4 Discussion Points for your End-of-Year Advisory Team Meeting


If you’re a business owner preparing for a 2020 transaction, an end-of-year business reflection is one of the most beneficial activities you can complete with your advisory team. Meticulous planning is crucial when it comes to selling your business, and the end of the year is a point from which you can launch yourself into the new year with a fresh outlook and a detailed plan. It’s the perfect time to meet with your advisory team and take stock of the year you’ve had while forecasting the year to come.


Reflect on Your Accomplishments this Year


If you’re planning to sell in 2020 you have likely been preparing for a successful transaction for months or even years. If you’ve had major accomplishments this year, financial or otherwise, it is time to reflect and list these occasions that have the potential to enhance the value of your business:

  • Financial success: Was 2019 a banner year? Did revenue and profit hit an all-time high? Revel in the fact that your profits were larger than they ever have been, because a purchaser will find such growth and maturation of the business valuable.
  • Business success: Purchasers look for both continuity and change when evaluating a purchase. Continuity is great when it comes to topics such as high employee retention and significant repeat customers. Change is appealing when a company successfully introduces a new business line or implements state-of-the-art software. Make sure to take stock.
  • Industry Recognition: Have you, your company, or your products or services been awarded or recognized by the industry? Get a list together of who or what was honored; a buyer will find such awards attractive.


Create Goals for 2020


People make personal goals for the new year – they should make goals for the business too. Take the time to reflect on areas of improvement that you and your team have spotted in 2019- now is the time to develop a plan of action. Anything that could potentially devalue your business that is in your control should be addressed.

  • How does your benchmark data compare with others in your industry? You want the ratios for your business to be equal to or above average in your industry.
  • Is your succession plan up to date? Not only is the succession plan key to ensuring long-term survival of your business, but your company is more marketable when it is time to sell if it can operate in your absence without your constant supervision.
  • Does your business have high customer concentration? Being highly reliant on a small group of customers makes your revenue highly sensitive. If a single client accounts for 10% or more of your revenue, or when your 5 largest clients collectively account for 25% or more of your revenue, your customers are highly concentrated. Concentration devalues businesses and increases risk in the eyes of a potential purchaser.
  • Are your historical financials in order? More likely than not, a buyer will want to see at least 4 years of clean historical income statements and balance sheets, typically broken out by month. Buyers may be wary if these financials are difficult to decipher. Further, addbacks are a common source of negotiation between potential purchasers and the seller. An addback can be a personal expense run through the business to minimize taxable income, such as a personal car, golf course membership, family salaries, etc. Addbacks can also be one-time business expenses like legal fees, accounting fees, or expenses related to property damage. They are common in transactions, but excessive addbacks may raise a red flag to the potential purchaser.


Get Goals and Important Checkpoints Aligned with Your Team


What thresholds will you cross in the coming year? What do you want and how will you put it into action? Your advisory team needs to be on the same page- YOUR page. Evaluate what still needs to be done in preparation for the transaction, make sure everyone knows their role, important timelines, and has an understanding of priorities.

What are some considerations you would expect to have in the near future to assist with the sale of your business? Some important ones are:

  • The right type of buyer for your business
  • The value of your business currently
  • Your personal transaction goals: Do you want to move to the beach? Take on a reduced workload? Purchase another business to grow?
  • Your financial transaction goals: Do you want to sell for all cash up front? Only sell part of your equity? Will a sale today be enough for you to live on for years to come?
  • Who is your transaction team


Plan on the End with You in Mind


This is a great time of year to pay attention to what’s most important to you and your family. Reflect on the personal goals you have for selling your business, and what is most important to you as you hand it off to someone else. Business owners often have personal goals in addition to financial goals in connection with a transaction. It’s important to define these goals, because they will help you navigate the other questions you need to answer in order to be satisfied with a transaction.

  • Do you want to stay involved in operations after the transaction?
  • Do you have goals for the company’s legacy?
  • What familial goals do you want to fulfill?
  • Is it important for the transaction to include retention of employees?


These are some of the important questions to ask yourself and to establish answers before reaching out to potential buyers.