70% of businesses fail to sell
70% of family businesses don’t make it through the second generation
75% of business sellers are unhappy with the outcome
10% of business sales achieve the value expected
WHY is this ALL True.
PLANNING. The awful truth is most owners don’t plan their transition properly. Selling your business takes as much care as running your business if you want to do it successfully. This is not a yard sale. This is your blood, sweat and tears.
The time to start is now.
Here at RBC Wealth Management, we have been accumulating expertise and services that can help you navigate this journey successfully, no matter where you are in the process.
The two most important first steps are 1)What do you need to live the next phase of your life the way you want to 2) How much is my business worth to a buyer. These are not back of the napkin, off the cuff, guesses. These have to be determined with care and a reasonable amount of precision.
On the personal side, we offer the RBC Wealth Planning tool, a customized analysis of your assets, income needs, goals, wishes and family concerns. How much do I need. We consider it the necessary first step and an obligation-free way to get to know each other.
Business value requires business data, possibly some revising of the inputs for a buyer’s mentality and knowledge of the marketplace, industries and multiples. Depending on where you are in the process, doing this without cost is possible but may not be ideal if going to market soon is your goal.
If the business value is not where it needs to be you obviously need to increase it. Growth and profitability are the two obvious metrics of improvement and we offer all the services and tools to help with business management; lending, equipment leasing, retirement and executive benefit consulting, cash management (insured or aggressive).
Selecting the format of the transaction is another major decision and again we have developed and collected the tools and expertise to help you in a variety of ways.
- If this is a family business transition, the structure must be sensitive to both dollars and emotions. Our family office/high net worth Echelon team is dedicated to these situations and will guide you along the path of tax efficiency, estate planning, fairness and family dynamics. Their expertise and guidance is gratis for our high net worth clients and prospects.
- For those interested in ESOPs, RBC brought one of the country’s leading ESOP advisory teams over from a competitor a few years ago and they are available to us to discuss the pros and cons of this format and lead you through the execution, if it is your eventual choice. There is a lot needed to realize a successful ESOP transition and its special tax benefits. .
- If neither of the above are the direction and this will be a sale to Private Equity or a Strategic Buyer, our size puts us in a unique position. While we are a top ten global bank, we are not Goldman or Morgan here in the states. Middle market deals that don’t get their attention are our bread and butter. And that enables us to attract a significant stable of boutique M&A firms who will compete for your
business before any contracts are signed. Yes, you get to hold a bake off before you have to choose who to work with.
That size profile -- intimate US footprint in a global powerhouse -- is an important part of the RBC personality as well as our story. It enables us to bring these specialized services to the closely held community. It enables us to build an award winning, owner focused team, The Dimino Group, with business focused advisors who bring their own, personal owner experience to the table. The tools for exit planning are important but delivering them with sensitivity to the emotional decisions that must be made is crucial.
Going down the transition road is a big step. Choosing your team of advisors is a big step. We don’t expect you to read this blog and sign us up. But we hope we’ve demonstrated our business advisor focus and expertise and it will spur you to give us a call and start a conversation about your transition. Start your planning now.