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EBITDA Adjustments From Crazytown

EBITDA Adjustments From Crazytown

By Brent Beshore, | January 28, 2016

At least once a week, we find ourselves looking through adjustments made to earnings before interest, taxes, depreciation and amortization (EBITDA) on a business for sale, and saying, “What in the world…?”

Adjustments can be perfectly acceptable. Owners run excess personal expenses through their business that would not be assumed by a future owner (i.e., fun trips, memberships). Sometimes, family members are paid far-above-average salaries and will not be continuing with the company. On justifiable adjustments, you’ll hear no contest from us. However, just because adjustments are justified, doesn’t mean they’ll leave a good impression on investors. We recently saw a business barely breaking even with a sizable adjustment for private air travel; such adjustments speak volumes about priorities.

Lately, we’ve started tracking some of the bogus adjustments people try to deduct out of companies. Here are some anecdotes illustrating how wishful thinking intersects with the bottom line.

Owner Compensation

The most common add-back is completely subtracting owner compensation, boosting the supposed bottom line by between $200,000 and more than $1 million. Yet, they are usually the leader(s) of the company.

Some owners work full-time, while others are serving in more of an advisory capacity, but unless they permanently reside in another state without any oversight of or contact with the business (including financial), they are doing something worth a dollar amount. That figure may not be the same amount they’ve been paying themselves, but it’s definitely not $0.

Leadership Compensation

A 150-person company had a leadership team of five people. All the leaders were paid quite well, based on below-market salaries and generous performance-based incentive compensation. The CIM argued that they were paid too well for the industry. So, each person’s salary was adjusted down to an industry average, reducing the overall leadership compensation pool by more than $600,000. When we inquired as to whether the current team would be staying post-transaction and under what conditions, the intermediary explained that the adjusted salaries were meant as a starting point and that each leader expected to renegotiate his/her total compensation with the new owner, including base salary, incentives, and equity.

Imagine walking into a company and saying to one of the key leaders, “Hi, we’re your new owners. We’ve heard you’re an essential leader within this company we need to work hard to keep, but we’re going to reduce your salary down to the industry average.” Would you stay? Why should a buyer account for less than anticipated compensation?

Sub-Contracted Labor Costs

A manufacturing company kept a lean full-time team, and used sub-contracted labor during seasonal periods, which is perfectly reasonable. What was not reasonable was the more than $200,000 adjustment for “excess costs of sub-contracting.”

A company can’t have it both ways. A bigger team means bigger year-round operational costs. A lean team means you take a hit when extra labor is required. Pick the operating style and own it.

Marketing Expenses

Hand holding mobile smart phone with success chart on screen. Isolated on white.

A particularly courageous CIM presented a list of adjustments that included more than $200,000 in marketing expenses. We immediately requested further explanation and were told that it was an ineffective online marketing campaign the company had run the previous year for a new product line introduction.

Ineffective spending is still real spending. Enough said.

“One-Time” Expenses

Adjustments related to one-time expenses are quite common. Two examples of creative implementation include the cost to develop a company’s website and inventory write-offs conducted every year.

There are occasional one-time expenses that should be adjusted out, but they are rare. We often find lots of recurring non-recurring expenses. More often, these expenses represent necessary costs of doing business above and beyond the line items that normally appear on a company’s annual income statement. The bottom line is that, regardless of whether it’s normal, if it’s a necessary cost of doing business, it shouldn’t be adjusted out.

Research & Development Expenses

Companies seeking to grow must engage in ongoing investment, including R&D. In one recent case, the revenue from a new product line was included, but the associated costs of developing that line were adjusted out.

New revenue streams aren’t delivered by stork. Sustainable businesses require ongoing investment, which a buyer will have to invest in as well.

Retroactive Change Benefit

Two recent CIMs added back projected savings from recent, or even yet-to-be-fully-implemented, changes in process or software retroactively to previous years.

You can’t change the past. The best way to present effective change improvement is to provide evidence of its actual impact and how it might look in the future.

