Corbett Magazine Master June 5

EXPLORE CORBETT BRANDS SPECIALIZED DIVISIONS

WE CREATED THE DEAL ARCHITECTS AS A FORUM TO BRING TOGETHER LEADING EXPERTS, ADVISORS, OWNERS AND INVESTORS IN THE ACQUISITION AND SALE OF SMALL AND MIDDLE MARKET BUSINESSES. WE HOPE YOU ENJOY OUR INAUGURAL ISSUE!

“The

Great Exit”

Todd Corbett Smith, founder of CORBETT BRANDS, looks to the future in his first feature article. Over the next decade, over 10 Trillion dollars in business assets will be sold.

In “The Great EXIT,” he shares his thoughts on this MEGA-TREND and what it may mean for Corbett’s clients.

BRAND

The Contrarian Voice

EDITOR AND CORBETT BRANDS ADVISOR

Christopher A. Farrell has been a TRADER in the financial markets for nearly 30 years.

In “SELL WHEN YOU CAN”, he shares his LESSONS from the trading floors of WALL STREET on the ART of the PROFITABLE EXIT.

The Grease “Trap”

RESTAURANTEUR MARTY BLOOM has owned 38 restaurants in the BOSTON area over the past 30 years. He has made money on 37 of them.

As a CORBETT BRANDS ADVISOR, he shares some of his wisdom on how to stay PROFITABLE and avoid PITFALLS.

BRAND

THE GREAT EXIT FEATURE ARTICLE

By Todd Corbett Smith

ARE YOU PREPARED?

THE 10 TRILLION DOLLAR MEGA-TREND

It is no secret that the baby boomers are retiring as the wealthiest generation in American history. While those born between 1946 and 1964 only make up a bit over 20% of the population, they have amassed a majority of the tens of trillions of dollars of investment portfolio and real estate value.

While much attention has been paid to their effect on the stock market, and the pending wealth transfer that will take place as this generation ages into their 80’s and 90’s, much less has been said about the consequences of their retirement on small business.

“OVER THE NEXT DECADE, OVER 10 TRILLION DOLLARS IN BUSINESS ASSETS WILL BE SOLD. “

It is estimated that over 10 trillion dollars in business assets may change hands over the next decade. At Corbett Brands, we call this phenomenon “The Great Exit.”

In my first feature article for the inaugural issue of The Deal Architects, i would like discuss this mega-trend, and what it might mean for the future.

While no one has a crystal ball, there are risks looming on the horizon for buyers and sellers of small businesses that are worth exploring. The first risk is likely the most obvious: will there be a new wave of sellers in the small business marketplace over the next decade, and will this have a negative impact on prices?

“AT CORBETT BRANDS, WE CALL THIS PHENOMENON

“THE GREAT EXIT,” WHAT DOES IT MEAN FOR THE FUTURE?

Unlike a stock portfolio, it is obviously much more challenging to transfer the ownership of a small business to your children. An issue that we see often at Corbett are owners of family businesses that are forced to sell because their own children do not want to take over the business.

While there is no way to know for sure, it does not hurt to be aware of this risk if you are deciding to sell your business in the near future. With the economy currently in good shape (inflation notwithstanding), it might be worth imagining a time in the next few years when economic conditions are not quite as good.

“WILL THERE BE A NEW WAVE OF SELLERS OVER THE NEXT DECADE? WILL THIS HAVE A NEGATIVE IMPACT WILL THAT HAVE ON PRICES?”

Imagine the challenges that a business owner might face trying to sell his or her business when a poor economy is compounded with a crowded marketplace of retiring baby boomers trying to exit their businesses. Every problem has a solution. The most important question is: are you prepared?

“EVERY PROBLEM HAS A SOLUTION. THE MOST IMPORTANT QUESTION IS: ARE YOU PREPARED”

SELL WHEN YOUCAN THE CONTRARIAN VOICE

By Christopher A. Farrell

THE MARKET -TIMING DILEMMA

Sell when you....not when you have to. I first heard those words as a young trader on a crowded trading floor on Wall Street nearly 30 years ago. The year was 1995. I was 22 years old, on the preferred stock desk at Gruntal and Company, at the time one of the oldest brokerage firms in New York City with a history dating back to the 1880’s.

Gruntal was located right across the street from the New York Stock Exchange at 14 Wall Street. I learned many lessons from that trading floor that still serve me well to this day.

Trading is an extremely challenging way to earn a living. Timing the market successfully is one of the most elusive and difficult skills to develop in part because it requires a bit of contrarian thinking. You have to react before others. This is why most people fail. By time you get “proof” that it is the right time to sell, it might be too late.

“SELL WHEN YOU CAN, NOT WHEN YOU HAVE TO. “

Are lessons learned on the trading floors of Wall Street applicable to private deals? In my opinion, the answer is yes. When i joined the Corbett team and got involved in buying and selling businesses, i kept thinking about the similarities between the two worlds.

Businessowners, in many ways, sit on a knife’s edge. Unlike the financial markets, private businesses are not liquid.

“ARE LESSONS LEARNED ON THE TRADING FLOORS OF WALL STREET APPLICABLE TO PRIVATE DEALS?”

There may literally only be one buyer and thus, only one chance to sell near the price you want. The window to safely exit your business, at a good price, can be extremely narrow. In financial market terms, we call this a “thin market” with a “wide bid-ask spread.”

So how do you navigate this kind of market risk? With caution. While there are some deal terms that are worth walking away from, it is always prudent to think about worst case scenarios upfront. Everything has a price. If i lose this buyer, what are the financial consequences? How difficult will it be to find another buyer?

“There may literally only be one buyer and thus, only one chance to sell near the price you want.”

“The window to safely exit your business at a good price can be extremely narrow.”

We created The Deal Architects as a platform to bring together advisors and experts to discuss the benefits and risks of buying and selling businesses. Ultimately, to help our clients to better navigate those risks. At the end of the day, human psychology does play a role in this process. Fight the urge to go with the herd. The perfect price and the perfect time to sell may not exist. Waiting just a bit too long to get the perfect price carries risks that can jeopardize your exit .

A little contrarian thinking can go a long way.

“The perfect price and the perfect time to sell may not exist. Waiting just a bit too long to get the perfect price carries risks that can jeopardize your exit.”

“A little contrarian thinking can go a long way.”

BOSTON ANGLE

THE GREASE TRAP

By Marty Bloom

HARD LESSONS LEARNED FROM 38 RESTAURANT VENTURES

CORBETT BRANDS is a full-service business and commerical real estate brokerage with national reach, serving New England, New York, Florida and California. With over 700 transactions totaling over $200,000,000, let the Corbett Solution work for you.

Over 700 deals

200,000,000, I N SALES