When it comes to selling your business, it’s easy to make mistakes. If the thought of selling makes you want to keep working until you die, take a deep breath and keep reading. There are a lot of people who have walked this path before you and lived to tell about it. Here are a few insightful articles that will help you learn what to avoid, what to look for and how to move forward with confidence.
In this post from the New York Times blog, author Josh Patrick takes a close look at the details that caused a real business sale to go painfully wrong. This postmortem uncovers common mistakes business owners make when faced with a transition and provides insights to keep your own sale from going down the same road.
Selecting your broker is an extremely important step toward selling your business. Each business owner is unique, so it should come as no surprise that, when it comes to brokers, one size does not fit all. This article examines what to look for as well as important things to keep in mind during your search.
Making decisions about the sale of your business aren’t always black and white. This article outlines some of the trade-offs you are likely to face during the process of transitioning as well as practical advice to keep things on track.
Planning ahead is vital. Whether you’re preparing your company for sale now or don’t plan on transitioning for years, it’s never too early to start thinking about how you want to retire and what it will take to make it a reality. This post offers practical insight tailored to the business owner.
On the theme of retirement, the last post in our list focuses on a step-by-step approach to retirement that starts with the end in mind. Working backwards from your goal for retirement will empower you to set the right wheels in motion now.
At first glance, this is a story about a group of investors buying a small company. Happens all the time.
Take a closer look, and you see Lyle and Shelley Von Essen, longtime owners of a small but profitable business in Yakima producing labeling, lot-code traceability and other services for the fruit and produce industry in the Pacific Northwest and beyond. They and their company, Graphic Label, have been part of Yakima for decades, and the Von Essens themselves are active in their church and community.
But as the years passed, their conversations about next steps and turning the business over to someone else took on more urgency. Doing the right thing – for the business, their employees, vendors, customers, Yakima and their family – proved to be much more difficult than they expected.
It turns out the Von Essens’ story is just one of thousands in the Pacific Northwest and millions across the country. Baby-boomer business owners who simply want to cash out have plenty of options. But owners like the Von Essens, who seek a sense of legacy and a passing of the torch to someone who will care for the people involved, often struggle to find a way forward.
These owners won’t sell to just anyone, but the problem is there aren’t enough of the right kind of buyers. Institutional capital – the normal recourse for private companies – isn’t prepared to serve people like the Von Essens. Their companies are too small and require more time to embrace elements that are often much more important to business owners than just the transaction price. And for owners who have poured their lives into their companies, these are, understandably, extremely difficult decisions. For institutional capital, it’s just not worth it to help.
There’s more at stake than just the company itself. Companies like Graphic Label are found in places outside the high-growth, high-tech belts along both U.S. coasts and in the big cities. They’re in the traditional manufacturing sectors in the heartland and smaller cities and towns—places like Yakima, where the fate of even a small company like Graphic Label can have outsized impact for good or ill.
Who can help? Enter Scott Smith, Jeff Rogers and Darin Leonard – three business veterans who, after 30 years each of operating and consulting to private companies, decided they wanted to do more than just offer advice.
So they started OneAccord Capital with $25 million in funding from 14 like-minded investors.
Graphic Label is their first acquisition. And it wasn’t like they were welcomed as saviors, nor was this anything close to a salvage. The Von Essens had achieved consistent profitability since starting the company in 1993, and they had expanded into new offerings through building trust with customers.
OneAccord Capital had to pass muster with the Von Essens. They had already rejected other suitors based on a meticulous vetting process for values, operational experience, and long-term vision for growing the business. The Von Essens were looking for a buyer who saw what they saw and believed what they believed.
“We win only when we help our customers win. On our best days, we’ve been able to act from that insight and deliver real value and earn the trust of our customers. That’s always led to new opportunities and new growth.”
—Lyle Von Essen
OneAccord Capital’s acquisition of Graphic Label marks a radical departure from the traditional norms of the private equity industry, which generally drives for quick-turnaround results. To the contrary:
“My hope is…that it is not only about the ownership relationship. I think it’s a developing friendship. I want to work with people I consider friends – rather than, just, we’re in business together as investors.”
—Jeff Rogers, Chairman, OneAccord Capital
What’s driving Scott, Jeff and Darin, and why do they think their approach will make a difference? They believe in the power of genuine stewardship, encompassing real return to shareholders and real responsibility to the business, and they apply their own deep operational experience and long-term thinking to spur growth for the companies they buy and manage.