Legal Fees

A company had an unfortunate two-year legal battle. The CIM adjusted out over $700,000 in legal fees related to the “one-time litigation event.”

If a company must enforce its position by legal action, or if its customers, suppliers, or competitors initiate suits against it, the company must spend real money. That won’t change with ownership, and evidence of a substantial legal history will tell a prospective buyer that such events must be accounted for in projections and valuation.

A productive question to ask in making EBITDA adjustments is whether a public company could deduct such expenses to boost earnings presented to shareholders. Can a CEO be adjusted out? Can a leadership team’s salaries be calculated as industry averages rather than what a company actually pays them? Can a website exist, be regularly updated, but not actually cost anything? No, unless you’re Enron.

Including EBITDA adjustments from Crazytown may help you feel like you’re presenting a better illustration of the company’s earnings potential for a prospective buyer, but it’s counterproductive. These types of adjustments create distrust with prospective buyers. And buyers are generous in estimates they must make independently. If you leave a gap, such as assuming there will be no acquisition costs in hiring competent leadership, the buyers will inevitably insert a big round figure into their formula to cover all unknowns.

The best advice on creating a list of adjustments? Be honest and conservative. The relationship with buyers will start out on a much warmer and productive path.


NAME: Brent Beshore
Brent Beshore is the founder/CEO of, a family of companies investing in family-owned companies throughout North America

Are You Following These 4 Digital Marketing Rules?

Are You Following These 4 Digital Marketing Rules?

By Dan Hammaker, Axial

It’s a new year, and with the swapping of calendars comes a great opportunity to evaluate how you’re being perceived online.

Like it or not, digital branding has never been more important to dealmaking. Here are a few easy digital marketing rules to help make your brand as attractive as it can be online:

1. Know Your AudienceGroup of People multi ethnic ID-10066197

According to the US Census Bureau, internet users skew towards being younger, wealthier, more urban, and better educated than the average American. Your digital brand, therefore, will need to be able to attract the attention of that cohort.

Users with higher education levels will comparison shop, so avoid hard and fast sales tactics to attract attention. Those actions will also cheapen your brand, and within an affluent crowd, price is less likely to be a primary buying factor. Instead, focus on customer service and building evangelists for your firm. Favorable client testimonials are nice to reference offline, but online, they’re crucial. You have no credibility on the internet without clients who can testify to the positive experience they’ve had working with you.

2. Give to Get

With competitors’ websites no more than a few clicks away, it can be hard to distinguish yourself in the eyes of a potential client you have no relationship with. Fortunately, the internet offers tools and a distribution channel you can use to build beginner-level relationships en masse.

A great way to start a new relationship online is by giving away something for free. It doesn’t have to be a physical product – instead, consider sharing a digital asset that costs nothing to reproduce. Whitepapers, webinars, and industry insights not only provide value to these potential clients, but also serve as great digital icebreakers to begin interactions between them and your brand. As visitors show more interest in your content, you’ll learn more about them, and all of a sudden you’ll be “getting to know each other.” From there, your conversation is more likely to advance and blossom into new business.

3. Interact Consistently

Inbound dealflow is a sign of a strong digital brand, but that doesn’t happen without outbound interaction to match. As with any relationship, the one you build between potential clients and your digital brand cannot be a one-way street. In order to draw people in, you need to be willing to put yourself out there.

Reaching out to people proactively can also be a great way to gather feedback on your other brand-building efforts. For instance, if you meet someone new at a conference, use LinkedIn or Axial search to learn more about that person, follow up, and reinforce your in-person conversation using digital collateral. Additionally, use posts in places like LinkedIn or Axial as opportunities to test and refine your message. Not only will you begin to better understand what your target clients want to hear from you, but, perhaps even more importantly, you’ll begin to understand what they don’t want to hear from you.

4. Show Personality

People don’t identify with firms — they identify with personalities. As a result, if your digital brand is going to successfully foster relationships, it’s going to need a personality of its own.

