Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

June 18, 2019

When is it the right time to sell a Business in New York?

By Achim Neumann

The middle-market business sector in New York is most definitely one of the largest in the entire country, and more than 10,000 businesses that earn between $10 million and $3 billion call the state home. This diverse group of businesses includes health care, finance, retail and more and comprises more than 1% of the firms based in New York but contributes nearly 20% of the revenue it earns.

The vast majority of middle-market businesses are privately owned, and these owners are frequently are left with the decision of whether they should sell their business or not. As of 2016, the value of mergers and acquisitions among middle-market businesses had declined to $297.3 billion from a peak of $324.3 billion in 2014. Despite the fewer cases of mergers and acquisitions, availability of buyers and funding for acquisitions has created a seller’s market.

In 2015, financial buyers raised $122 billion in addition to the $146 billion raised the previous year, and have since then been keen to generate returns for their investors. Strategic buyers – like large corporations – also have access to significant funds in their coffers. With the reduced chances of growth through M & A’s, many middle-market companies choose the path of acquisition as a way to grow.

Beyond the availability of funds, other reasons to sell a business include issues of estate planning, a need to try something different, inadequate succession planning by management, and pressures to gain liquidity.

There are also many factors in which a middle-market business owner might not wish to sell. As the US economy grows in strength, some might choose to let their business grow for a few years to sell at a much higher value. Also, not selling early gives the business owner the sole decision-making power to steer the business in the direction that he or she sees as the best fit. Rather than sell, owners may take on minority investors who can boost the company’s cash flow and value which will come in handy when the time to sell arises.

Should a business owner desire to sell their business, there are many factors to consider. Business buyers must consider more than the company’s cash flow and profits, and look at the total financial position of the company in terms of assets and past performance. Charting from the past to the future, businesses must show plans for growth and strategies to achieve that growth through organic methods, acquisitions or both. This is often a challenge for business owners who spend more time managing their businesses instead of staying on top of its financial reports, and they might do well to hire financial advisors to help fill that gap.

For owners, before deciding to sell the business, there are other factors to consider such as personal post-sale budgeting and cash-flow management. Collecting a big payment for the company also means losing the regular income the company once provided, and they will need to replace it to continue with their lifestyle. They will also have to consider the taxes applicable on the money they will be receiving. In addition, business sellers must consider the risk applicable to holding onto such payments and will need to decide how best to diversify their assets once payments have been received.

Regardless of the decline in M & A’s, there are still strong arguments for middle-market business owners in New York to sell. Financing is more accessible and buyers are equipped with funds. Sellers are also motivated to sell as the opportunities for liquidity and growth along with the challenges of succession planning compel them. Business owners must now decide if selling is in-line with their objectives, and if so, properly manage the sale and consequent transition.

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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Client Testimonials

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc 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 to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

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

“A Neumann & Associates is the only business broker I would use or consult with. They have assisted with 3 business sales over the past 15 years with me. They are honest and sincere and have always performed better than my expectations. They are the only one i would use for the sales of my businesses.”

James Belanger, Business Owner

“I wanted to take a second to commend the exemplary customer service from both you [Karin Neumann] and Mr. Valentino. It’s both a rarity in the industry, and very much appreciated.”

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
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Contact A Neumann & Associates, LLC

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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