“You’ve got three guys who’ve had eight jobs over 90 years of professional experience. Our whole background is about the long view, loyalty and perseverance,” added Jeff.
“When we set up OneAccord Capital, we set it up to be a long-term, hold and grow investment source. No quick fixes, no buy-and-flip. We hold and build great companies over several years. That’s the commitment.”
A particular strength for OneAccord Capital is its investors – successful entrepreneurs from Puget Sound who are all on the same page in terms of outlook, approach, values and vision. They want to have impact, and providing money is only a part of it. Their deeper interest is to share what they’ve learned after years of growing and operating businesses successfully.
“The depth of their financial commitment is important, but it’s probably not the key thing,” said Lyle. “The key to it, I believe, among both the investors and the people at OneAccord, there’s this vast knowledge of business.”
“We see the Monday after the Friday, the Day One after the close, both for the business owners and the business itself. We have the perspective and know-how to navigate the complexity required for a successful transition, and to get the business to the next level.”
—Darin Leonard, co-founder of OneAccord Capital
Scott agrees: “Our investors have so much more to offer than just a check. They have business experience, connections, skills and insights. They want to help make a difference. Like the Von Essens, OneAccord Capital investors recognize they also have a torch to pass.”
The hard work lies ahead. It’s Max Clough, the Von Essens, the OneAccord Capital team, and Graphic Label employees digging in to chart a course for growth. It’s finding the next right fit for OneAccord Capital investment, the next Lyle and Shelley among the many local private-company owners looking to keep their legacies alive. And hopefully, it’s inspiring others with the same ability, resources and values to join the effort.
It’s hard to find a buyer who is as concerned with preserving a former owner’s legacy as they are with the financials of the business they’re buying. This kind of respect for the employees, vendors, clients, etc. is good business. A buyer who seeks to preserve and nurture these relationships understands that, and yet such a buyer is incredibly difficult to find.
Members of the leadership team at OneAccord Capital have a great deal of experience with business transitions. We’ve seen buyers who purchase a business only to change the name, push out the employees and alter the systems for doing business—all before they even know and understand the business. This makes no sense. When you buy a business you’re buying its name, history, reputation, clientele, vendors and employees. What’s the point of spending millions to acquire these if you’re just going to throw them to the wayside? And yet this is overwhelmingly common.
Preserving a business, adding instead of subtracting, seems like common sense. But the legion of owners who go straight to subtracting are likely driven by a number of convictions which seem perfectly logical when taken at face value.
Running a business is extremely specific to that particular business, but many successful business owners are convinced they’ve mastered the art of running a business—any kind of business. It follows that they can buy another company, turn it into a carbon copy of their last success and watch the proceeds come rushing in. These buyers don’t realize—or won’t admit—they don’t understand the company they just bought and need time and help to learn it. So instead of taking the time to do just that, they’ll simply run it like they ran their last business. This often means complete upheaval of what’s already in place because the new owner isn’t familiar with the structure of the organization or the people in it, let alone the industry.
Buyers are often finance people who look at the employee roster and decide they just don’t need the all these people on staff. Maybe they have their own people in mind. If the new business has, for example, a strong sales team but the buyer has his or her own sales people, axing the established team looks like a money-saving move. The same goes for staffing across the company. Anybody with the same job title as someone else the new owner already has in the wings—maybe at another company or their corporate headquarters—represents redundancy. “Why should I keep these payroll people on board when I already have an army of accountants at my other business?” Layoffs promise savings. This logic often proves to be a new owner’s Achilles heel. If the business they bought was a successful, well-run business, laying off the team responsible for this success inevitably pulls the company down. Profits tank, people are out looking for a new job and nobody wins.
Buying an established business is also easier to finance than a brand new baby business. It’s more expensive, but banks consider an existing organization with a performance history less of a risk than a new business. This leads banks and other investors to be more eager to finance the purchase of a business. So your new owner may have had a vision for a brand new business, but for financial reasons decided to buy an established one, intending from the start to tear it down and make it into the business they couldn’t build from scratch.
