Business Value Growth

Starting with the End in Mind – webinar for business owners and buyers May 16 , 2024

Paul Cronin

True North Advisors Group, LLC

3 months ago

Starting with the End in Mind – webinar for business owners and buyers May 16 at 1PM (EDT) If you have the following questions, this webinar is for you! How do I strategically think about my end game? In other words, how do I figure out what game I am playing? What makes a business hard to sell and limited in market value? What are some major value enhancement strategies available to my business? What are reasonable timeline considerations in growing, preparing, and selling my business and what capacity needs are required to be added? How do I build a team of advisors? Speakers include: Amanda A. Russo: CEO of Cornerstone Paradigm Consulting Ryan Goral: CEO of Gspire Group Paul Cronin: three-time founder and M&A Advisor at True North Advisors Group For event details and registration, click

Apr 24, 2024

Greater Boston

Business Value Growth

Apr 24, 2024 1 min read Greater Boston

Business Value Growth

Many business owners are really accidental entrepreneurs – and struggle to sell their business

Paul Cronin

True North Advisors Group, LLC

3 months ago

The other day, a marketing expert asked me for “a hook” to explain what I do. I replied, “I sell smaller companies to larger companies, I am an M&A Advisor”. The truth is that I often say no to a lot of owners who ask me to sell their business, or hear no from a lot of buyers who take a look at my clients. So painful. You see, many business owners are really accidental entrepreneurs. If you are a business owner, maybe you got good at something working for someone else. Then you got ticked off at your boss, or the company goes out of business (because THAT owner failed to build business value), and someone hires you to do a job. That job turns into two, then 10, then 50, and so on. Before you know it, you have to hire employees (ugh), and you have a business. You work every day – Sundays too. 60, 80, 100 hours a week. Skip vacations. Miss your kids’ birthdays and soccer games. Whatever it takes. Why, because “no one else can do the job better than you”. 25 years go by and you feel an ache in your back, or your hip, or your head, and you say – “maybe I can sell this thing”. So you ask your CPA for some names of brokers or M&A advisors and make some calls. Then you get stabbed in the heart, when people like me tell you that your business is not really a business – it’s a job with employees, and late invoices. Hard to relive 25 years – isn’t it? If you want to change this outcome – there is hope, BUT it takes time and money to make your business sell-able. It starts by swallowing your pride and doing the work ON your business. You can turn things around over a few years, and come back to me with real profits, proven systems, and a key manager or two that you trust to run the business. That is when I say, “I can sell your business”. And the pain starts to go away. Maybe you even start to smile – again. It can happen, but it’s your choice: “Whatever it takes” or “Whatever happens” Which do you choose? ********************************* If you are a business owner who’d like to think more deeply about your business, try the

Apr 9, 2024

Greater Boston

Business Value Growth

Apr 9, 2024 2 min read Greater Boston

Business Value Growth

How do consulting agreements work when selling a business?

Paul Cronin

True North Advisors Group, LLC

8 months ago

I get this question a lot in M&A. The purchase price of a business can have a number elements: 1. down payment (cash equity from the buyer) 2. bank financing 3. seller’s note 4. installment sale 5. earn-out 6. commissions on future sales 7. consulting agreement for the seller, post-acquisition Earn-out’s, commissions and consulting agreements are often used to “bridge the value gap” between buyer and seller. In some cases, an earn-out is prohibited (SBA loans usually do so), or impractical. So, a consulting agreement can help. Let’s say you own a business and the buyer offer’s $1 million, but you think the business is worth $1.2 million based on growth potential with a new customer coming in. The buyer thinks there is downside risk that customers may leave, once you (the seller) leaves. One solution is where you and the buyer to agree to the $1.2 million purchase price contingent on the terms of the consulting agreement: $200k cash $800k bank loan $200k consulting agreement that might look like this: If the revenues stay at 100% to 90% of the current year (the base year), you earn $200k. If they fall 89% to 80%, you earn $150k, and follow a similar “ladder”. If the new contract yields at least a 10% increase in the base year, you (the seller) gain 20% of the profits from that new customer. This presents a win-win scenario for buyer and seller, and usually works with many lenders.

Nov 16, 2023

Greater Boston

Business Value Growth

Nov 16, 2023 1 min read Greater Boston

Business Value Transfer

Can you still sell your business when your sales take a dip?

Paul Cronin

True North Advisors Group, LLC

9 months ago

That is a question many businesses have faced over the years. Today, there are businesses that saw big increases in sales during the early days of the pandemic (2020 – 2021), but 2022 softened and 2023 seems kind of flat. This is especially true in many retail businesses “selling things”. Why? Because many consumers switched to buying services (travel, etc.), after redecorating their house, or buying power sports equipment, etc. Since leisure travel is almost back to 2019 levels, and inflation surged (at least for a while), there is only so much money to go around. As a business owner who wants to sell in such a scenario, you have to show financials from 2018 to 2022, and then estimate 2023 and 2024. If you can show that overall business growth from 2018 to now, then buyers may see this sales dip as part of the normal business cycle. That said, as a seller, you should be prepared for a price that reflects the business as it is, not what it was in 2020-2021. You also may see buyers put earn-outs into their offers, that are based on your forecast for 2024 and 2025. This give your the opportunity to get more money over the next year or two, versus what you may get at the closing table. So the answer to my question is “yes”, you can sell a business when sales take a dip, but you have to be flexible and show that there are growth opportunities for the buyer.

