31 Mar Atlanta Business Chronicle Looks to Bravaldo Capital for Insight on Planning for M&A
Below is an excerpt from a March 30, 2016 Atlanta Business Chronicle article entitled “Merge Ahead: Planning and Preparation are Crucial when Businesses Merge”, which discusses a recent merger of two Atlanta Based companies Construction Resources Inc. and Builder Specialties Inc. ABC subscribers can read the article in it’s entirety here.
…Both Bo Wilkins, partner and co-founder at SoundRiver Advisors LLC, and Don Bravaldo, President at Bravaldo Capital Advisors, help small businesses with their strategies and they agree there is no such thing as too much planning when looking to merge or sell a company.
Bravaldo Added there is really no such thing as a merger because one company always comes out on top. That is why business valuation is such an important step so each business owner knows what he brings to the table.
“It is hard to do any planning if you don’t know where you stand,” he said.
“From a financial perspective you want to get books and records in order and from a legal perspective, you need to have things like operating and employment agreements, to agreements with customers and vendors in place,” he said.
“Often these companies have been run as lifestyle-type businesses for these owners. They have no shareholders or the SEC to answer to, so their financial statements may be a little rough,” Bravaldo said. “We help these businesses realize you need to professionalize this business at least three to five years in advance of a sell.”
They also need to determine if all their eggs are in one basket and if so, diversify their customer and vendor concentration. By reducing that risk, they will increase value, he added.
It is also a good time to look at profitability, find better efficiencies and shave expenses as when possible.
“You can get the maximum value for your business if you take the time to go through a checklist to get your business ready for sale,” Wilkins added.