5 Questions with Kemp Anderson

1. When’s the right time to sell?

There’s no way to time the market, but changes are happening that could impact industry M&A. As taxes go up, you will keep less of what you sell. As the cost of money goes up for buyers, they may factor that into valuations paying less. As inflation goes up, your profit may decline along with offers. The sale of Terminix to Rentokil could slow down activity from or remove one of the largest buyers from the M&A market. Other factors like the war in Ukraine, fuel prices, fleet availability and so on can slow down M&A with global instability making buyers more cautious. This and more factor in both the appetite for M&A and the valuations we see for businesses that sell. It feels like now is potentially a great time to sell as the fallout from all of this seems certain to linger.

2. What’s my business worth?

Buyers have sophisticated valuation models that produce a “range” for your unique company. Sellers leave money on the table when they represent themselves. Both price and terms are critical. There are too many factors to give even a range here, but we give clients an accurate estimate after learning a few key details about their business.

3. Why should I hire a consultant when I could represent myself?

Experience, relationships, expertise, guidance and more. Knowing how to effectively represent you and negotiate a purchase price and terms is a hard-earned skill. Having a leader that calmly and confidently navigates the seller’s team and the buyer to a successful close — that’s priceless.

4. How long does the process take to sell a business?

On average, it takes three to six months from the day we start working. There are many factors that could speed that timeline up or drag it out, but most clients sell within that timeframe.

5. You mentioned a “seller’s team.” What did you mean by that?

The smoothest, most celebrated transactions are achieved when a great team comes together to represent the seller: an experienced M&A attorney, an experienced CPA and the leadership of Kemp Anderson Consulting. The more seasoned and professional the team, the better the outcome for the seller. Experience matters. Note: Be aware of conflict of interest. All parties representing the seller should be independent of each other.