Whatever the motivation, the vast majority of buyers are keen on overhauling the business, no matter the cost. This creates, at best, large turnover, because as the new owner ramps up growth and earnings with their eye on selling in a couple years, the overhaul creates a terrible work environment where employees bear the brunt of the immense pressure to grow. Big firms can handle this, but big firms aren’t buying small businesses. They’re buying large companies that run well enough that they can buy, push hard and exit within the 2 to 5-year time frame.
It’s important that we clearly draw a boundary between overhaul and change. Change can be a very good thing. A new owner comes to the table with a fresh perspective, new energy and ideas to improve the business. There may be things in a successful business that just aren’t working and need to change. There could be new technologies or philosophies the old owner wasn’t interested in investigating. This is where change can be very good for the organization—provided the new owner takes the time to learn the business.
This all brings us back to the question of how to find a legacy buyer who will approach the business with a bit of humility, patience, a teachable mindset and a resolve to build relationships. Legacy does not play into the plan for the majority of equity firms seeking businesses to buy, flip and sell. An online search isn’t going to bring up a bunch of buyers concerned with legacy. In fact, the odds of finding a legacy buyer on your own are slim to none. You need an insider who knows who the players are—this could be your broker, if they are deep enough in the market to know which potential buyers are going to preserve and build your business without tearing it down first.
Your best bet is going to be talking with a broker or firm which values legacy. If you or someone you know is looking to sell a business and wants this kind of buyer, call OneAccord Capital. Not only are we interested in preserving the legacy of small to medium-sized businesses, we can refer you to individual buyers and firms who share this value.
Baby boomers’ heightened awareness of legacy combined with a penchant for owning businesses is leading to the extraordinary circumstance of 10 million owners searching for the same thing: a buyer who not only has the cash, experience and interest in buying a business, but a concern for the legacy they will inherit with it.
OneAccord Capital was founded to help fill in the gap between the huge number of businesses starting to hang up For Sale signs and the relatively few buyers. OAC can’t put up the entire $10 trillion set to change hands over the next decade, so the question on the table is:
First, let’s spell out what we mean by legacy. The most basic move a buyer can make to preserve legacy is retaining the name and location of the business. If you buy Jimmy’s Hardware in Kent, WA, renaming it Kendra’s Hardware and moving it to Bellevue wipes out the memory of Jimmy and his hardware store. While it might technically be the same business, practically it’s a new creation and Jimmy’s legacy is gone. After OneAccord Capital bought Graphic Label Inc., they turned it into an LLC but kept the name. The logo still reads GLi, the name is still Graphic Label Inc. and its headquarters are still humming along in Yakima. Legacy means continuing to build, without tearing down.
Caring about the previous owners may sound like a nice thing to do, but legacy is also good for business. Keeping Jimmy’s name on the sign, keeping the employees on who have worked at GLi for years—these actions retain the value of the name of the business and the experience of the employees who know how to run it. Searching for new employees takes time and money; keeping on the employees of a well-run business does not.
Business is about relationships. Good relationships equal good business, so keeping on employees, customers, vendors and continuing the business’ role in its community is just plain smart. The established knowledge and relationships keep the business running and allow for a clear path to growth. They also give the new owners time to learn the business from top to bottom so they’re better equipped to create growth. Demolishing the company and rebuilding doesn’t make sense when you’re trying to turn a profit.
So if you’re a business owner worried about your legacy after you sell, know that there are compelling reasons for a buyer to preserve and expand your legacy. It is possible to find the right buyer, but it will take forethought and work.
First, it’s important to remember buyers are looking for a good investment. A well-run business with a strong foundation, consistent earnings and a clear path to growth is a great investment. Take the time to prepare your business for a sale and when you find a legacy-focused buyer they won’t be scared off by crippling issues in your business.
Second, keep in mind you’re not the primary person searching for a buyer. Your broker will market your business and vet potential buyers. From the start, let them know you’re not interested in auctioning off your company to just anybody with the cash. Be specific about what you’re looking for so your broker can help you find the right match.
Even if you’re not planning to retire in the next five years, you need a transition plan. Betting that you’ll make it to retirement age is optimistic, but devastating when you’re wrong. Businesses need to transition for all sorts of unplanned reasons—health issues, family issues, financial crises and, worst of all, death. In the event that a business owner dies, planning ahead can keep the complexity of dealing with the transition from landing on the shoulders of their family during a time of grief.
Your obligations don’t disappear when you die, they just get passed on to your family. Without proper planning, your heirs will take on the burden of cleaning up the disaster of an unplanned business transition. Since they don’t know the ins and outs of the business, it will be far more difficult for them than it would have been for you.
