Sophisticated strategies for growing and selling your business

Strategies for managing your business

Are you looking to build your business, but not sure where the capital to do so will come from? Or are you unwilling to risk all of your personal capital to implement a new growth strategy? We can help find a partner to invest with you, so you have the opportunity to grow your business and build value. A well-qualified business partner with relevant experience can potentially help you with your sales efforts, identify opportunities and find efficiencies – in short, guide you in improving key elements of your business.

Another potential benefit to consider: Selling a percentage of your business could result in greater wealth, long term, than an outright sale at this time. This is possible if this new business arrangement is able to enhance the value of your business to the point where the percentage you retain would be comparatively more valuable.

Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Strategies for selling your business

By engaging with our experienced team, we can apply our cumulative knowledge gained over many years of successfully guiding business owners through this major transition and liquidity event.

Pre-sale planning

The key to maximizing the potential value of your business is a thorough and strategic evaluation of the available options. Before pursuing a sale and finalizing an agreement, we will help you carefully consider several factors. Would I benefit more from a cash sale or an all-stock sale? How can I work to ensure the full value of the business is realized? Will post-deal covenants affect my lifestyle?

It is essential to begin the planning process early to minimize delays and disruptions. We have an extensive checklist of important issues to discuss with you within two to three years of a transaction. In preparing your company for sale, we can help you assess the following key areas:

• Management – Stay on after the sale?
• Growth opportunities – Buy or build?
• Sales and customers – What will be the impact of the transaction?
• Financial statements – Audit or quality of earnings in place?
• General housekeeping – Want to “show” well?
• Operations – Any fat to trim?

Weighing valuation

What is your business worth? Valuation is often the single most important factor in the transaction and should be central to the planning. Valuation will factor in your company’s management structure, supply and demand, inventory, past and future income streams, liabilities and expenses, corporate structure and taxes.

The first step to creating a tax-advantaged strategy is establishing the fair market value of your business. For publicly traded companies, this is easily done by looking at an up-to-date stock quote. For privately owned companies or limited partnerships, valuation can be more complex but can also enable even more tax advantages.

Since 1997, Quattuor Capital Partners has formed professional partnerships with top-tier CPA advisory firms that have specialized teams whose primary role is providing valuation services.

Facilitating and structuring a deal

Our team will work with the professionals at Raymond James to contact top strategic buyers to arrange introductory meetings; negotiate and execute nondisclosure agreements (NDAs); distribute executive summary and bid letters; prepare your management team for presentations; prepare definitive agreement with counsel; provide a qualitative assessment of buyers; facilitate confirmatory diligence; and negotiate the final terms of a definitive agreement.

Financing details are crucial here, particularly if you’re looking to the proceeds of a sale to provide some cash flow in retirement. We can help you determine whether it’s more advantageous to take a cash payment, a lump sum or installments. We will develop a range of outcomes and align them with your objectives.

Tax planning

With the partial or full sale of any business, one must also consider the impact of capital gains, as well as income and estate taxes. This is why tax-mitigation strategies are an integral part of our extensive planning. By coordinating with your tax professionals and our planning professionals, our goal is to arrive at the most tax-efficient strategy.

Another important consideration: Creating an estate plan prior to the completion of the sale can create the potential for significant tax savings. We can employ estate planning strategies that can help reduce tax exposure and facilitate the transfer of assets to your chosen beneficiaries.

Wealth transfer

When you consider all the work that went into building your business, it seems that creating a strategy for investing the sale proceeds would be much simpler. However, business owners often do not realize how difficult it can be to manage this process objectively and avoid making decisions that may hinder rather than help their results.

While it can be challenging to relinquish the control you grew accustomed to when managing your business, the transition from running your business to relying on investment professionals to manage the sales proceeds can help ensure you fully reap the rewards of your hard work. Our objective is to help you make the most of your business while simplifying the complexities of wealth.

Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.