Strategy + Process = Success

Imagine the Satisfaction of Knowing you Received Maximum Value for Your Company

Princeton Capital  is a boutique M & A advisory firm that specializes in earning sellers a premium for their businesses when selling or divesting. We work with Business Owners to maximize the value of their business through an effective exit strategy that maximizes the value to the business owner or shareholders. Business owners may maximize their benefit from a business sale from a strategic sale of the business, a Management Buy-Out, a merger, or many other strategies.

The question is, which strategy is best for you and your shareholders?

You want to maximize the selling price, but How? There are two Buyers will value a company based upon the future earnings they will earn from the company, and the company’s assets. Princeton Capital has a 3 step process built to maximize the valuation buyers will put on your company, and the return to the shareholders of the seller, that starts with 1) uncovering and marketing all a company’s valuable assets, 2) marketing the company and those assets to the companies and funds that will value them most, and 3) using our experience to maximize the return to the shareholders through effective negotiations, tax strategies, and deal structures.

You want to maximize the actual dollars you receive. There are many examples of business owners who sold their business but

How Princeton Developed the System that Worked

Princeton was built based on its founder’s “less than positive” experience in over 20 years of starting, buying, and selling small to medium sized businesses.  We know firsthand how difficult it is to succeed with a small business, and how difficult it is to execute a proper and efficient exit strategy.  We believe Small Business Owners deserve the maximum value for their businesses, and the assets they have built over the years.

The importance of obtaining maximum value, and achieving a successful sale of Your Company, is not only important to you but also important to the American way of life.  Achieving the “American Dream” means your business has brought economic strength and innovations that affects the lifestyle of many Americans.  Realizing the fruits of your labor and risk, and transitioning your company properly so that it can achieve the next level of success, is extremely important to make certain small businesses continue to thrive.

To achieve the final pinnacle of your success is typically not an easy process.  In our past experience, we found that most business owners were not as successful with this final stage of their American Dream.  This is not just hurtful to the business owner who leaves money on the table, but also harms the ability for someone else to continue or start their own American Dream.

Princeton Capital Strategies Quoted M&A expert quoted on CNN's Money regarding the State of the Business for Sale Marketplace

CNN recently turned to Princeton Capital Strategies for an expert opinion on the marketplace. Please read below.

http://money.cnn.com/2009/04/27/smallbusiness/small_biz_sales.smb/index.htm

As a Business Intermediary here in CT and NY that works with many Business Brokers and M&A (Merger & Acquisition) Advisors, I feel it necessary to disclose the fact that Princeton Capital is successful because business owners select Business Brokers and M&A Intermediaries to help them sell their businesses.  I am writing this objectively, which is how we operate, which can be seen by the multiple times we steer business owners from our firm toward other professionals, when we feel someone else can add more value.

To anwer the question...The fact is that most businesses are not sold by business brokers or M&A (Merger & Acquisition) intermediaries.  Most are sold by owners because a buyer happened to knock on their door at the right time.  When they seek help in selling their businesses, most small business owners turn to their trusted advisors.  For obvious reasons, small business owners rarely have a business broker or M&A intermediary as one of their advisors.  (A recent study showed that Accountants are the most trusted advisors of the Small to Medium sized, or Middle-Market, business owner.)  The decision to sell your business is a very important one, if not the most important professional decision a business owner will make.  Should you use someone to help you?  Which professional should the business owner use to sell their business?  Can they trust a complete outsider to do what is in their best interest?

In my experience I have found that in most situations, (certainly not every circumstance), the business owner's accountant or attorney will offer to be the lead, and basically orchestrate the transaction.  They obviously want to do what is in the best interest of their clients, and probably do not understand the value that an intermediary will provide.  They might not have relationships with a lot of intermediaries, and might not fully understand the process that led to the closing.  In addition, the fee looks extremely attractive.  Whereas they typically have more experience with their trade than the typical business broker or intermediary, most accountants and attorneys do not have the overall skill to get the most value for a business.

I feel the largest value we add to our clients comes from areas where a typical accountant or attorney does not have the experieince or expertise, and therefore "short changes" the business owners.  Those two areas are in the areas of marketing, and running a controlled auction.

There are so many potential buyers for any particular business.  The intermediary or Business Broker earns his fee by looking at buyers that are outside of the "usual suspects".  Strategic Buyers will certainly pay more for a business, but are their strategic buyers outside of your industry peers?  What is the true value of your business?  Is it in your customer base?  Distribution Channel?  Intellectual Property?  Employees?  In addition, Where are the best places to find those buyers?  The list is endless.  The intermediary can discover and articulate the true value of your business, and market that value to a broad audience to get the highest offers.

Running a controlled auction is extremely difficult, but arguably the most valuable service we provide our clients.  Creating a competitive environment for a company, whereas buyers understand that if they do not provide an offer with sufficieint value, the company will go to another buyer, is essential.  This is not easy to do, and contains many pitfalls that can be fatal to the deal.

Therefore you would like soemone to help you who is an expert at marketing, negotiating, and orchestrating the sale.  It costs money, but if that intermediary can get you 20-30% more for your company it is well worth it.  And the right intermediary will be able to do just that.

