As an organization, we are seeing it more and more.  We are brought in with the sole intent of ramping revenue and subsequent valuation for Baby Boomer owned companies.  They come face to face with that moment of realization that they aren’t going to own their company forever and they have no exit strategy.  That moment of reality almost always leads to “SELL!” which is then followed by “IT IS ONLY WORTH WHAT?”

 That is when our referral and alliance partners call us and the conversation goes something like; “The CEO wants to sell in 24 to 36 months and they want OneAccord to help them double the value of the company.”  Many times, this type of scenario is actually plausible but with the glut of companies that are owned by Boomers hitting the market over the next ten years, it is going to become more and more difficult.

The recommendation is concise.  Extend the vision for your exit strategy beyond the next 2 to 3 years and start ramping valuation now.  Simply put, view other companies outside your industry as competition for your dollars at sale and position yourself to win now for payout in 5 to 10 years. 

If you want validation, listen to John Zayac, President of IBG, an M&A advisory firm.  “Tax-wise there’s some good inducement to sell soon,” he said. “I wouldn’t run out and do it just because of the baby boomer curve, but now is the time to prepare your company for sale. You can typically add about 30 percent to value if you prepare the company years in advance of sale.”

For futher information, visit the attached article from Renee McGaw, Banking & Finance Reporter for the Denver Business Journal.  It is further validation on the opportunity in front of you and hopefully spurs you to take action.  One way or the other.

http://denver.bizjournals.com/denver/stories/2006/05/22/story2.html?hbx=e_abd 

Darin Leonard
Partner – OneAccord