American Fortune Mergers & Acquisitions Cautions Baby Boomers About Market Timing to Sell a Business

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American Fortune released today its cautions to baby-boomer business owners about the sale of their business. “Due to the rapidly increasing number of business owners turning 65+ in this country, I find it extremely important for business owners to strategize about market timing for selling a business,” advises Brian Mazar, CEO and Managing Director of American Fortune Mergers & Acquisitions. “I anticipate a significant increase in the number of business that will go up for sale in the upcoming years and business owners will need to be savvier to make their business stand out from the others. Market timing will play an increasingly important role in the strategy to sell a business so we have released our best advice to make owners aware.”

American Fortune's CEO

Owners should be aware of the inherent conflict that arises with running a business and preparing it for sale

American Fortune released today its cautions to baby-boomer business owners wanting to sell a business. “Due to the rapidly increasing number of business owners turning 65+ in this country, I find it extremely important for business owners to strategize about market timing for selling a business,” advises Brian Mazar, CEO and Managing Director of American Fortune Mergers & Acquisitions. “I anticipate a significant increase in the number of business that will go up for sale in the upcoming years and business owners will need to be savvier to make their business stand out from the others. Market timing will play an increasingly important role in the strategy to sell a business so we have released our best advice to make owners aware.”

Most business owners are so busy running the day-to-day operations of their business that they do not give ample consideration to a future sale of their business. Before selling a business, there are many factors to address and adequate preparation can maximize the return to the owner.

In a perfect world, the best time to sell a business is when the business is performing well with future projections looking even better, the national economy is strong and the industry is getting a lot of attention from Wall Street investors. However, regardless of the state of the economy or the industry, there are certain things owners can do to make their business sell-able and as attractive as possible to potential purchasers.

To build market value, address the following items:

  •     Standardize and document all company procedures
  •     Eliminate liabilities or liens and resolve any outstanding litigation
  •     Investigate transferability of leases and sales & supplier contracts
  •     Perform maintenance on company equipment to ensure good operating condition
  •     Secure key employees with employment contracts
  •     Eliminate non-performing or non-contributing employees from the payroll
  •     Establish a management team that can operate without the current owner
  •     Reduce reliance on one or two large customers for the majority of sales
  •     Spruce up the physical aspects of the business facility
  •     Have clean, verifiable financial statements for the past three years

To improve cash flow, take the following action:

  •     Reduce unnecessary inventory
  •     Collect any outstanding receivables
  •     Re-negotiate favorable key supply contracts
  •     Reduce personal adjustments on Income Statements
  •     Ensure financial controls are established

“Owners should be aware of the inherent conflict that arises with running a business and preparing it for sale,” warns Mazar. “Many businesses are run with the objective of minimizing tax liabilities. Unfortunately, the same techniques and accounting practices that minimize taxes also minimize the value of a business.” Ideally, plans to sell a business should be made three to five years in advance of the anticipated sale. This will allow adequate time to make changes and demonstrate a track record of maximum profits.

In addition to setting a future target date to sell their business, a business owner should ask themselves what they want to get out of the sale of their business. Do they just want to finance their retirement? Is it important that their son or daughter remains with the business? Can they gain tax benefits by financing part of the sales price? Do they want to ensure the new owner will treat their customers with the same level of service? Make a list of priorities and seek the advice of business professionals to ensure there are no surprises during the process of selling a business.

American Fortune Mergers & Acquisitions, LLC is a nation-wide firm that provides services in the areas of growth-to-exit planning, mergers and acquisitions and business valuations for businesses with revenues between $3 million and $100 million. American Fortune was founded by industry veteran Brian S. Mazar who developed a unique buying process that is sell-side driven. Due to this process, American Fortune successfully sells their businesses at an average of 98% their listed price.

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