When your client is looking to exit their business, often it’s because cash flow is negative, debt-service has become unsupportable, or the company has turned upside down. The problem you face now is that your client may display a natural tendency to overvalue the business and its assets.
At Second Wind, we work with the IBBA (International Business Brokers Association), and we know that approximately 75% of all proposals brought to business brokers are discarded. The fact is, by the time many owners want to exit, the business is untransactable. In the event of forced liquidation, the liquidation value of the enterprise will not make the owner whole, leaving them personally insolvent in the face of personal guarantees to secured creditors.
An Alliance with Second Wind offers a better way. Through reorganization of the business— centered around a strategic short sale of the business assets while maintaining the continuity of operations—the value of the entity is preserved rather than destroyed. When the core operation is preserved, all options remain open, including the possibility of re-entry into the business in the future.