Business Exit Stories

An e-commerce business where some of the metrics on the financial statements just didn’t seem to add up. One of the issues had to do with the gross margins on some of the products sold being north of 75%, which was far above the norm for this business segment. This issue caused the buyer to dig deeper.

How being transparent can cut both ways, but not enough or too much transparency can both kill deals. 

A transaction that took place during COVID and how top-tier execution doubled the value of a restaurant when other restaurants were failing left and right.

A 35-year-old landscaping business failed to monetize its full enterprise value and why the seller wasn’t upset about this and, if you were in this position, why you probably wouldn’t be upset either.

Lauren Drummond-Dale
Coastal Consultants LLC
D’Iberville. Mississippi
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The post When Issues Surface in Due Diligence, You May Wish to Take A 2nd, 3rd, and 4th Look At Other Critical Aspects Of The Business appeared first on Business Exit Stories.

A chemist that solves a problem his wife had with some of her hair and cosmetic beauty products line while working full time. His side hustle turned into a business that exploded into a $19M business virtually overnight. Hyper growth when scaling nearly forced an early exit and disaster was averted. 

An absentee owner business was acquired and how leverage was used to get a 10X return when properly managed. 

A high school graduate that made money mowing lawns turned this part time job into a multi-million dollar exit by smartly building his business a day at a time and planning his exit like a pro. 

An entrepreneur deciding not to go to medical school was probably a smart financial decision. While most doctors were finishing up their residency and beginning their medical practice, this entrepreneur had banked over $15M on the sale of his medical tech company. 

Matt Wochele & J. Snypp
Preferred Brokers, Inc.
Atlanta, Georgia
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The post From Making Money as a Side Hustle to a $19M Business Losing Money appeared first on Business Exit Stories.

A specialty heavy equipment company that dominated a highly profitable niche decided to sell. A private equity firm suggested by the M&A advisor expressed interest and made a generous offer. However, the seller’s attorney had dealt with this Private Equity from before and had formed some opinions on them. What shouldn’t have happened, ended up happening and it derailed the deal.

How 50/50 partners had taken over a company from the founder’s family and although they were good at their jobs in the company, they weren’t naturally born entrepreneurs and make rookie mistakes as new owners that brought the company to the brink of insolvency. Yet they went from a few hundred thousand dollars to delaying their exit and selling the business for millions and retaining equity in the company that was later sold for millions more.

How a creative deal structure can take a company with multiple revenue streams and package each of these revenue streams to different buyers with an agreement for future collaboration. This resulted in an exit value being worth more than if the company with all of its revenue streams had been sold to a single buyer.

Joseph Guarino
LINK
Lancaster, Pennsylvania
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The post Going from a Meager Six Figure Walk Away Exit Offer to Millions Plus a Second Bite of the Apple on a Subsequent Sale appeared first on Business Exit Stories.

An entrepreneur decided to sell his business, and then when he was at the closing table, backed out. He did this not once but twice.

Three partners with equal ownership in a business they ran for decades had different goals and objectives which caused an extended five-year process of getting the business sold.

Russian immigrants that built a successful business not once, but twice and how one their businesses became a lot more successful than the other. They decided to sell the first business to focus on the more profitable one. Sometimes focus is the key to ultimate success.

An entrepreneur that started a business in college and grew it over decades until a diagnosis of cancer changed everything.

Paul Visokey
Stony Hill Advisors
Philadelphia, Pennsylvania
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The post How An Entrepreneur Exited Their Business After A Cancer Diagnosis appeared first on Business Exit Stories.

A business owner’s lack of transparency with his M&A Advisor ended up taking his business sale from a sure deal to zero and the IRS killed this deal without breaking a sweat.

A buyer walked away from a deal allowing the seller to re-sell the business again in a matter of months and keep all the sales proceeds from the first deal in a practice called double dipping.

If you are growing your business through acquisitions, regardless of how messy an acquisition is, these can become your most profitable deals.

Taking reasonable risk in selling your business can turn out well for all parties if you manage this type of risk prudently.

Eric Gagnon
We Sell Restaurants
Palm Coast, Florida
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The post How the IRS Can Kill a Deal Without Breaking a Sweat appeared first on Business Exit Stories.

Why working capital requirements can often be used strategically by buyers as they are designed to reduce the effective sales price of a business. Unaware sellers can be surprised when they end up with a lot less than they anticipated because they allowed the working capital to be manipulated either by how working capital was defined or the amount required. 

