What you need to know about making the deal
What affects deal activity?
- Possible federal tax changes
- Value opportunity for sellers
- Uncertain times driving bullish buyers
- Market consolidation
- Boom in baby boomer retirements
- Balance sheet improvements
What to consider when determining whether to sell?
- Year over year quality cash flows
- Resilience through the pandemic
- Whether you are running a lifestyle business or a value business
- Retention of key talent
- Avoid the rush to sell
- Exit planning mindset
- Possibility of waiting until next year
How do family business owners know they are ready to sell?
- I’m done – Many owners no longer want to bear the effort and risks of their business.
- Vacation home effect – Some owners who have spent time working remotely have enjoyed their flexible schedules and time with family and friends.
- Death and taxes – Many owners are at or near retirement and are concerned about the potential for higher corporate, personal income, capital gains and dividend taxes.
- How much is enough? – The wealth accumulated in private companies is illiquid and many owners have determined the after tax proceeds from a sale will last for an extended period of time.
- What’s next? – Owners are wary of the next “crisis” and how it could affect their companies.