Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

September 9, 2009

What Is An Investor To Do Now?

By Joseph Eneldas

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What is the investor to do now? With record amounts of cash on the sidelines, debt yields at history lows and gold hitting new highs, many potential investors/business buyers are questioning where the economy will be heading from here and what is the best time to acquire a business.

Whereas we would never claim to have that crystal ball, we can however, contribute a few recent observations out of our trade.

In terms of the economy’s direction, several factors point either way: on the “good side”, durable goods orders are way up for goods such as appliances, existing home sales were up by 7%, the stock market is way up, and cash for investments is plentiful available. On the “bad side” however, consumers are continuing to reduce their record debt levels, thus, inducing somewhat weak spending, surveys point to weakening business profit margins, and stocks are certainly no longer cheap. With no clear trend in sight, our firm believe is that the economy will eventually experience a slow recovery.

More importantly, though, is the question of personal life change and timing for a potential business buyer. The management of many mid sized businesses can certainly not exclude themselves from general macro economic trends, but the individual management talent and motivation more often overrules such broad based trends. Some of our (sell side) clients have convincingly demonstrated how to significantly outperform their peers in this environment, not only in terms of gaining market share but also in their financial performance. Significant adaptation in business methods to these challenging times have made them better companies.

Thus, the real question for the business buyer then becomes, does she/he see opportunity in a particular market and does she/he have the motivation, time and talent to turn/expand this opportunity into a successful investment by way of purchasing a business.

Taking that point of view, timing becomes somewhat of a secondary issue. As we had reiterated a few months back, many businesses generate good cash flow for the seller even during “bad” times, thus, the need to immediately sell taking a second rank. Yes, there are businesses with poor cash flow wanting to sell immediately which could represent an opportunity for a buyer, but if the low cash flow is a structural based issue will the cash flow improve then during an economic upswing, or is it merely a matter of the weak being sorted out during a down turn? Consequently, many “opportunities” during poor economic times are not really opportunities but merely represent a rude awakening during a better economic environment.

We have consistently worked with sellers who have proven that they can weather a storm and have been in business for many years and thus, can only encourage any investor – or business seller for that matter – to give us the opportunity to discuss their plans in detail with us. We have the experts on staff to provide a comprehensive review of your plans.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or info@neumannassociates.com

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Client Testimonials

“I've always had great respect for those who are excellent in their fields of endeavor. Gary certainly lived up to that standard. He was knowledgeable, persuasive, determined and ultimately the main driving force that culminated in the very successful sale of my business. Well done Gary!”

Stuart Zeiff, Seller

“ I appreciate your diligent approach to screening buyers and sellers as well as the high quality CIM that you produce.”

Andrey O, Investor

“Finally enjoying retirement after recently selling my business using the services of A Neumann & Associates. Joe Oddo provided the conduit to a successful transaction. Joe knew when to inject input and when to simply listen and allow the buyers to vent, step back and regroup. The outcome met our expectations and got us to the finish line, which included my staying with the company six months in order for the buyers to get their footing and keep our workforce in the loop. He helped at every step by providing his expert guidance & resources. Thank you!”

Emily Parker Myers, Co-Owner - Myers McRae

“I had been in touch with Karin and Gary from A Neumann & Associates regarding some opportunities and was looking forward to meeting with them. Hence, when they organized a seminar in Princeton, NJ, I was quick to sign up. The seminar was very informative as the team walked the attendees through various scenarios and referenced real life buying/selling situations they had been through. The sessions by Gary, Karin and Achim were crisp and focused and brought clarity to potential seller and buyers. I strongly recommend the team and look forward to continue working with them.”

Gaurav Tyagi

“Thank you for your Event on "How to value, Sell, and Buy A Business for Maximum Profit" and the insight into ANA’s approach on what is involved in the Business Exit for sellers. Garys Hervieiou's "Business Valuation", Achim's "Deal structure" presentation and Karin’s "Preparing the Package" are real street knowledge shared. They answered attendees questions which makes it more interesting for learning from others. Great for small businesses like us. The presentations were totally worth our time and travel for the event to Princeton, NJ from Rockville MD. Ravi Bhutani, President, CIPS”

Ravi Bhutani

“Gary, this is to thank you for an excellent job done in selling our business. We could never have done it without your professional expertise, dedication and time put in without reservation to make it happen. We will gladly and highly recommend you to anybody in our position.  It was a pleasure to work with you.”

Pat Iammatteo, Owner

“Your vetting is simply outstanding, among the best I've seen from a broker.”

Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio
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Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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