In the spirit of authenticity (another internet must-have), develop a personality that is consistent with your corporate mission and values. Avoid any attempts to pander or placate, however — they’ll be sniffed out and will ultimately backfire. Instead, look for issues and news that matter to you, develop a perspective on them, and find thoughtful, creative ways to share that perspective. What you’ll find is that you’ll begin to attract like-minded individuals that form bonds with your brand because they agree with it. Those kinds of bonds become galvanized by dissenters, helping you to carve out a niche of thought-leadership. The people that see things the way you do should cost less time and fewer resources to turn into clients.


NAME: Dan Hammaker            COMPANY: Axial
Dan Hammaker is a Product Marketing Manager at Axial, where he helps CEOs and executives of private companies understand their options for growing and maximizing the value of their businesses. Dan graduated from New York University’s Stern School of Business with a degree in Finance.

For further information, contact us Megabite Restaurant Brokers helps you value, sell, broker or buy restaurants, bars, nightclubs - restaurant valuations - restaurant appraisals

Megabite Restaurant Brokers, LLC
Phone: (817) 467-2161 

Search our buyers at SEARCH OUR BUYERS, email or call us to discuss your opportunity.  It may fit an active buyer’s search criteria.

5 Ways to Prepare Your Business for Sale

5 Ways to Prepare Your Business for Sale

By Cody Boyte Broker Buy sell FB Cover 11359711_m licensed 15-11-02

Often when you decide to sell your business, you’ll find that many aspects of the business are not ready for a sale. Whether it’s incomplete financial statements, disorganized tax history, or simply miscommunication, the sale process can quickly become complicated and difficult. While it’s possible to prepare your business for sale rather quickly, these band-aid fixes will not be overlooked by diligent buyers.

The lack of planning unfortunately leads to lower sale prices and money being left on the table. Ryan Guthrie, Director of the Private Equity Practice, BDO USA, said, “The majority of business owners who sell their business don’t plan ahead in preparation of a sale. In most cases, a lot of things that could have increased the value of the business and decreased the risk for buyers were not done.”

So what can be done to prepare for an exit with an uncertain time horizon?


The most essential step that a founder can take to prepare the business for sale is to build out a full management team that can run the business without you. While it takes significant time and attention to prepare a competent management team, it’s one of the most necessary ingredients for a profitable exit. With a strong management team, interested buyers can feel confident that the business will be prepared for most transitions, including the departure of a CEO. If a buyer doubts the ability of the company to run in the absence of the founder, it can prove an insurmountable deterrent.

These concerns are not limited to owners near retirement age either. Young owners have little incentive to remain involved once the business has been sold. Scott Humphrey, Executive Managing Director and Head of U.S. Mergers & Acquisitions of BMO Capital Markets, said, “In the case of an exiting owner, the buyer needs to come in and not only get comfortable with the business, but ensure the business will continue to grow without the owner. This increases risk greatly.”


Larger middle-market companies often prepare for a sale by bolstering management, but far fewer companies take the initiative to develop a strong set of middle management talent. Expanding the management capabilities beyond the executive level reassures buyers and ensures a seamless post-sale transition. Many buyers of businesses are looking for well-run companies that have fairly independent and strong business units that will transition nicely after the sale.


While a common best practice is to prepare an audited set of financial statements two years before a sale, there are also financial preparations that can take place much earlier that will help ready a business for an exit. Foremost among them is the process of separating out the company’s real estate holdings from the rest of the business.  Robert Snape, managing director at BDO Capital Advisors, said “we’ve often seen owners carve out the real estate from the business and sell the business to one party and sell the real estate to a separate buyer.” However, if an exit is a possibility in the next five years, Guthrie at BDO advises against making dramatic changes like relocating a factory or any other business change that would appear to disrupt a growth trend. If the real estate is held separately from the business, often you can sell the business and then lease the factory or warehouse back to the business owner to retain some of the earnings even after you exit the company.


When there is a long-term horizon of sale, it is also beneficial to look at ways to add to the sustainability of earnings. Buyers want to see customer diversification and reduce the risk of losing key customers that would depart with the founder, especially if those customers make up a significant portion of the revenue. Data from Axial shows that the average amount of interest in purchasing a business is lower whenever there is significant concentration in a few larger accounts.


