THE EXIT STRATEGY PLAYBOOK

A manual offers expert advice on selling a business.

Coffey, who wrote The Private Equity Playbook(2019) and has “bought, sold, and financed around one hundred companies in twenty years,” makes a compelling argument for owners to prepare for a business sale years before they’re ready. Whether or not they heed that sound advice, entrepreneurs are sure to benefit from the author’s wisdom. This four-part “playbook” covers the bases: looking at buyers, preparing a business for sale, working with advisers, and managing the sale process. Part 1 addresses two basic types of buyers: strategic and financial. Coffey compares and contrasts them, supplying insights into each. Included is a nifty formula to estimate the size of a target financial buyer. A brief section discusses other buyer types, including Special Purpose Acquisition Companies, which are currently in vogue. Part 2 is all about preparing for a business sale; the information shared by the author here is invaluable. Coffey provides a clear definition of the variations of “earnings before interest, taxes, depreciations, and amortization”—“a measure by which all companies are valued by most strategic and financial buyers.” He deftly explains such key financial terms as cash-basedversus accrual-based accounting, generally accepted accounting practices, and quality of earnings. He also delivers a useful chapter that will likely help business owners increase the value of their companies by isolating their real estate holdings from any sale. Tax advisers, accountants, attorneys, and investment bankers are considered in Part 3. Not only does Coffey describe these roles succinctly, he also presents lists of questions to ask when evaluating such professionals. In Part 4, the author does an excellent job of detailing a typical business sale process, including steps, documentation, and meetings. The “example questions” to ask financial or strategic buyers are sure to help any seller garner vital information. This section also features sage counsel regarding how sellers should behave and why it could be beneficial for them to remain involved in a company even after a sale. Business owners who digest the instructive material in this book should be far better prepared for a maximum value sale.

An authoritative and well-organized “sell smart” guide.