Oct 21, 2023

Greater Boston

Business Value Transfer

Oct 21, 2023 1 min read Greater Boston

Business Value Transfer

Buyer and Seller Goals eventually must align when selling a business – but it may not start out that way

Paul Cronin

True North Advisors Group, LLC

11 months ago

It seems intuitive: a deal requires compromise. Sellers and buyers each have their own goals (some more realistic than others) and should come together, but each often begins the process oblivious to the other’s needs. Suppose you’ve owned an auto service station for 30 years. You are tired of all the hassles and have made a lot of money over that time, plus you are in the typical “retirement age” of your 60’s. You also own the real estate and think you should keep it for “retirement income”. A reasonable goal on its own. After going to market with your friendly M&A advisor, you find the perfect buyer – “young blood”, an excellent mechanic who ran a competitor’s shop for 5 years. Perfect situation, right? Then the buyer looks at bank financing and sees that the cash flow of the business is enough to buy the business, but at current interest rates (11% in 2023), not at the price you want. He asks for some heavy seller financing and you balk. The buyer’s banker says ‘hey, if you buy the real estate, I can package it with the acquisition loan and stretch the term to 30 years” – which makes the cash flow sufficient to cover the loan and a lot closer to the price you want. ‘But what about my rental income?’ you ask. Reasonable question, but your goal of keeping the real estate is in conflict with your goal of avoiding heavy seller financing. Goal vs. goal, as it were. The buyer is thinking that you are greedy, not listening to his needs and begins to withdraw. But your business is near where he lives, bigger than his current job and will help him achieve his goal of financial independence. He is not listening to your goal of retirement income, but risks losing his big life goal. As the seller, if you sell the real estate you are giving up the future rental income, while gaining significant immediate capital from the sale. You are also reducing risk of the buyer not paying back all the seller financing (in truth, many deals require some seller financing). Of course, you will face higher capital gains taxes, the larger the transaction. The buyer’s CPA asks to speak with your CPA and they come up with some ideas that will mitigate your risk and still provide you with retirement income. (I’m saving some ideas on that for another post). Bottom line: talking to trusted advisors, can help you assess your goals/needs versus the buyers goals/needs to arrive at a win-win deal. Cue the champagne!

Aug 15, 2023

Greater Boston

Business Value Transfer

Aug 15, 2023 2 min read Greater Boston

Owner Life & Legacy

What will I do after selling my business?

Paul Cronin

True North Advisors Group, LLC

1 year ago

“What will I do after selling my business?” he asked. I hear that a lot both in my M&A practice, True North Advisors Group and my coaching business, The Platinum Years. “I fear I will fall into a void, if I sell”, is another common refrain. As we get into our 50’s, 60’s and 70’s, many of us who have achieved financial and business success, start to wonder about this. As my fellow business advisor Josh Patrick, wrote recently, we want to stay “relevant”. But what does that mean, and how to achieve it? For some it is selling and traveling, for others it is hiring a career coach and starting anew. Sadly, other freeze up and do nothing. Of course, that is a bit like letting choosing to let others plan your future – they will clean up your mess after you are gone. If you are a late-career business owner, there is a small step to think more deeply about your future. It is called the What’s Next Self-Assessment (online assessment, book and workbook). Beats wondering how to stay relevant… Learn More:

