By: One World Publishing
Many business owners dream of a successful exit strategy, although it often seems in the distant future. In 2025, for those who believe the time may have come to think about their exit, whether it be for retirement or to start their next venture, the economy could present opportunities for maximizing a potential sale. With the proper strategic planning and advisors, many experts in the space suggest there may be a plethora of buyers looking for acquisition targets across a number of industries.
Dena Jalbert, CEO of Align Business Advisory Services, an M&A advisory firm recognized for its experience, offers valuable insights into the current market landscape and provides guidance for business owners navigating the selling process. She emphasizes the importance of thorough preparation and a proactive approach.
“A successful sale requires meticulous planning and a deep understanding of the current market dynamics,” she states. This includes evaluating the company’s financial performance, identifying potential buyers, and positioning the business for maximum appeal. By carefully considering these factors and working with experienced advisors, business owners may enhance their chances of achieving a successful and profitable exit.
What is the outlook for potential sellers in 2025?
Dena Jalbert: Our outlook for potential sellers in 2025 is optimistic based on current trends. The market appears to have strong fundamentals, with strategic buyers actively seeking quality acquisitions. We’re seeing particular interest in companies that have demonstrated resilience and maintained strong cash flows through recent economic fluctuations. The healthcare, home services, and technology sectors are especially active, with strong valuations for companies showing consistent growth and solid EBITDA margins.
Do you think interest rates continuing downward will bring more buyers off the sidelines?
DJ: Though the pace of cuts might not be as rapid as was expected earlier this year, the expectation of lower rates is still bringing more buyers into the market. We’re observing increased activity from both strategic and financial buyers who had previously adopted a wait-and-see approach. Lower borrowing costs could make deal structures more attractive, and we anticipate this might continue driving transaction volume throughout 2025.
With capital gains tax increases now off the table with the incoming administration, are you hearing from more sellers who are ready to exit?
DJ: Yes, the clarity around capital gains tax policy has removed a significant uncertainty from the market. We’re seeing an uptick in conversations with business owners who had previously been hesitant to explore exits due to tax concerns. This stability in the tax environment, combined with current strong market conditions, might create a window for sellers to maximize their exit value.
What are the concerns sellers have before putting a company on the market?
DJ: Beyond the tax concerns already discussed, business owners are particularly focused on maintaining confidentiality throughout the sale process to protect customer relationships and employee morale. They also express concerns about business continuity post-transaction, especially regarding how they can ensure an acquirer’s commitment to employee retention and the preservation of company culture. Additionally, sellers are concerned about the time commitment required for the sale process and how they can minimize its potential impact on day-to-day operations.
What preparations should a seller make before starting a conversation with an M&A advisor?
DJ: Each situation is unique, and we recommend early consultation to develop a tailored approach that aligns with your specific business objectives and current market conditions. First, sellers should ensure their financial records are accurate, current, and well-organized as a critical step. This includes having at least three years of clean financial statements and current-year projections with solid supporting documentation. Second, implement and document strong operational processes and systems that demonstrate business sustainability. Third, develop a clear growth strategy and identify untapped opportunities – this will help articulate future value to potential buyers. These steps could help position sellers for a more efficient process.
Disclaimer: This content is for informational purposes only and is not intended as financial advice, nor does it replace professional financial advice, investment advice, or any other type of advice. You should seek the advice of a qualified financial advisor or other professional before making any financial decisions.
Published by Zane L.
