M&A Undervaluation: A Top Concern for Sellers – CFO Magazine
Citizens Corporate Finance & Capital Markets writes for the CFO magazine that mid market business owners are reluctant to hire professionals to assist in the sale of their business partly because of their fear of high costs and because they lack an appreciation for what these advisors actually do.
They go on to argue that the RoI from hiring a competent M&A advisor is high as the process of selling a business is both complex and distracting (from day-to-day operations).
The article touches on valuation, exit preparation, the importance of getting an early start and the significance of having multiple qualified buyers competing on price.
Ideally, it’s recommended that business owners begin preparing their business for sale at least 2 years before they’re ready to sell. Unfortunately this timeframe is not always realistic. What’s important is to work closely with legal, accounting and financial advisors to evaluate the company’s worth, develop specific goals, determine the timing of the sale, create an ideal sale process plan and prepare the correct marketing materials for attracting serious potential acquirers. M&A advisors can even protect business owners from themselves. While owners are experts at how to run their business, they don’t necessarily know how to realistically price, market and sell it. Hiring a professional team helps give business owners the emotional distance and objectivity they need to successfully sell their business…. M&A Undervaluation: A Top Concern for Sellers – CFO Magazine