It is important to examine the corporate structure of the company. There are important tax consequences that come with selling C-Corp and S-Corp businesses. Guthrie advises company owners to keep the end in mind and to determine what the optimal corporate form would be for the business. “There’s not a lot you can do a year before the sale,” he warns. “But there’s a whole lot more you can do 10 years before the sale.” Checking with your accountant to ensure everything is set up correctly for a potential sale can have an effect on the final valuation of your business.

It is more crucial than ever for owners to plan ahead to maximize the enterprise value of their company. If the past several years have provided any lesson to sellers, it is that company valuations are at the mercy of the marketplace and business owners will want to be ready to take advantage of market timing.


  • NAME: Cody Boyte

Cody is a contributing writer for Axial Forum

For further information, contact us Megabite Restaurant Brokers helps you value, sell, broker or buy restaurants, bars, nightclubs - restaurant valuations - restaurant appraisals

Megabite Restaurant Brokers, LLC
Phone: (817) 467-2161 

Search our buyers at SEARCH OUR BUYERS, email or call us to discuss your opportunity.  It may fit an active buyer’s search criteria.

11 Stages of Selling a Company

11 Stages of Selling a Company

By Cody Boyte sold

Selling a company is a long and complex process. Preparing for a sales process takes at least 12 months, and then the actual process itself can take another 12 months. If you think of selling your business as something similar to a very long multi-year enterprise sales cycle, you’ll begin to realize that a business sales process is like any other sale process in that it can be broken down into its core component stages and elements.

This article provides an overview of the key stages of an M&A sale process, whether it’s for a lower middle market company, a large public company, or anything in between.


When considering the sale of a business, there are potentially a wide variety of transaction options. These options must be understood and evaluated by the CEO, owner, and/or board. Understanding these options and the decisions they lead are the most strategic decisions a company will ever make when it comes to realizing value. Leveraged buyout, strategic M&A sale, minority recapitalization, ESOP, etc — these are all fancy investment banker terms but they essentially boil down to various methods by which a company sells itself or part of itself or to whom it sells. Buyers break down at a high level into two categories: financial buyers and strategic buyers. They both have their pros and cons. Neither one is better by nature, it’s highly situational. A good M&A banker will work with the business owner to understand the selling requirements, the range of valuation expectations, and strategic goals. This also includes defining: exit strategy alternatives; thinking through the most appropriate types of acquirers; timing of sale; tax consequences and owner’s desire for future involvement with the company (or lack thereof).


Determining a reasonable valuation range is a critical step in the process. If the banker thinks they can achieve a valuation range that isn’t acceptable to the owner, the process should stop right there. Too many deals get derailed by sellers and buyers having completely different expectations about business value. While it’s the job of the banker to close that gap with negotiation prowess and transactional expertise, immense gaps can’t be bridged no matter how skilled you are. Valuation technique ranges from the highly academic and analytical methods of discounted cash flow and dividend discount models (DCF and DDM) to the more pragmatic comparable company valuation methodologies. Unfortunately, none of them is a replacement for the actual process of engaging with high quality and highly relevant buyers. Analysis and number-crunching is necessary but not sufficient, and will only take you so far. In the end, the price is determined in the market by the buyers and the quality of your engagement with them.


Often, Advisory firms will review a company’s strategic and financial condition and have suggestions for how the company, over a 6-12 month period, can make some changes to make it more desirable. These should not be massive changes in strategy because those take too long and are risky, but should be valuable changes to management team or business strategy that make the business more attractive in a reasonably short period. Sometimes a trigger-happy CEO just wants to sell the company, but the best thing to do is make some changes and adjustments first before going to market. Again, working with a knowledgeable banker or informed board members that have relevant industry experience and business strategy context can be very valuable.