Princeton Capital Strategies, LLC
www.PrincetonCapitalllc.com
Providing Value Beyond a Business Broker

Ok - talking about the benefits of hiring a Business Broker is self-serving - I admit it. But, it is important that folks understand the value Business Brokers in CT and NY bring to the table.

"Strategic advice, first of all, has become broader than actually doing the deal" - Lazard chairman and CEO Bruce Wasserstein

I just got off the phone with a small business owner in Connecticut, who has owned his business in CT for over 20 years. He is very well networked within his industry, and knows who the likely buyers are for his business. He is a savvy businessman, with a lot of "deal" experience.

He wants to know why he should have to pay a business broker anything, no less the substantial fee most brokers charge. "Where is my ROI on that type of fee?", he asks. Of course, that is a very legitimate question.

The common perception is that you really only need a Business Brokers to find the right buyer. Whereas that may be the case in certain circumstances, it is not the case with most of the deals we work on.  Princeton Capital certainly works hard in scouring the market for a buyer that will offer the highest price for a given company, don't get me wrong, but we add a substantial amount of value beyond that.

But, what good is finding the right buyer if the deal does not ultimately come to fruition? How do you keep the buyer "honest" without getting a competing offer? Suppose you find a buyer willing to pay 10% more for a company, but the owner winds up paying 15% more in taxes? How much does it cost if the process takes 4 months versus the process taking 12 months?

In most "post-sale" studies I have seen, successful sellers have attested to the point made above. The planning for the sale, "hound-dogging" the deal process. quarterbacking the communications between the professionals, and advising on how various deal structures can effect the seller personally are all the major benefits of using a Business Broker.

Ken Ducey, Jr.
Beyond Business Brokerage

Recently, we participated in a Q&A regarding how to sell your business:

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Princeton is Remaking the Way Businesses are Bought and Sold

The Importance of Good Advice when Selling your Business or Buying a Business cannot be overstated.

We know, we have been on both sides of the transaction in the past. The process can be very frustrating and inefficient if not handled correctly. Worse yet, it can wind up in a lose-lose transaction in which neither the buyer nor the seller realize their goals.

Even a minor percentage difference in price can mean a significant amount of money. Most business sales do not realize their maximum value for sellers or buyers for many reasons. Advice from a qualified M&A intermediary with experience can help you avoid mistakes such as:

• tax ramifications
• Keeping the Sale of the Business Confidential
• Understanding the Best Structure for both parties

Princeton is not your typical Business Broker - we are Merger & Acquisition Intermediaries that act as Investment Bankers for your business, utilizing a proprietary system which matches you with the most valuable opportunity for your particular goals.

Princeton is different from a typical Business Broker because we have an experienced team of business brokers and Merger & Acquisition specialists (M&A) to help you get the most value by using customized processes that are typically found in larger investment banks throughout the CT, NY and entire tri-state area.

Princeton will reduce your headaches and stress by giving you an experienced M&A intermediary that you can rely on for professional advice throughout the entire process.

If you are considering selling your business, or just looking at various exit strategies, our process assures you that you will get the most value for your company. Princeton is only compensated after a successful sale of your company.

Call us know whether you are looking at retirement, or a succession for your business.

Please leave your contact information so that we can understand your goals, and begin helping you TODAY!

Most business owners seeking to sell their business will look at the fee of a typical business broker or M&A intermediary and balk.  After all, it can't be that difficult to sell a business.  And the statistics on your side - most business sales do not involve a business broker or intermediary.

This is somewhat self serving, since Princeton Capital Strategies profits from business owners looking to sell their companies, or buyers seeking to buy businesses or companies.  But please read on, as this also gives us an excellent perspective on the work and problems involved.  In addition, Princeton only makes money in the long term where we create value beyond our fees, so we do not take on businesses, or charge fees where we do not believe we can add substantial value.

There are many reasons I could list on why to use a business broker, but I believe the best is simply the numbers, and the large numbers involved.  This is not like selling a used car, where you may or may not be willing to go through the hassle, and might make some additional money.  Chances are this sale of your business is substantial enough that an additional 5-10% (after the intermediaries commission) will mean a lot.  In addition, if the sale is not handled correctly, and the confidentiality is broker, or a competitor gets their hands on some competitive intelligence, the negative impact to your business could be enormous.

A qualified Business Broker or Intermediary will get you more value for your business because they know how to market the company to buyers outside of the "usual suspects".  In addition, they will help you move the sale to the finish line, which is a process most underestimate.

The fact is selling a business is a complex process, filled with pitfalls.  Taking this on yourself, without having the experience of selling multiple businesses in the past, will typically wind up costing you a lot of money and hassles.

Princeton Capital Strategies, LLC

www.PrincetonCapitalllc.com

Providing Value beyond a typical Business Broker

A survey of Business Brokers and M&A intermediaries was run to determine what the buyers are looking for as they look for a business for sale.  The survey was conducted by BusinessesforSale.com.  The top four responses were as follows:

• They want to move into a different field of work

• They want to relocate

• They are looking to expand a current business

• They want to be their own boss

If you want to have a successful business sale, you need to look at these to determine how you can best market your business.  If you look at any one of these, the "feature" a prospective business buyer is seeking in order to make his decision is simplicity.

