What's Trending - Evolving Exit Strategies - Modern Trends Shaping Deals

Broadly speaking, what buyers have been looking for in a business has not materially changed over the past decade – strong cash flow, growth potential, synergies, etc. However, changes in technology, the interest rate environment, and continued economic uncertainty have made it imperative for business owners to shift how they prepare for an exit process.

While these preparation considerations should be in place before the sales process starts, evaluation of these considerations occurs during the pre-LOI and due diligence phases as buyers continue to assess investments with greater scrutiny and smaller margins for acceptance. How do the latest trends in key considerations compare to traditional approaches?

Traditional Considerations	Trending Considerations
Cash Flow Positive Focus:	Cash Flow Resilient Focus:
- Upward trends and a track record of strong revenue and cost management.	- Enhanced revenue predictability through longer-term contracts.
- Opportunities for expansion with positive cash flow potential.	- Clear vision and strengthened market leadership in core products/services with tangible ROI.
- Working capital management, although lacking in granular data visibility.	- Active use of company data (including BI and AI) for visibility into cost levers and enhanced CAPEX management, yielding higher returns.
Management Focus:	Enterprise Focus:
- Retention of key personnel.	- Defined succession plans for key roles.
- Ability to articulate management's role in support/transition post-close.	- Capability to manage company culture and mitigate perceived negative impacts from a sale.
	- Effective management of remote workforces.
Technology Opportunities for Improvements:	Already Technology-Fluent:
- Operating with older/multiple ERPs.	- Efficient ERP/operational systems or a well-articulated cost/benefit upgrade plan.
- Basic cyber focus, primarily endpoint and firewall protection.	- Proactive cyber testing, remediation, and advanced protection (measures to prevent, detect, and remediate).

Dry powder continues to accumulate while exit activity remains subdued. Historically, this capital will eventually need to be deployed, but with heightened buyer scrutiny, it’s crucial for company and firm managers to focus proactively on what matters now. Regardless of whether a sale goes through, there’s a silver lining for sellers who prioritize preparation: well-executed measures can not only enhance the sale price and streamline the transaction process but also position the business for future growth and scalability.

Home / Insights / Articles / Article Details

Printable Version

Traditional Considerations	Trending Considerations
Cash Flow Positive Focus:	Cash Flow Resilient Focus:
- Upward trends and a track record of strong revenue and cost management.	- Enhanced revenue predictability through longer-term contracts.
- Opportunities for expansion with positive cash flow potential.	- Clear vision and strengthened market leadership in core products/services with tangible ROI.
- Working capital management, although lacking in granular data visibility.	- Active use of company data (including BI and AI) for visibility into cost levers and enhanced CAPEX management, yielding higher returns.
Management Focus:	Enterprise Focus:
- Retention of key personnel.	- Defined succession plans for key roles.
- Ability to articulate management's role in support/transition post-close.	- Capability to manage company culture and mitigate perceived negative impacts from a sale.
	- Effective management of remote workforces.
Technology Opportunities for Improvements:	Already Technology-Fluent:
- Operating with older/multiple ERPs.	- Efficient ERP/operational systems or a well-articulated cost/benefit upgrade plan.
- Basic cyber focus, primarily endpoint and firewall protection.	- Proactive cyber testing, remediation, and advanced protection (measures to prevent, detect, and remediate).

© Copyright CBIZ, Inc. and CBIZ CPAs P.C. (together, “CBIZ”). All rights reserved. Use of the material contained herein without the express written consent of the firms is prohibited by law. This publication is distributed with the understanding that CBIZ is not rendering legal, accounting or other professional advice. The reader is advised to contact a tax professional prior to taking any action based upon this information. CBIZ assumes no liability whatsoever in connection with the use of this information and assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

CBIZ is the brand name for CBIZ CPAs P.C. and CBIZ Advisors, LLC (together), a national professional services company providing tax, financial advisory and consulting services to individuals, tax-exempt organizations and a wide range of growth-oriented companies. CBIZ Advisors, LLC is a fully owned subsidiary of CBIZ, Inc. (NYSE: CBZ). CBIZ CPAs P.C. is an independent CPA firm that provides audit, review and attest services, and works closely with CBIZ, a business consulting, tax and financial services provider. CBIZ and CBIZ CPAs P.C. are members of Kreston Global, a global network of independent accounting firms. This publication is protected by U.S. and international copyright laws and treaties. Material contained in this publication is informational and promotional in nature and not intended to be specific financial, tax or consulting advice. Readers are advised to seek professional consultation regarding circumstances affecting their organization.

What's Trending - Evolving Exit Strategies - Modern Trends Shaping Deals

Explore Trending Exit Strategies & Deal Innovations

Explore Trending Exit Strategies & Deal Innovations

Insights in Your Inbox