Spending the time to properly aggregate, interpret, and present a company’s financial and business history and future projections is a crucial element of the sale process. This requires trust between a business owner and his M&A Advisor because at this point, the kimono is being opened. The engagement letter should reflect the confidentiality that an investment bank commits to before they have access to such sensitive information. Business owners typically prepare their financial statements for tax purposes, not for business sale purposes. Using tax statements for business sale presentation is a major mistake, as it usually obscures the earnings capability of a business. Taking the time properly present a company’s earnings power can have a big impact on how the buyers view the opportunity. Of course, the seller can go too far here and lose credibility, which is also a big mistake in the other direction. However, making sure that the appropriate financial adjustments are made is an important step and takes time and analysis by the CPA and the M&A team.


When potential acquirers evaluate a company, they expect the records and facts to be properly organized and documented. Disorganized or poorly collated material on a business delays the process, looks sloppy, and therefore hurts the seller tremendously. It’s another area where many sellers are pennywise and pound-foolish and pay a terrible price for trying to save money in the wrong place. Well-packaged and presented business summaries increase a buyer’s confidence and comfort level and increase the likelihood of a successful sale. A business owner spends years establishing name recognition, market niche, vendor relationships, operation & production systems, management, personnel, distribution channels, customer loyalty and numerous other intangibles. This is a story that needs to be properly told to educate potential buyers.


While large multi-billion dollar companies often have only a handful of relevant and sufficiently capitalized potential acquirers, lower middle market companies (this generally refers to businesses whose value ranges generally between $10M and $250M) often have an enormous number of potential buyers. Some of these potential buyers are known to the business owner, some might be known by the Advisor, but no one’s rolodex is usually broad enough to know every potential buyer. This means that the banker and the business owner must have tools and resources to research and access the largest and most qualified data set of relevant buyers. Databases and tools of varying qualities exist out there, but there is no silver bullet. This research process should be exhaustive, not rushed. The banker should review competitors, customers, strategic buyers, private equity firms with relevant expertise, and other sources of highly suitable capital and partnership. This is one of the most time-intensive elements of the process but it often determines the overall success of the sale process. If you don’t approach the best buyers, how can you get the best outcome?


Many potential buyers that express interest in a business will not be qualified to purchase the company. These companies are referred to as tire-kickers. A good banker will know the right questions and have enough market intelligence and expertise to smoke these buyers out and pre-qualify the right potential acquirers before the tire-kickers impact the CEO or management team’s time and attention. This isn’t a particularly complex or time-intensive step, but if it isn’t done, the CEO will waste a lot of time and effort speaking with unqualified buyers and increasing the confidentiality risk of the entire process.


There are many schools of thought on how to run the negotiation and buyer engagement process. Some Advisory firms suggest a negotiated process with only one highly targeted buyer. This strategy has tremendously high risk but can be extremely expedient if it works out. In general, Sellers are more likely to achieve a stronger outcome when negotiating with multiple qualified buyers, rather than just one or a handful. This can of course be taken too far as well, where every buyer feels like they are part of a huge auction process, in which case they walk away for fear of over-paying. Competition in a sale process does typically drive up purchase price and quicken the pace and accountability of buyers, but it should be handled carefully, respectfully and professionally.


The sale of a business has many financial and professional considerations for the management team / owner. The purchase price is only one component of the overall result. Other decisions and considerations include: stock sale versus asset sale; earnout; terms and interest rate on financing; liabilities assumed by the acquirer; employment contracts; non-compete agreements; current assets retained by the seller; stock ownership and equity options packages; relocation; employee preservation versus redundancy layoffs, etc.


Typically, buyers express interest in a company at three stages through three documents: the IOI, LOI and Purchase Agreement. The IOI is non-binding and provides the proposed terms, valuation and structure for a transaction. The owner will review this with their banker and make a determination as to whether or not to invite the buyer to learn more about the company and become more serious. LOIs (letters of intent) are a more serious signal of interest by the buyer; once they are jointly executed, the seller is typically under exclusivity with that buyer, such that they are not able to meet with other buyers during a stated period of time. Meanwhile, that buyer is beginning to conduct heavy due diligence on the business with the intent of acquiring it. During the exclusivity period, the buyer must move quickly to determine if they want to proceed. If so, the purchase agreement must be drafted to define all the details of the transaction: legal, financial, representations, warranties, etc. The purchase agreement is the definitive document outlining the terms of the sale.


