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Valuing a Business: The Buyer’s Perspective (Part 1)
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My guest today is Bobby Kingsbury, a principal at a private equity firm called MCM Capital. MCM has been in business for 26 years and invests in small to medium-sized niche businesses. On today’s episode, Bobby tells me how MCM screens its potential investments.
We discuss how the private equity business works and how MCM Capital stands out among their competitors. He offers the questions the equity firm asks a potential client and also the questions the business seller should ask the equity firm. Bobby also stresses the importance of having clean financial records to present to the equity firm. He suggests ways to better present your business to get a clearer and firmer price point for your business.
There are a lot of nightmare stories out there regarding private equity firms. However, MCM Capital is one of the more honest firms that want to give their sellers the best deal possible. Bobby explains MCM’s motives in their screening process and assures listeners that MCM Capital wants to be a partner with companies, not a dictator.
If you are considering working with a private equity firm, this episode is a good resource for you. My next episode will be the second part of this topic. Mark Calcaterra, one of Bobby’s sellers will join us to describe what his experience with Bobby and MCM Capital. So, you will be seeing both sides of the process.
You will learn about:
Welcome to part one of this two-part topic.
MCM Capital’s business history.
What Bobby and MCM look for when evaluating a client.
How MCM does business with their clients (where do they get the money?)
Why private equity firms are necessary.
What MCM does for a small business.
What to ask a private equity firm before you begin due diligence.
How to build a relationship with potential clients.
How to provide value to a firm instead of just money.
How Bobby partners with the business owners.
What to expect when doing due diligence.
The benefit of getting a Quality of Earnings (QOE.)
How to create a win-win situation along with an equity firm.
Why an owner needs to be involved in the company.
Rep Warranty Insurance reduces risk.
What do things like customer and supplier concentration tell an equity firm about your business?
How Bobby helps a business owner move in a strategic direction.
What Bobby and MCM look for in a business team.
The importance of a CFO for your business.
Hiring is a form of investment in a company.
How to keep a business owner involved in the company.
When can a business owner walk away from the business?
Bobby’s parting thoughts.
Today we’re taking a look at private equity from an insider’s perspective. Bobby Kingsbury (who you may remember from a previous show of mine) talks about how private equity works, in general, and how his company is doing business differently, in particular.
You’ll want to pay close attention to this show if you are even contempla
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My guest today is Bobby Kingsbury, a principal at a private equity firm called MCM Capital. MCM has been in business for 26 years and invests in small to medium-sized niche businesses. On today’s episode, Bobby tells me how MCM screens its potential investments.
We discuss how the private equity business works and how MCM Capital stands out among their competitors. He offers the questions the equity firm asks a potential client and also the questions the business seller should ask the equity firm. Bobby also stresses the importance of having clean financial records to present to the equity firm. He suggests ways to better present your business to get a clearer and firmer price point for your business.
There are a lot of nightmare stories out there regarding private equity firms. However, MCM Capital is one of the more honest firms that want to give their sellers the best deal possible. Bobby explains MCM’s motives in their screening process and assures listeners that MCM Capital wants to be a partner with companies, not a dictator.
If you are considering working with a private equity firm, this episode is a good resource for you. My next episode will be the second part of this topic. Mark Calcaterra, one of Bobby’s sellers will join us to describe what his experience with Bobby and MCM Capital. So, you will be seeing both sides of the process.
You will learn about:
Welcome to part one of this two-part topic.
MCM Capital’s business history.
What Bobby and MCM look for when evaluating a client.
How MCM does business with their clients (where do they get the money?)
Why private equity firms are necessary.
What MCM does for a small business.
What to ask a private equity firm before you begin due diligence.
How to build a relationship with potential clients.
How to provide value to a firm instead of just money.
How Bobby partners with the business owners.
What to expect when doing due diligence.
The benefit of getting a Quality of Earnings (QOE.)
How to create a win-win situation along with an equity firm.
Why an owner needs to be involved in the company.
Rep Warranty Insurance reduces risk.
What do things like customer and supplier concentration tell an equity firm about your business?
How Bobby helps a business owner move in a strategic direction.
What Bobby and MCM look for in a business team.
The importance of a CFO for your business.
Hiring is a form of investment in a company.
How to keep a business owner involved in the company.
When can a business owner walk away from the business?
Bobby’s parting thoughts.
Today we’re taking a look at private equity from an insider’s perspective. Bobby Kingsbury (who you may remember from a previous show of mine) talks about how private equity works, in general, and how his company is doing business differently, in particular.
You’ll want to pay close attention to this show if you are even contempla