Optimizing Your Business for a Successful Exit

About the Episode

Jacob Orosz and Joe Bergin discuss the complexities of business valuation, which extends beyond simple EBITDA multiples. They discuss the importance of clean financials, a solid leadership team, and diversified customer bases to attract higher valuations. They also look at the benefits of an owner taking an outsider’s view of the company to significantly reduce risk factors, such as owner dependence and customer concentration, to enhance valuation.

“I think a well-run process is the best way to increase the value that you receive for your business.”

Joe Bergin

What You’ll Learn

  • Valuation is not just a numbers game: Subjective factors like risk, customer concentration, and management team can significantly impact a company’s worth.
  • Preparation is critical: Preparing your business for sale by reducing risks, diversifying the customer base, and building a strong leadership team can lead to a higher valuation.
  • The sale process itself plays a critical role in maximizing value: A well-run process with multiple bidders can drive up the purchase price.
  • Look at your business through the buyer’s eyes to identify areas of weakness and risk: Addressing potential deal killers and aligning your business with buyer priorities are key to achieving the best possible outcome in a sale.

Topics Covered

Why is valuation more than a numbers game? [2:32]
How does a sell-side quality of earnings report impact an M&A transaction? [7:13]
What is the difference between EBITDA and adjusted EBITDA? [11:38]
How can a seller impact their company’s multiple or EBITDA? [16:01]
What are the primary areas of risk that a seller can address before the sale process? [19:37]
What role does the sale process play in valuation? [26:01]
How do buyers perceive risk, and is it different from the seller’s perception? [30:03]
Why is it important for an owner to look at their business from an outsider’s perspective? [37:21]
What is the easiest way to improve the value of a company? [41:04]

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Meet Our Guest

Joe Bergin

Joe Bergin

Co-Founder, Commonwealth M&A | Philadelphia, PA

Joe graduated from Penn State University (University Park) with Bachelor’s degrees in Finance and Economics. Joe is also a Certified Management Accountant and worked at Johnson & Johnson for over a decade. During his time in corporate finance, Joe developed experience and skills ranging from strategic planning to complex financial modeling and business valuation. Joe passionately believes that Commonwealth M&A clients deserve to be represented with the same level of sophistication that Fortune 100 companies receive, regardless of deal size.

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