The transition period typically involves a period of cooperation during which time the seller will assist the acquirer in transition. There are instances in which the seller is specifically not interested in doing this, however a lack of willingness to ease the transition typically lead to a lower valuation and in plenty of cases can derail the deal process entirely. Sellers should proceed with extreme caution if they elect to have no post-closing commitment. Post-closing commitments often include transferring customer relationships, explaining key management or market dynamics, and other proprietary information and trade secrets needed to operate the business optimally.


  • NAME: Cody Boyte

Cody is a contributing writer for Axial Forum

For further information, contact us Megabite Restaurant Brokers helps you value, sell, broker or buy restaurants, bars, nightclubs - restaurant valuations - restaurant appraisals

Megabite Restaurant Brokers, LLC
Phone: (817) 467-2161 

Search our buyers at SEARCH OUR BUYERS, email or call us to discuss your opportunity.  It may fit an active buyer’s search criteria.

How to Host a Business Lunch Like a Boss

How to Host a Business Lunch Like a Boss

By Peter Nguyen, Axial | November 19, 2015

Part of every deal professional’s job is networking. But w1Stock red wine toastinghat do you do if you’re new-ish to the gig and tasked with hosting a business lunch or dinner with a group of clients or partners? Don’t worry — even if your normal fare is burger and beers at the pub, I’ll show you exactly how to orchestrate a seamless affair and set the stage for a productive business relationship down the road.

It’s all about the halo effect. People are attracted to people who are confident and self-assured.  Your guests’ perception of you as a host will in turn impact their impression of you as a person, in addition to that of your firm and colleagues.

I’ll break up the do’s and don’ts before the reservation, during the meal, and post dining.

Before the Reservation

Do find out if anyone in the party has any dietary restrictions. If someone’s a vegan, you don’t need to go to a vegan restaurant; just make sure there are options for them available. People with stricter dietary restrictions understand the difficulty that comes with dining out. If they don’t, it’s about time they learn the world doesn’t revolve around their dietary restrictions (unless of course they’re the person you’re trying to woo… then by all means, go to a vegan restaurant and eat that silken tofu with a grin on your face).

Do your research if you plan on ordering wine. Take a look at the wine menu beforehand so you’re not looking at a 60+ page list at The Lambs Club and talking with a sommelier for 20 minutes about the vintage of a specific Sauvignon Blanc. If the idea of initiating a conversation about wine in front of business contacts terrifies you, try calling in beforehand and ask what they recommend would go best with their main dishes.

Do take it upon yourself to orchestrate introductions. Shake hands with everyone and introduce individuals who haven’t met yet. Bonus points if you can bring up shared interests or business contacts to spur conversation.

During the Meal


The Bite

Do close your menu when you’re ready to order. Make an effort to go first, even if it requires being assertive. As the host, you set the tone of the meal. If you order a drink, an appetizer, and an entree, for example, that gives everyone else at the table implicit permission to do the same.

Don’t order messy dishes. While I love lobster-in-shell as much as the next guy, save it for dinner with your mom or ex-girlfriend. Don’t order anything that requires you to shift your attention from your guests to your plate, and beware of potential food-related mishaps. It’s not a pretty look when a bolognese is flying off the end of your pasta and onto your client’s $1000 suit.

Don’t order unfamiliar foods. Save your personal exploration of sea urchin innards for a later date. This mitigates any unforeseen gastrointestinal problems or unattractive muscle spasms in your face.


The Booze

Do your research if wine is going to be a component of the meal. Otherwise tell everyone explicitly to feel free to order whatever they’d like off the drinks menu. If one of your guest’s shows an inclination or particular interest in the wine list, by all means defer to their expertise.

Do request to see the somm if you’re feeling over your head. If you don’t want them to suggest the ‘98 Chateau Lafite, point to the price of a bottle on the list in your price range and ask them to suggest a similar bottle. A good sommelier will understand what you’re getting at.

