Angela Mader founded fitlosophy

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Angela Mader founded fitlosophy ®, a fitness and lifestyle products company, in 2008. Beginning with a fitness journal she called “fitbook”, Mader built a brand that focused on helping customers achieve their fitness goals.

By 2017, fitlosophy had grown to 6 employees, $2 million in top-line revenue and Mader was selling her journals in 16,000 stores including giant retailers like Target, Walgreens and CVS. That’s when CSS Industries (NYSE: CSS) came knocking.

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Six things to understand when negotiating with a private equity entity
Private equities entities have well prepared specialists who know how to satisfy their interests and buy at very attractive prices. They will be your partners and you will have to trust them when they become part of your company, but before this will happen, they are your opponents and you should be careful to protect your interests. In this article you will learn about six methods you can use when negotiating with a private equity firm.
Consider these recommendations looking at a private equity entity

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Six Steps to create a business plan

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Regardless of what stage a company is at in its corporate life cycle, the market conditions it faces or how successful it is, it can always benefit from creating and/or updating their business plan. In addition to serving as a Vision and mission statement on guiding the entire team, a great business plan will help articulate strategy on the vision to your stakeholders that are vital for a firm’s success, including customers, financing parties, potential joint venture partners and counterparties in M&A transactions. This article identifies six steps that entrepreneurs and companies should keep in mind when creating and implementing their business plans. Read More

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One of the biggest mistake owners make in selling their business is being lured into a proprietary deal.

The Definition Of A Proprietary Deal

Acquirers land a proprietary deal (or “prop deal”) when they convince owners to sell their businesses without creating a competitive marketplace. Acquirers running a proprietary deal know they don’t have any competition and tend to make weaker offers with more punitive terms because they know nobody else is bidding.

Many founders become the target of a proprietary deal without even knowing they have been duped. First, someone senior from the acquiring company approaches the founder, complimenting them on their business. The acquirer suggests lunch, and then high-level financials are exchanged. Soon, the owner starts going down a path that is difficult to come back from.

As the parties in a proprietary deal get to know one another, founders often share information with the acquirer that puts them in a compromised negotiation position. The interactions are set up as friendly exchanges between two industry leaders, but many founders reveal key facts in these discussions that end up being used against them when negotiations turn serious. Business owners also become more emotionally committed to selling the more resources they invest in the process and the more time they spend thinking—perhaps dreaming—of what it would mean to sell their business..

How To Avoid Getting Taken In By A Proprietary Deal

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If you decide to sell your business to an outside acquirer, you’re going to have to decide between a financial and a strategic buyer—understanding the different motivations of these two buyers can be the key to getting a good price for your business.

A financial buyer is acquiring your future profit stream, so they will evaluate your business based on how much profit it is likely to make and how reliable that profit stream is likely to be. The more profit you can convince them your company will produce, the more they will pay for your business.

But there is a limit to how much they will pay, because financial buyers are playing the buy-low, sell-high game. They do not have a strategic rationale for buying your business. They don’t have an army of sales reps to sell your product or a network of retailers where your product could be merchandised. They are simply trying to get a return on their investors’ money, so they tend to buy small and mid-sized businesses using a combination of this investment layered on top of a pile of debt, and they want to buy your business as cheaply as possible with the hope of flipping it five or ten years down the road.

Because financial buyers are usually investors and not operators, they want you and your team to stick around, so they rarely buy all of a business. Instead, they buy a certain amount and ask you to hold on to a tranche of equity to keep you committed.

A strategic buyer is a different opportunity—usually a larger company in your industry, they are evaluating your business based on what it is worth in their hands. They will try and estimate how much of their product or service they can sell if they added you into the mix. Because of their size, this can often lead to buyers who are willing and able to pay much more for your business.

Tom Franceski and his two partners had built their business, DocStar up to 45 employees when they decided to consider selling the business to some Private Equity (PE) investors. The PE people offered four to six times Earnings Before Interest Taxes Depreciation and Amortisation (EBITDA), which Franceski deemed low for a fast-growing software company.

Franceski was then approached by a strategic acquirer called Epicor, which is a global software business with a lot of customers who could use what DocStar had built. Epicor offered DocStar around two times revenue—a much larger multiple than the PE firms were offering.

Do you want to improve the value of your business?

Simply click on the ‘Get Started’ button on our home page: www.calderbusinessvaluations.com.au www.calderbusinessvaluations.com.au complete the Confidential questionnaire and we’ll get in touch to discuss our proven methodology for maximising the value of your business.

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When the opportunity to buy the storied boat manufacturer Chris-Craft came along in 2001, Stephen Heese pledged roughly 80% of his net worth to buy the assets of the bankrupt company with the help of his friend and business partner, Stephen Julius.

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WHO IS YOUR IDEAL BUYER?

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Many businessmen sell their company to the first person who gives them an offer. Big mistake. If you have spent many years building a business, looking after every detail, and creating value, don’t just sell to the first person willing to buy from you. Plan the sale and look for your ideal buyer. Of course, finding the ideal buyer requires a lot of effort- it involves using a strong search methodology and combing the market for all possibilities. But in the end it will be worthwhile because the difference in price will be substantial.

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What are the Difference Between Private Equity & Venture Capital

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Consider as to why business owners would ask International Business Intermediaries advice to find the right venture capital provider that might have an interest on acquiring part and/or all of their company. Nor is it uncommon for start-up businesses to ask International Business Intermediaries as advisors about possible investments from private equity providers.

If you’re a business owner and you’re looking to raise capital and/or sell your company… please do not be afraid to admit if you are not aware of exactly whom you should be talking to.

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TO CHANGE YOUR BUSINESS MODEL: WHAT IS YOUR STRATEGY…

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In the today’s rapidly changing world you must constantly seek to improve your business model and act bravely anytime you see the chance.

You´ll have challenges (some call them problems, we call them opportunities). Take it as a strategy game where you compete with everyone else. Think that life is like the game of Monopoly and that everything goes back inside the box once the game ends. You included. It doesn´t matter how large the company you have built is, what´s important is the road, the good you have done while travelling it, the people you have helped grow and how you have enjoyed it.

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NOW IS THE TIME TO SELL YOUR BUSINESS

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It may have taken you a lifetime or even generations to create substantial value for your business, but with the right planning and advice, it may take only a year or two to double that value. Succession issues, retirement, technology, globalism, scale, etc. are all viable reasons to be thinking about selling your business. But what is the best timing for this? The simple answer is NOW! The reasons for this are the time it takes to maximise value and the market environment that is at a peak for at least the immediately foreseeable future.

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