With Boomers aging, millions of Middle Market companies will change hands in the next decade. These 10 key trigger rationales will help you to know when to go to market.

Recent articles in the business press have projected that as many as 12million North American companies are set to change hands from Boomers to GenXers and Millennials in the next decade – at a staggering asset value of over $10Trillion!

In our experience, the core concept behind making a successful exit for most business owners is one of converting the years of hard work, risk and personal sacrifice into hard cash and liquidity. Getting there requires careful thought and detailed planning to ensure that the optimal results are achieved.

Based on that experience, the following 10 triggers have proved to be the most prominent reasons why the time might be right to SELL all or part of the equity in your business.
  1. ‘UNICORN’ OFFER –
    a strategic buyer offers a “once in a lifetime” financial opportunity to cash out. Your business offers the right strategic fit for a motivated buyer and he offers a better than fair price to close the deal.

  2. GROWTH MARKET –
    market multiples are high and rapid growth opportunities are projected with the right Partner. Your business model and sector focus are attracting a number of well qualified buyers, who can invest in you and the company – providing short-term liquidity and helping enhance your longer-term opportunity.

  3. PRE-PLANNED EXIT –
    business is established. Owner is young enough and has worked through a structured “value building” process to help ensure Exit Readiness and an optimized earn-out over time. You’ve done your homework and prepared well for this move. Now you can focus on making the most of it.

  4. INVESTMENT HORIZON –
    business is growing, but cash flow / profitability is hard to manage given the projected need to invest in infrastructure, hire quality staff and build technology resources. You have taken a realistic view of the situation, both now and in the near-term. You need to find a strong financial partner to help you move on to the next stage of growth and profitability.

  5. PERFECT TIMING –
    the succession planning process has worked well, and your ambitious management team are fully primed and ready to take hold of the reins. You’ve chosen well and mentored them effectively. They are ready to rock, and you can make a gradual withdrawal from the day to day as they buy you out over time.

  6. NEW OPPORTUNITY –
    owner needs to cash-out, in whole or in part, in order to take advantage of a unique third-party investment opportunity. You know this new direction is the right one for your future and that you need to leave today behind.

  7. MARKET DECLINE –
    business is flat or shrinking and sector competition is intensifying daily. It’s time to take what value there is in the business before it’s gone. You’ve taken a long hard look and realize that it’s time to get out with what you can. Focus on the strengths you can offer to a new buyer, target the right buyers and close the deal.

  8. BOREDOM –
    owner’s interest is waning gradually and the passion for the business is gone. Retirement or fresher fields are calling. You don’t get excited anymore about the day at work. It’s time to find the right advisor, make the necessary moves and optimize your sale opportunity.

  9. ILL HEALTH –
    owner’s health is failing, and the energy needed to sustain and lead the charge aren’t there anymore. Retirement and a place in the sun are on the horizon. The situation is urgent, and you need to deal with it. Get on board with the right advisor and sell the business.

  10. LIFESTYLE CHOICE –
    for various reasons relating to family, finances, preferred location or other personal reasons, the owner is committed to getting out of the rat race. You’ve made the decision to move on. Seek out the right advisor and work together to make things happen as fast as possible.

If any, or several of these triggers, apply to your current situation the next critical move should be to find a Professional Advisor - always remember the age-old adage – “You don’t know what you don’t know”, so don’t go it alone. The key is to reach an agreement together with your Advisor as to the realistic MARKET VALUE of the business. Then decide on the ideal BUYER PROFILE. FYI according to Deloitte’s 2019 M&A Trends report, business expansion via broader geographic coverage (20%) and the addition of new services or products (19%) are this year’s key deal drivers.


Deloitte also reported that mission critical ingredients for sustaining M&A success were:
  • Relevant Target Identification – 14%
  • Fair and Accurate Valuations – 18%
  • Planned and effective ‘post-deal’ Integration Processes – 23%

No surprises there!! Should be obvious that establishing “FIT” and ensuring a positive, blended operational working environment will best deliver incremental WIN-WIN results.

Talking of WIN-WIN also opens up the prospect of MERGERS with similar, but incrementally complimentary competitors. Often this means 2 companies coming together to find synergies in client and service base, administration, marketing and most importantly Partners. Running a small business can be a lonely existence, but true partnership with like-minded entrepreneurs provides other people to discuss key business issues with and bring their support to bear during tough times. Done right, a sound strategic merger should deliver major industry news and enhanced business momentum, turning 1 + 1 into 3.

Whatever you decide to do, always follow your head and not your heart. If you decide the time is right for you to sell, raise investment funds, or are ready to acquire, don’t waste time, make the right moves and make things happen, before you start second guessing yourself and opportunity is lost.


Kevin Astle is the Founder and Managing Partner of MultiVisory International. Having worked on both sides of the Atlantic and on both sides of the Client/Agency desk across North America, he brings an international perspective and deep, multi-sector knowledge and network to his Clients.