Exit & Succession Planning Webinar Part 2 Recap
Planning for a business exit is a complex process that requires the expertise of a team of advisors who can ensure both the successful sale of a business and the maximization of its value.
In a follow-up to our first Exit & Succession Planning webinar, PBO Advisory Group’s recent webinar, “Exit & Succession Planning: Navigating Investment Bankers, CPAs and Funding Options,” featured a moderated panel led by CEO Francesca San Diego. The panel included PBO Advisory Sr. Finance Consultant Josh Siler, ThinkSBA Principal and Founder Ryan Smith, Shoreline Partners Managing Partner Tim Malott, and LevitZacks CEO, President and Partner Victor Ramsauer. The panelists shared their insights on how business owners can prepare for a sale and drive the best possible outcomes by building a team of experts to ensure a successful process and close the deal.
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The Exit & Succession Planning Players
The Investment Banker
As Tim explained, the investment banker serves as the “quarterback” of the sale process, overseeing negotiations and ensuring that the seller gets the best possible deal. He emphasized that one of the key functions of an investment banker is to create competition among potential buyers, a strategy that often results in driving the value of the business upward.
Investment bankers with merger and acquisition experience navigate the intricacies of negotiations, protect confidentiality, and handle market outreach. By tapping into a wide network of prospective buyers, investment bankers ensure that the business is presented to those who can derive the most value from acquiring it — whether they are strategic buyers or private equity firms. This strategy avoids setting an artificial ceiling on the sale price and instead encourages buyers to make competitive offers.
The Finance Team
Josh highlighted the importance of having accurate and transparent financials, noting that potential buyers rely heavily on a company’s financial history and forecasts when making offers. The finance team works to “tell the story” of the business by presenting reliable data on past performance, current financial health, and future projections.
One of the key responsibilities of the finance team is to normalize earnings, which involves adjusting the financials to present an accurate picture of the business’s profitability. For privately held companies, this often means accounting for personal expenses, one-time costs, and other “add-backs” that distort true earnings. By ensuring that financial statements are clear, accurate, and presented in accordance with Generally Accepted Accounting Principles (GAAP), the finance team helps build trust with potential buyers and supports higher valuations.
The CPA
CPAs are often involved early in the exit planning process, as they provide crucial input on the company’s financial structure and tax implications. Victor noted that CPAs are responsible for reviewing financial statements, conducting due diligence, and advising clients on deal structures that maximize tax efficiency. In some cases, CPAs work with clients for years in advance of a sale to ensure that financial records are accurate and in line with market expectations.
CPAs can also model different transaction scenarios to help business owners understand the after-tax impact of a sale. This insight helps owners set realistic expectations and identify any financial adjustments needed to achieve their desired post-sale outcome.
SBA Loan Experts
For smaller companies or those undergoing a partner buyout, SBA financing can play a pivotal role in facilitating the deal. Ryan emphasized that structuring a deal for success requires close collaboration between the buyer, seller, and lender. Whether it’s securing financing for a buyout or acquiring new capital to fund a purchase, SBA loan experts help buyers navigate the complexities of the financing process.
SBA loans come with specific requirements and restrictions, such as limits on seller notes and earnouts. Ryan stressed the importance of preparing well in advance, particularly when key employees or partners are involved in a buyout. If a buyer isn’t adequately prepared with the necessary equity injection, for example, the seller may need to finance part of the transaction or find creative ways to structure the deal to ensure its success.
PBO Advisory Is Here to Help
Selling a business is a full-time job, and it’s important for business owners to continue running their companies while the professionals handle the sale process. By assembling the right team, owners can ensure that they get the best possible outcome from the market — both in terms of deal value and a smooth transition.
Ready to begin planning your successful exit? Reach out to PBO Advisory to start building the team that will help you achieve the best outcome for your business.
Related Reading
- Exit Planning: Four Steps to Take Before Selling Your Business
- How to Choose the Best Exit Planning Option for Your Business
- The Human Side of Succession: Why People Matter
Francesca San Diego
CEO & Member
[email protected]
(858) 935-4846
