The middle market segment, consisting of companies with annual revenues between $10 million and $1 billion, has emerged as a thriving area of opportunity and growth for business owners and sellers.
Selling a business is not like selling a product. The M&A process takes months, and sometimes years, requiring the dedicated attention of M&A advisors or a business broker, as well as a team of legal and accounting experts.
How much does it cost to sell a business? That depends on what resources you need. Research consistently finds that M&A firms lend considerable value to a deal, ultimately fetching higher sale prices and more favorable terms. Yet many sellers remain reluctant to hire an investment banking firm because of concerns about the cost of doing so. The result is a lot of DIY sales that never get off the ground, or that don’t realize their full potential value.
Family is complicated. It can be a source of joy and support but also immense drama and conflict. And while family businesses offer many benefits—a deep commitment to the company's success and often a more personal touch—they also bring many of the same challenging dynamics of family life to the business. So, when families can't agree on how to manage their family business or when to sell it, there's more at stake than just money. As a result, relationships can fracture, and the discord can sow discontent and dysfunction at the office, ultimately undermining the business.
When buyers and sellers can’t agree about the final sale price, your M&A firm may recommend a compromise: an earnout. Earnouts delay some portion of the final sale price contingent on ongoing performance by the business, usually by requiring that the seller/owner meet certain performance benchmarks. If you’re considering selling your Dallas business, know that an earnout is a powerful tool to bring to the negotiating table. But it also poses significant risk, and is not appropriate for all deals.
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