Planning ahead is the best thing you can possibly do when it comes to your business. Even if you own the business for decades to come, your plans will only serve to strengthen and grow the organization, safeguard you from unexpected turns of events and make your business more attractive to buyers when you choose to sell. Selling will be always be complex, but with proper planning it will be less so.
No matter where you’re at or the state of your business, you can start now. Keep in mind that no business is perfect—what you need to focus on is a strong foundation.
When OneAccord Capital acquired Graphic Label, Inc., it was drawn to the business’ solid core. GLi had a consistent history of earnings and a highly diversified customer base. OAC could also see the growth path clearly—everything GLi has been doing within Washington could be expanded to other states. No company is perfect, but a stable business with good people and a strong foundation is a good investment. Focus on these in your own business and you’ll be in a much better position for whatever may come.
Without proper planning, it is still possible to avoid a shutdown when the time comes to sell. We discussed what a shutdown involves as well as the as is sale in this post. It is possible to sell your customers to your competitor, auction off your equipment and bring in as much as you can to put toward payables, bank notes and the rent you’ll continue paying until your lease is up. Even with a very small business you’re still looking at $100,000 to shut down in an orderly fashion that will keep you out of court.
This is better than shutting down, but it’s still a grim picture in light of the fact that, with planning, you can grow, strengthen and sell your business for a profit that will set you up well for retirement.
When the time comes to retire and your business isn’t ready to sell, there are a few options for you as the owner. The best of these options is to work on your organization with trustworthy advisers and sell when it’s ready. This will take time, but allows for the best price, smoothest transition and greatest peace of mind as you ease into retirement.
If you’re long past retirement age and just want to be done, it can be hard to put in the time to prepare for a sale, but consider the alternatives.
You could seek out a competitor and offer to sell them your business for a song. With the right price, you can likely find such a buyer. While this option means losing out on the potential value of your business, it is often a better solution than shutting down.
A shutdown is your absolute last resort. Locking the doors and backing away is possible, but it’s going to be the most time-consuming, stressful and expensive of all your options. After you cover the expenses, you may have nothing left as you start retirement. This is especially bleak when you consider the fact that it doesn’t have to end this way.
Consider what goes into shuttering a business. It can sound simple. Pay the bills, fulfill the contracts, pay the employees and leave. In reality, there’s more to it and even if you’re shutting down a very small business, it’s expensive.
Consider a simple example: A business owner wants to shut down his $3 million manufacturing company. He only has a dozen clients. To shut his doors, he’ll need to fulfill his contracts which means he’ll need at least some employees to keep working until these obligations are complete. Ideally, he’ll want to time his contracts, purchase orders and lease to all end at the same time, before laying off his employees, but this kind of congruent timing isn’t going to just happen without a great deal of advanced planning.
The simplest way for our imaginary business owner to shut down would be to lock the door, put up an “Out of Business” sign and inform his customers they’re out of luck and need to find someone else. Ideally this would be timed to coincide with the end of the lease (again, only with planning). Not only is this the worst way to shut down a business, it’s simply not realistic.
Even the crudest, simplest shutdown requires advanced planning to avoid legal entanglements. How you handle your contracts, customers and employees will have legal ramifications. You’ll still need to sell off equipment, empty your warehouse and clean up the property so your landlord can rent it out immediately—otherwise you could be stuck with a bill for accrued rent the landlord isn’t getting while preparing the place for another tenant. Any proceeds from selling equipment may or may not cover the costs you’ll face, which may include your lawyer, tax expert or other adviser (highly recommended to keep you out of legal trouble), auctioneer, document preparation and filing, final payment of employees (potentially including unused leave) and financial obligations ranging from tax filings specific to shutting down, business debts and maintenance of records for the required length of time after your shutdown.
If you’re going to put the effort into shutting down, you might as well prepare for a sale. If that’s an overwhelming idea, keep in mind there’s more than one way to sell a business.
Let’s say your organization isn’t ready to sell, but you’re convinced shutting down is the worst option. Finding a broker to help sell your business ‘as is’ will be difficult since brokers need to justify the time they spend on a business. This is usually in the form of their commission, which isn’t going to be big enough with a small business selling as is. Even a consultant is going to be difficult to recruit in this case, but selling is still possible—and better than shutting down.
