.
An exit strategy of any business organization can fall into one of three categories: Death, Disability, Divorce, Depart. While RCG can assist any principal with viable plans of succession, this section will focus on the last "D" - "Depart"; most specifically, departing with a great return on your investment!
Where to Start:
It's never too early to start compiling the vital information related to your business. This includes, but is not limited to: tax returns, employee data, incorporation (LLC/P) documents, cursory inventory, furniture/fixtures/equipment (FFE), accounts payable/receivables, monthly expenses, etc. Click for a comprehensive list. Once this task has been started, CONTACT RCG for guidance with seeing this most important transaction of your financial life to its lucrative conclusion. From day one, every business owner should have an exit strategy and if you've been preparing for liquidation or merger, you are already ahead and have a good idea how to proceed with attaining your goal.
Just as you can change the oil in your car, build kitchen cabinets, replace a toilet or faucet, or paint your own house, you can certainly liquidate your business or engage in M&A negotiations yourself. But why don't most people do the things alluded to initially? A couple of very important reasons: Lack of experience, know-how, time, and confidence in a positive outcome. A qualified M&A specialist is more than a "broker". A broker, most often those "national chain" typically employs a "dartboard" approach, securing many listings without discerning their quality, splashing websites and other venues with open offers to sell and sits back, hoping for a hit. An M&A specialist will typically only accept projects that fit the ideals of the firm and projects that will net principals the best ROI. Principals who waste months with the wrong "broker" will find themselves in a possible irreversibly harming situation. Businesses that are received as "for sale", "in trouble", "moving", "closing" or have multiple deals "fall through", struggle immensely from bad publicity. The ability to attract talent, decreasing sales and an impact on customer loyalty are the effects of an inefficient liquidation or merger. You've worked long and hard and only get to do this once! You don't have to hire RCG for your M&A or liquidation but through our experience, you should at least understand: NEVER leave an attorney or accountant to handle your transaction alone, NEVER use a national chain of brokers, hobbyists, real estate agents or business coaches, NEVER use a broker who is unwilling to co-broke!
What will RCG do For Principals:
The first thing RCG will do is sit down and LISTEN to the goals and aspirations of a business principal and/or board of directors. This vitally important step is often overlooked in many M&A transactions because only realistic expectations will result in a positive transaction. Secondly, a true and accurate business evaluation will be undertaken. There is no charge for this if associated with a listing. A business evaluation for the benefit of a FSBO or the interest of an owner can also be prepared. Since RCG comprises talented corporate consultants, the continuing robust operation of your business can be assured. It is important not to "wind down" or take a lethargic attitude towards the operation of your business during an M&A or liquidation transaction.
RCG once accepted a client who was harmed by a well-intentioned but poorly-informed attorney during a liquidation worth about $500,000. A buyer, who reported to have liquidity to engage in a non-leveraged acquisition, submitted a LOI to the attorney of a small manufacturing business owner who was retiring. The paralegal or office secretary (it was unclear who), released some initial financials to the "buyer". Because of this, the attorney thought an NDA was properly executed and he subsequently released some intellectual property information, client lists, employee contacts and shop procedures. The "buyer" turned out to be NOT a buyer at all but the son-in-law of a competitor in the next town! As you can see, this information in the hands of a competitor was devastating! It did end happily though but not after losing about 36mos.
RCG has resources to engage in ample due diligence when it comes to potential buyers or members of an investment group. As a principal, you don't have to worry about the financial ability of anyone to buy. This saves time and reputation.
A comprehensive NDA, detailed Buyer Profile and proven, unwavering aggressive policies for dealing with letters of intent/engagement are paramount for any M&A specialist and it is your responsibility as a business owner to see to it the specialist you choose is proficient in these areas.
20% of all businesses change hands each year and it also a proven fact that acquired businesses have a 300% higher success rate after five years than start-ups. If you are ready to exercise your entrepreneurial muscles, you need a qualified M&A specialist to represent you when investigating businesses, dealing with financing and negotiating a transaction. RCG will engage in comprehensive counseling and begin to leverage vast contacts to identify the best fit for each individual business purchaser. Equally aggressive negotiations will be entered into on your behalf, ensuring your acquisition is the best one to net a great ROI and personal fulfillment while handling any intellectual property rights, non-competes and other proprietary concerns. If necessary, RCG will also help with venture capital, angel funding and even 504 and 7(a) SBA funding. (NOTE: A non-refundable retainer is required in the absence of a committed funding vehicle.) **FINANCING**
Whatever your reason for investigating an acquisition: Making more money, Gaining access to new products/markets, Implement vertical integration, Taking advantage of economies of scale, or Buying out a competitor, a talented and connected M&A advisor will prove invaluable when performing due diligence, successor liability and engaging in negotiations. RCG never charges a buyers' premium!
RCG is a full service advocate for business owners and principals of all asset levels. The intent of RCG is to see an owner through a successful M&A or liquidation to the end. RCG will also counsel principals on proper disassociation. A client came to RCG, 10 years after his accountant sold his restaurant. Moving several times, The State of CT finally found him, requesting back business entity tax, minimum corporation taxes and more because the accountant never advised closing the corporation! While this is inconvenient enough, there are also other reasons to execute a proper exit strategy.
The best part if liquidating is you are free to seek a new opportunity, help a dependent enter a business, start a new business, or be an angel investor yourself. RCG can assist with any or all of these areas.