Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

April 11, 2016

Close The Company – Not The Best Retirement Solution

By Joseph Eneldas

Maryland_State_House_from_College_Ave

“Recently, I had the opportunity to work with a small business owner who was worried if his business was worth selling”, says Glen Michalske, Managing Director, North Carolina, A Neumann & Associates LLC, a New Jersey based Mergers & Acquisitions and Business Brokerage firm. “He was thinking of just letting the years of hard work building his business fade quietly away.”

Interestingly, our firm frequently comes across this scenario.  A business owner’s concern is always that no one would want to buy their business as it’s in a niche market, revenue has been shrinking over the years, the cost of selling the business would exceed its worth or required effort, etc.

The owner’s reason for shedding a business, even to the point of shuttering it, is often that he could focus entirely on a new business venture.  Often, the owner admits his neglect was the cause of the business’ decline and there is an easy fix, even while thinking about putting most of his energy into a new business venture.

As Michalske states, “this business here was unique, profitable since inception and has a long history of serving the marketplace.  It had a dedicated customer base and supported a few employees.  A quick analysis indicated that costs were in line, inventory was down and a little TLC would change the direction of the business without much effort on the owner’s part.”

Our business brokerage firm experiences this scenario quite often. The owner did not know what his business was worth and was unsure if it was worth the effort to try and sell it. Working with a qualified M&A advisor or business broker will provide an appropriate business valuation, and more importantly, will project future income in the business’ market place and a macro economic environment analysis.

“We recently experienced a long-term business owner in the book publishing field, who would rather liquidate the declining business by selling off inventory and then closing the business, instead of accepting a perfectly good offer providing $500,000 in Good Will payments above the asset value”, says Achim Neumann, President of the firm. “Needless to say, such a scenario completely destroys any legacy, omits a $500,000 gain, and will lead to a lot of headaches for the business owner, in terms of collections, inventory management and employee handling.”

The great majority of businesses does indeed represent a value, and for the nominal expense of obtaining an independent, accredited business valuation, the owner can easily ascertain this value.  Furthermore, upon receipt of the valuation report, the owner can consult with his CPA to determine the net receipts for a sale transaction.

After a completed business valuation, reputable business brokers can quote a success fee for an engagement to sell the company, whereas such fee is commonly paid upon closing. As Michalske states, “the bottom line is, the owner’s costs of selling the business are far offset by the current and future value of the business, only paid upon a successful closing and the only initial investment is a nominal 3rd party valuation fee – not to mention, that the business valuations can often be used to obtain debt financing if the business owner decides to re-build his business.”

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or info@neumannassociates.com

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Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs

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James Belanger, Business Owner

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Andrew G., Investor

“We worked with Neumann & Associates to investigate the purchase of a research company in 2010 and found Achim to be capable, forthright and realistic. His depth of experience enabled us to fully understand our options, offering creative options that might enable the acquisition. While we didn’t acquire that particular company at that time, we know exactly who to call whenever we’re looking to buy or sell a business.”

Daniel Coates, Buyer

“Purchasing a business through this firm was a pleasure. Gary was very professional and transparent throughout the entire process. I look forward to working with A Neumann & Associates in the future.”

William Klemens, Buyer

“I utilized A. Neumann & Associates to assist in an M&A process. They are VERY thorough in using their time-tested process to calculate the value of investment opportunities, a process which provided a very detailed explanation for the value of the potential opportunity. Additionally, they also went above and beyond to extend other services including connecting with others who specialize in your industry and can assist with necessary steps including legal and accounting. Highly recommended!”

Edward Lane , Business Owner

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Achim, who explained the process in detail. He had his colleague Gary come to my office in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using when the time comes for me to sell my business for max value. They gave me great insight into the steps I need to take now to get the best deal in the future. I highly recommend this firm to anybody who wants to sell now or down the road. They not only know their stuff, their actually just real nice guys.”

Robert Kardane, Business Owner
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If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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