Without a broker, you can still contact a competitor to see if they want to buy. If they do, you’ll need an attorney to handle the contract and help you with the legal processes involved with laying off employees. It’s also smart to engage your accountant to keep the transition orderly. You can do it without one, but it’s going to be a mess and increases your chances of facing legal battles. Again, you have legal obligations which will not go away until you fulfill them.
This sort of sale isn’t the worst thing, but it’s not the best in light of what could have been. Your business is likely the biggest asset you own, and with the expense and effort it takes to fulfill your obligations to sell as is or shut down you might as well work with advisers who will help you prepare for a transition more likely to benefit you.
Even if you just want to be done with the whole thing, there are better ways to go about your exit that can keep you out of legal trouble, bring in some income for retirement and allow your business to continue serving your customers, vendors and employees. Talk with a trusted adviser and take a long, hard look at your options before you decide. You could be pleasantly surprised.
In August OneAccord Capital announced its acquisition of Graphic Label, Inc., a small business based in Yakima, WA focused on providing solutions for the fruit and produce industry. Since that time OAC has been hard at work to fulfill the promise of preserving legacy while seeking to expand and grow the business.
OneAccord Capital is reaching the end of its strategic planning work, which is creating the path to growth for GLi. In addition to updating the company’s website and logo, the past few months have found the new owners visiting GLi’s customers in person to discuss the transition face to face. Reactions from these customers have been a mixture of positive and reserved—some want to wait and see if OAC will deliver on their promises before celebrating the new era of GLi, a highly customer-oriented business. These in-person meetings have many advantages, not the least of which is the ability to get feedback on the current state of service. This has allowed OAC to proactively implement immediate changes to anything that wasn’t delighting customers.
OneAccord Capital has also spent a great deal of time with one of the business’ major suppliers, Markem-Imaje, moving their relationship forward to a strategic level that will open doors to servicing the entire west coast, expanding GLi’s current reach.
So far there have been few changes to the actual business—OAC isn’t interested in changing the business. The goal is to complete strategic planning, implement the plan and focus on growth.
One of OAC’s core values is preserving the legacy of baby boomers who have built solid businesses and want to do right by their employees, vendors, clients and community. What this means in practice includes keeping the company’s name as well as its original employees. OAC hasn’t laid off a single person from the business, as promised, and has hired one new employee so far—a salesman to help spur growth.
Preserving legacy also means keeping the previous owners’ commitments to the local community. Last week, GLi announced a new $5,000 scholarship to Yakima’s Perry Technical Institute for students pursuing technical training.
“Graphic Label plans to hire new people right here in Yakima as we grow our business throughout the Pacific Northwest and beyond,” said GLi’s chief executive officer, Max Clough. “We’ve had great success hiring Perry Tech graduates, and we know that great educational institutions are key to the health of any community. We’re proud to be able to offer our support.”
The story of GLi is a case study for how OneAccord Capital’s values play out in the real world. With so many baby boomers looking toward retirement, the need for buyers who will understand their values and preserve their legacy is growing. OneAccord Capital will continue acquiring businesses with the intention of growing those businesses without sacrificing legacy. If you or someone you know is interested in learning more, contact OneAccord Capital at firstname.lastname@example.org.
By their very nature, entrepreneurs are drivers, innovators and visionaries. Successful entrepreneurs learn to be flexible and focused on the big picture. When the time comes to transition your business, these same qualities will work in your favor.
First, you need specific goals and plans to reach them. Do you want to sell your business now? Is it ready? Do you want to sell when you hit a certain age? How much time does that give you to prepare to sell and how will you be prepared within that time? How do you want retirement to look and why? It’s easy to dream of spending every day swinging in the hammock, reading, but once you actually try it you might find you want something a little more rigorous. Try it out, then decide.
The main idea with goals and plans is to be definitive. “I’ll sell someday” isn’t a plan. “If I get _____, I’ll sell the business” isn’t definitive and won’t set the wheels in motion to prepare you for the day you actually fill in that blank—or the day you realize you’re not going to.
Luck is not a reliable ally. Good things happen when opportunity meets preparedness. If an unexpected offer comes in, you’ll only be in a place to take it if you’ve already worked on your business in light of your exit strategy. The same goes for the bad news. When financial crisis or a health scare strikes, you’ll be in the position to sell your business if you’ve worked on in in light of your exit strategy.
