Michael Meyer, partner at the Benjamin Ross Group and President of the Pennsylvania Business Brokers Association (PBBA), hosted a virtual industry meeting with PBBA members, along with leading Small Business Administration (SBA) lenders. The PBBA is an association of Business Brokers and M&A Intermediaries whose goal is to promote the growth and professionalism of the business brokerage community.
Some highlights and conclusions of the meeting are as follows:
How Cybersecurity Issues Could Impact the Salability and Business Value
Cybersecurity issues are only getting worse due to a recent surge in ransomware attacks. The volume of security incidents has soared in recent years. Over half of business owners say they have encountered a cybersecurity issue that has affected their business in some way. Whether a seller suffers a breach years before a deal or during the transaction, the consequences can influence the value of the business. As Business Brokers, we should certainly ask the tough questions upfront.
First and foremost, sellers should disclose any previous or ongoing cyber incidents. In addition to being viewed as honest and transparent, you can prove that such incidents have been adequately handled in the past and that you have systems in place to appropriately address them in the future. “I think you’ll find that too few businesses have the proper infrastructure and processes in place to deter and respond to cyber incidents.
So, discuss with your client whether they have taken steps to implement specific cybersecurity measures, including making sure they have the appropriate and up-to-date antivirus software, and whether their insurance policy protects them in case of a cybersecurity issue,” Meyer said.
SBA lenders expressed they are still aggressively lending for business acquisitions and operating on all cylinders, helping small business clients acquire businesses and ramp up operations with Small Business Administration (SBA) loans.
Due Diligence in the Pandemic World
Meyer stated, “In addition to all the normal items we look at and consider when we do our own due diligence before representing a business, what additional items should we consider in a pandemic world, and what are buyers top concerns?” The top items of discussion were the following:
- Taking a closer look at the financials to determine whether the business has been affected by the pandemic, either positively or negatively.
- What is the status of the company’s workforce? For example, what portion of employees have been physically present, and what portion have been working remotely?
- What portion of employees, if any, have been terminated?
- Operations: Is remote business affecting workflow, or creating any issues? Has the business (from a business, operational, and technological standpoint) been able to support remote working environments for some or all of its employees? If so, what has been the impact of doing so (including the impact on interaction with customers and suppliers, internal and external collaboration, and other factors)?
- Supply Chain Management: Several businesses (and consumers) have already been impacted by supply chain disruptions. However, the degree of disruption can vary considerably. Meyer said, “We should understand the business’s level of dependence on particular suppliers, the availability of alternatives, existing and projected inventory levels and forecasts.”
- Michael Meyer stated, “During the pandemic, I’ve seen so many businesses make the necessary adjustments, create ways to get their products and services to their customers and clients, or produce new products created out of demand because of the pandemic. Entrepreneurs are very resilient people, and their human spirit remains strong. I am confident our nation’s 30 million small businesses, which employ nearly half the private-sector workforce and create two-thirds of all new jobs, will continue to drive our economy to the prosperity America has enjoyed.”
Knowledge is Power
Meyer concluded the meeting with, “You’ve all heard the saying, that, Knowledge is Power. Typically, in these meetings, we have a collaboration of Business Brokers, Intermediaries, Lenders, Attorneys, Accountants, and other professionals. As Business Brokers and M&A Professionals, most business owners constantly seek our knowledge and counsel and guidance, on everything from operational enhancements, to financing and growth strategies, and they also ask for our referrals to other trusted professionals that can help them during the sale process. So, they look to us to point them in the right direction for tax advice, legal advice, and other insights. And sometimes they just need a psychological-emotional boost. Leadership comes with responsibility, and that’s why a continuous commitment to stretching our knowledge, skills, and our connections is so important. We don’t need to have all the answers all the time, because the insight, the person, or the product we need it’s just an outreach away. And that’s why we have these meetings.”
About Benjamin Ross Group:
Benjamin Ross Group represents business owners who want to sell their businesses and leave their employees and customers in capable hands. We support our clients through the biggest business decision of their lives, so they can move on with confidence, peace of mind, and the most competitive price for their hard work. We sell 95% of the businesses we represent, compared to the national average of 20%. And we earn our clients’ trust because of our expertise, professionalism, and extensive network. For more information, visit our website at www.BenjaminRossGroup.com
The Pennsylvania Business Brokers Association (PBBA) is an association of Business Brokers and M&A intermediaries whose goal is to promote the growth and professionalism of the business brokerage community. If you would like further information on joining the PBBA, please click here: Join PBBA