Oct 18, 2022

Greater Boston

Owner Life & Legacy

Oct 18, 2022 1 min read Greater Boston

Business Value Growth

From $1Million/month to $1Million/year – timing matters in selling your business

Paul Cronin

True North Advisors Group, LLC

1 year ago

If you had a business that was doing ok, then had a surge in business, how would that impact selling your business? It is hardly news to say that the Covid-19 pandemic had a profound impact on most business, and life in general. I was talking about this with some other investment bankers, one of whom shared this story. One client had some online sales technology that they were struggling to expand into the US market in 2018 – 2019. The owners hired the investment banker to sell the business. Then Covid-19 with the ensuing lockdowns hit and online sales exploded. This business had to ramp up wildly fast and it was soon rolling in orders and cash for the first time ever – to the tune of $1million/month, many times their previous volume. The owners of the business (who were not the day-today managers) saw this surge in cash flow as validation of their investment. The investment banker saw this as optimal timing to sell and got several offers for the business in early 2021. Sounds like a win-win right? Nope. The owners/sellers suddenly found excuses to turn down the offers. They were fooled by the online sales bonanza thinking that their business had finally found its footing and would keep growing. Nope. As late 2021 turned to 2022, the sales collapsed to less than $100k/month, projected to $1M/year – ouch. Clearly the owners had no idea how to fix the business. Their 2020 results were really dumb luck – rather like finding a four-leaf clover. In mid-year 2022, the investment banker did find another buyer offering a similar price to the 2021 offers, but with a 75% earn-out (where the seller will be paid a portion of the sale price many months later based on revenues that the buyer generates). The sellers grudgingly accepted it. The moral of story is that timing is often everything and that greed kills. When revenues and profits of a business are at a high point, that is often a great time to sell – but owner/sellers may not see this. When sales and profits decline, sellers have to accept the reality of a lower price for the business and/or heavy earn-outs. While some might say they should fix the underlying issues, in this case the owners were the problem. Selling really was their best option.

Oct 10, 2022

Greater Boston

Business Value Growth

Oct 10, 2022 2 min read Greater Boston

Owner Life & Legacy

What to say when owners ask: “What will I do after I sell my business?”

Paul Cronin

True North Advisors Group, LLC

2 years ago

Many business owners wonder, “What will I do after I sell my business?” While most envision travel, or golf, etc., many fail to understand that they will likely have to stay on board for months or even a couple years to transition the business to the new owners. This period can be hard for many owners, since they have to make a shift from an “ownership mentality” (top-down) to a “management mentality” (up and down). The new owners (particularly a larger corporation and/or private equity firm) will require management reports, milestones, and other protocols that many owners of small enterprises are unused to. For owners who recognize that selling the business is their best choice, this can cause a lot of angst. So what is the “trick” to managing such fear/anxiety? I tell owners to remember three things when they sell their business: 1. I just got paid a lot of money that will give me freedom and peace of mind, versus always worrying about my business and wealth. 2. My employees likely have been given more upward mobility in a larger business, and often better benefits. 3. This transition period is just that; in the context of a 40 year career (and 80+ year life), a year or so of managing/mentoring never killed anyone. Owners who embrace this new role will be given the chance to have better work results and more life satisfaction. It is a gift that owners make to themselves. If you know an owner who’d like to think more deeply about this, you can send them to the What’s Next? Self-Assessment (see link below), and give them this coupon code to save 50% : save50. They can also email me at paul@theplatinumyears.com

Jun 23, 2022

Greater Boston

Owner Life & Legacy

Jun 23, 2022 1 min read Greater Boston

Business Value Transfer

Learn The 3 Types of Transition Goals When Selling a Business

Paul Cronin

True North Advisors Group, LLC

2 years ago

I was speaking with an advisor to business owners recently about my client screening process for selling a business. I said that to deliver the best result, I ask business owners to write down three sets of goals. The reason is that many, if not, most owners only think of the business sale (the transaction) as the goal, when it really should be the catalyst to achieve their goals. If you are a business owner who has not spent time reflecting on your goals and writing them down, you may end up with a nice chunk of change in your bank (i.e “a bag of money”), but also a great sense of dissatisfaction or even anger. Why, you may ask? Because it is rare that the “bag of money” is the same size what you (the owner) envisioned when you started thinking about selling your business. If the only goal is the size of the bag of money, and you are destined to receive one smaller than you hoped, you will undoubtedly feel bad or even cheated at the closing table. About 10 years ago, a study of owners who had sold their business in the previous year revealed that 75% were dissatisfied with the result (that is not a typo). Three quarters were unhappy – wow! So what can you as a business owner do to avoid feeling like all those other business owners? Start thinking of three sets of goals like these and writing down yours: Personal Goals. One example might be making sure your key people are treated well during the transition from you to the buyer. Another could be that you feel listened to by your advisors and the buyers. Another might be that you get a fair consulting contract that allows you to take that three-week trip to travel the country (that you promised your spouse you would do when you sold the business). Business Goals. One example might be to see a new product launch that you have spent months and many dollars on prior to the sale. Another could be that the buyer maintain your location, since it serves as an anchor to other local businesses in the community. Financial Goals. Although it seems obvious that the bag of money should top-off (or maybe create) your retirement funds, you may have other needs and wants. One could be setting up 529 education accounts for your grandchildren. Another could be a large donation to your Alma Mater. One more might be to join or create an Angel Investing fund/group, so you can offer money and advice to start-ups (and keep your entrepreneurial juices flowing) There are likely dozens of other goals you can think of, when you put your mind to it. Better yet, ask your spouse/partner, or adult children for ideas (or their goals – you may be surprised what you learn). The key is to get started now, even if you are “years away” from selling your business. Why? Because it often takes years to get the business ready to sell, and yourself ready to leave. Waiting until the day of the closing will mean you end up like the 75% of unhappy owners who sell. If you’d like a great tool to help you think more deeply about selling your business, as well as your concerns that might arise, check out