There’s a lot of mental and emotional planning that goes into preparing for a transition, in addition to the financial planning and due diligence that comes with a sale.
Knowing yourself and where you stand, both personally and in relation to your role in your business, are key drivers to determining your readiness to exit your business.
Where are you, mentally? Do you have your exit planned and have a clear vision of the future of your company? Or is your business entirely dependent on you/are you entirely dependent on your business? Are you working in your business or does your business work for you?
Exit planning is highly involved. It’s a complex process with many different layers and requires the same skills you put into making the business run successfully. Imagine if you had said, “We’ll grow someday” instead of “Here’s how we’re going to create growth.” It’s the same for transitioning your business. “If” and “I hope” are not the same as “If this happens, then I will” and “I will do this to cause this outcome.
If you’re a baby boomer business owner with a small to medium size business in a blue collar industry, you have an even greater than usual challenge ahead of you as you plan to sell. Your fellow boomers are also preparing to sell and not everyone is going to find a buyer. The owners who plan ahead and make their business too attractive to be ignored will be the ones who sell. A good investment is a good investment, so make your business a good investment.
According to OneAccord Partners, “only 1 to 4 percent of the estimated 25,000 small businesses (under $5 million) for sale in the US are sold.” Many business owners are so focused on running and growing their business, it’s easy to forget about when they will inevitably exit their business.
If you haven’t considered your exit strategy, know that planning ahead is the one surefire way to be ready and in a position to start retirement the way you want to.
Baby Boomers are the most entrepreneurial generation in American history with more than 10% of the boomer population owning their own companies. This represents more than 4 million business owners employing nearly 50% of our country’s workers. The first “boomerpreneurs,” as they are known, started turning 65 in 2011, and these individuals are starting the process of retiring or transitioning their businesses at a rate of 1,000 per day.
Baby BoomersBy 2020, the youngest boomerpreneurs will turn 55 and this transition rate will likely increase. But will they be able to find buyers among a younger generation who may or may not be interested in “standard” or “old-line” businesses?
Statistical trends, unfortunately, point to the likelihood that only 20% of the boomers will end up selling their companies or have a true M&A event.
There are many reasons for this, and we have covered a few together in past articles. But I think two of the most powerful lessons we can learn from this dilemma facing many boomerpreneurs can be found in a pair of economic principles a graduate school economics professor at Babson College drilled into my head:
Okay, so what’s new about that? That’s economic theory; what does it mean for me? My top customer is ringing the other line!
If you are like some and have invested wisely and been fortunate in your planning and fiscal management—or maybe you’ve just been lucky—you don’t have to worry about selling your business to help fund your retirement or cement your family’s legacy.
However, for those who do have to transition, exit or sell their companies to partially fund their retirement or maintain their existing lifestyle after they retire, the scenario is not as pretty and the two principles listed above will have a direct impact on your ability to sell your business in the future. More on those in a moment.
Many are wrestling with the issue of their company being simultaneously the largest item on their personal balance sheet while at the same time the most illliquid of investments. See my earlier article about how 30% of companies in the lower middle market go straight to liquidation due to lack of a succession plan and only 2 in 10 achieve a true M&A event.
Many businesses are worth less than they were at the peak (2007), and many owners have put off the sale of their firms with hopes of recapturing that lost value. Meanwhile, boomerpreneurs have also swallowed the 2012 U.S. Presidential election results and the recent capital gains news, and are now increasingly deciding—or recommitting—to selling or transitioning their businesses out of fear.
However, it’s not all doom and gloom! According to author, middle market expert and fellow member of the Alliance of Mergers & Acquisitions Advisors, Rob Slee, the window of opportunity to sell based on previous investment and capital cycles is rapidly closing and the time is now.
Here’s where that first economic principle comes in. With a glut of boomerpreneurs retiring, pent up demand to sell and the law of supply and demand in action, the ability to get the price you want will be very difficult if you’re ill-prepared.
As we know, private equity has culled many of the top performers already from the market. As a matter of fact, private equity owns or has controlling interest in approximately 38,000 middle-market companies (12%), which represent 30%-40% of today’s entire market equity in middle market firms.
So under the axiom of all costs drive toward zero (there’s that second principle), unless your business is a stand-out performer, with many businesses coming on the market prices will drive toward zero (or practically speaking will sell for lower multiples).