Many of the buyers we work with here in Connectictut, or the New York area, are scared away from a prospective business due to the complexity involved.  With complexity, comes increased risk, and fear, and then it is almost impossible to have a buyer make a commitment.

It does not matter if the prospective buyer has experience in the industry or not.  In almost every case, each business is unique, and has a unique business model.  The prospective owner does not want to spend years coming up to speed on that model, or learn how that business makes money.

As a business owner, you need to work with a business broker, M&A intermediary, or Investment banker to outline the business business model, and make the business as simple as possible.  The buyer will want to know that they can step in tomorrow and begin making money, like clockwork.  You must draw that map, and show them the way.

Recently I reread a study that had been conducted by Newport Partners in 2007 to determine what successful business sellers would do differently if they had to do it all over again.  The results are extremely important for all business sellers or business owners looking to sell their businesses.

The study interviewed 100 Canadian business owners who have sold businesses in the last five years.

Business Owners are selling their companies as a reactionary process, instead of planning the process out methodically. When asked why they sold their businesses, they received the following responses:

• 26% “I received an attractive offer"

• 14% "I needed more capital or strategic support"

• 13% "sale was motivated by partners or shareholders"

When asked if they had planned the sale in advance:

• 23% planned the sale in advance, 62% wish they had done so

All professionals and sellers agree that selling a business is much more successful when methodically planned in advance.  This statistic means that many business owners are leaving a significant amount of money on the table, and experiencing more angst in the process than they should be.

Business Owners are not getting the proper advice when selling their company. 81% of the respondents relied on advice of their attorney, and 68% relied on their accountant for advice.  Only 32% hired a Mergers & Acquisition Intermediary, Investment Banker, or broker.  71% of the business sellers recommend you select an advisor experienced in business sales, but only 40% of them did.

The process of selling a business always appears on the onset to to be a simple sale, much like selling a building or a large asset.  The truth is sellling a business is very complicated, and there are a large number of traps and pitfalls involved.  You need to have the right team with you from the start, it is too important to learn as you are going along.

Sellers are not marketing their businesses to all the potential buyers, and therefore not obtaining maximum value for their business. Only 42% of the business sellers evaluated all types of buyers, but 74% recommend that other do that.  This is another reason why an outside business broker, or M&A intermediary is important to the process.  The business intermediary will know how to identify and market to a large range of prospective buyers.  Marketing businesses is their core expertise, and they have experience recognizing buyers that you might not have thought of otherwise who would have an interest in buying your business.

It is important to learn from others who have been through this process before, and heed their advice so that you get the maximum value for your company.

Princeton Capital Strategies, Inc.

Princeton Capital Strategies, LLC

info@PrincetonCapitalllc.com

Ridgefield, CT-  - Princeton Capital Strategies Business Brokers and M & A Corporation is pleased to announce the business sale of a Medical Equipment Service Company.  On March 2nd, 2009 two investors from NY acquired substantially all of the assets of a prominent Medical Equipment Service company based on Long Island, NY.  The business sale was represented by Princeton Capital Strategies, LLC.

The Owner of the Medical Service Company developed the company over a number of years and was seeking retirement.  The owner founded the company after he realized a niche in the medical equipment marketplace, and developed a system fulfilling that niche.  He came to Princeton Capital asking what possible exit strategies he could consider.

“Like most owners, they did not have a lot of experience and selling and marketing a business.  They wanted to be certain the process would be done professionally, that they would get a great valuation, and their exit strategy could be executed as efficiently as possible”, said Ken Ducey, Jr., Managing Director of Princeton Capital.  “We developed a good understanding of the business, and marketed it to strategic medical industry players as well as private equity companies and investors.  Princeton developed a competitive bidding process through a controlled auction and in the end, the best fit for the seller was an investor group.”

“I could fill a complete page with accolades for Ken and his performance in representing us. However, his effectiveness sums it up.” The owner of the medical company stated.

The buyers were delighted with the business, and working with the owner for the initial period.  The chemistry is great, and exactly what the business needed in order to get to the next level.

The company began out of a small office complex located in Long Island, NY, and eventually grew to a point where they needed to expand.  For the sake of the customers, employees, and the industry, the owner understood he had to expand.  The new investors are excited for the business to realize its potential.

Mergers & Acquisitions (M & A)is a unique business opportunity to sell their business, but because most business owners only sell a business once in their careers, they learn too late how to work with business brokers, business valuation firms, and investment banks.  Princeton Capital is an M&A intermediary in the CT NY area that provides value beyond that of a typical business broker.  Princeton Capital can bring more qualified buyers to a business owner in less time, because our methods come from world-class investment banks instead of typical business brokers.

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For additional information on Princeton Capital Strategies, and how they put together strategic exit strategies, please see our website at http://www.PrincetonCapitalllc.com.

We would love to hear your thoughts – please go to www.PrincetonCapitalllc.com/Selling-Business-for-Sale-Blog/