A business went from $50M in sales to ceasing operations and was still sold for a considerable sum. When you know where the intrinsic value in a business is, the business can still be monetized, even as a non-operating entity. 

A tool that every entrepreneur and their advisors should use as they evaluate offers to gain insights on what the net after tax proceeds are going to be after the sale.

Using multi-state tax arbitrage to reduce taxation on sale proceeds if you can do advanced tax planning. This is especially important if you live and operate in a high taxation state. 

Roman Basi
Advanced Accounting
Lambertville, Michigan
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The post How A Business Went From $50 Million In Sales To Ceasing Operations And Still Got Sold. appeared first on Business Exit Stories.

Although a comprehensive tax plan was painstakingly crafted and designed, a client went dark for nearly nine months. Less than a week before the sale was to take place the client called and asked if everything was ready to go. A significant portion of the tax planning strategies that had been crafted couldn’t be executed or implemented in a matter of days.

Four partners in an Amazon e-commerce business positioned their business for sale, it was discovered that they had no written partnership agreement and only a handshake gentleman’s agreement. As the business moved towards the sale the lack of a decision making mechanism became problematic.

A husband and wife team that had started a business as a side hustle eventually turned it into a full-time business and eventually an eight figure exit. They had done extensive tax planning for their estate and had planned on leaving a bulk of their estate to their favorite charity. What they didn’t realize is they could do the same while they were living and save millions of dollars in taxes when they sold their business, and then have those tax savings benefit their charity.

A young woman who was 22 years old and a freshman in college started a business targeting her peer group. After growing her business for a few years she wanted to sell her business and go back to college. An exit strategy and a tax plan was crafted to eliminate all $87,000 worth of taxes and use those savings to fund her college education.

Shanyn Stewart
Advanced Accounting
Lambertville, Michigan
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The post How A Tax Plan Can Save Millions In A Business Sale appeared first on Business Exit Stories.

A transactional story of an infrastructure construction company that was equipment intensive and had accumulated nearly five times more equipment on the books than it needed. While the company has strong free cash flow, the amount of equipment on the books made it a difficult to capture anything above the equipment book value on the balance sheet. How it was positioned while nearly impossible to sell to literally doubling the business value and getting it sold quickly, far quicker than the seller ever thought possible.

A retailer that had 75% more inventory than it needed, making the business difficult to sell. How a strategy called an owner financed floor plan allowed both the buyer and sell to make out like bandits.

How any business owner that has deals in the pipeline should structure their sales allowing them to capture some of this future revenue as well as benefiting the buyer with free financing.

An entrepreneur who made it a practice to always take a significant amount of cash out of the business by not reporting cash sales, and how after he sold the business, this practice literally got him seven years in the state penitentiary.

Bob Ross
Fuller-Ross Group
Plano, Texas
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The post How A Nearly Impossible To Sell Business Sold Quickly For Double Its Value appeared first on Business Exit Stories.

A commercial janitorial business dramatically increased their gross margins and profitability the year before it sold. However, the source of the profits wasn’t from excellent execution or dramatically increases sales. When the buyers found out why the performance was so good, they sued the seller.

A juvenile based sports manufacturing and import company had multiple offers on the table but decided to aggressively the countered all the offers. The counteroffers were all rejected. A year later the business was sold for the book value of inventory.

Get multiple strategic bidders at the table and interesting things can happen. Sometimes being in the right place at the right time just happens. You can’t plan for it, but when it happens you need to focus on not doing something that will screw the sale up. 

Ian MacLachlan
BTI Group
Santa Cruz, California
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The post How an Entrepreneur Was Able to Jack Up Profits Only to Be Sued After the Business Sold appeared first on Business Exit Stories.

A highly profitable business services company that has five highly qualified partners in the business handling the key functions of the company. These partners were committed to the business and worked 70-80 hours per week for years. Yet even though this company was highly profitable, it turned out to be unsellable.

A $35M tortilla company with millions in profits company that couldn’t be sold due to critical strategic mistakes that the entrepreneur made.

The wrong attorney nearly crashed a deal and only when the attorney was fired, did the deal close.

How having the right advisor that positions the company properly generated ten offers with the competition for the deal heating up, causing the offering price to escalate and the terms get better for the seller. 

Gerald Kong
Trinity Transaction Advisory, LLC
Dallas, Texas
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The post How to Make a $28M Highly Profitable Company Worth Nothing and Unsaleable in One Easy Step appeared first on Business Exit Stories.