Do familiarize yourself with how wines are presented at the table. If you order the wine, you will be the designated taster. The server will bring out the bottle and confirm with you it’s what you requested. The server will then pour a small amount of wine in your glass. Lift the glass by the stem, give it a swirl, nose it, and take a sip. If you dig it, a simple “this is fine” will suffice.

If the wine is tainted or corked, hand it to the waiter or the sommelier for their opinion and order a different wine. I follow this guideline when it comes to sending back wines: If I request a bottle and I don’t like it, I suck it up. If a somm specifically recommends a bottle and I don’t like it, I send it back.

If further on in the night, you’ve found you’ve had enough to drink and the waiter moves towards refilling your glass, momentarily hold a few fingers over the top of the wine glass.

Don’t over-order on alcohol. Non-alcoholic beverages are also perfectly acceptable, especially if you have a tendency to overshare.


Do guide the conversation and make everyone feel comfortable. There’s enough we share in the human experience that we can avoid stepping on landmines for 90 minutes. Religion, sex, and politics are always good topics to steer clear of.

Do put the electronics away, and if you must take a call, step away. It may seem like a suitable solution, but leaving your phone face-down on the table isn’t good practice either.

Do listen to everyone at the table. If you don’t have the social graces to hold a conversation, pause before answering. It makes people think you’re being more thoughtful in your response and speaking with more intent… and subconsciously cues them to talk more.


Do pay the bill. Obviously. Request the check discreetly when dinner is winding down. Bonus points if you can discretely slip the server your card before the end of the meal to take care of everything.

Do make a mental note of the table. Did everyone seem to enjoy their drinks and food? Is this a place you would take them again, or take future clients and partners? How was the service?

Congratulations — you’ll now be able to give Emily Post and Martha Stewart a run for their money.


NAME: Peter Nguyen
Peter is the marketing operation & strategy manager at Axial. Prior to Axial, he was an email marketing specialist at Gilt Groupe on their lifestyle vertical promoting restaurants, spas, fitness, and entertainment. He earned a B.S. in Science from Oregon State University.

For further information, contact us Megabite Restaurant Brokers helps you value, sell, broker or buy restaurants, bars, nightclubs - restaurant valuations - restaurant appraisals

Megabite Restaurant Brokers, LLC
Phone: (817) 467-2161 

Search our buyers at SEARCH OUR BUYERS, email or call us to discuss your opportunity.  It may fit an active buyer’s search criteria.

How to Implement Digital Marketing Strategies That Work

How to Implement Digital Marketing Strategies That Work

By Karen Sibayan | November 10, 2015Megabite Restaurant Brokers helps you value, sell, broker or buy restaurants, bars, nightclubs - restaurant valuations - restaurant appraisals

Digital marketing is an increasingly important tool in cultivating business relationships. Capital providers and investment banks today are using different digital tools to manage both existing and prospective contacts.

At Axial Concord 2015, panelists discussed the advantages and challenges of using digital media as a way to stay in front of their constituents, make new connections, and increase deal flow.

They provided a few techniques on how to use digital media efficiently and avoid the pitfalls of blasting out irrelevant messages to one’s audience.

A Tailored Approach

Competition for attention in today’s atmosphere is increasingly fierce. This is particularly true for “private equity sponsors, who may have a tough time differentiating themselves,” says Eric Mattson, principal at Excellere, a lower middle market private equity fund. “We all have capital and it’s all the same color, so it’s important to be able to communicate other points of distinction.”

One way to be a more effective digital marketer is to target messages to a specific audience. Valerio Forte, head of business development at global private equity investment firm H.I.G. Capital, says that they are devising ways to reach out to smaller firms. “We understand there’s a certain number of companies who may not travel as much to conferences,” he says. “We are trying to tailor an outreach to these smaller organizations so they are aware of what H.I.G. is doing and where we can work together.”

Don’t Be Passive

Being proactive is necessary to avoid roadblocks in a company’s digital efforts, including becoming irrelevant to a firm’s constituencies. Being thoughtful about outreach — rather than blasting random messages to an entire subscriber base — helps to keep audiences engaged.

“We put a lot of thought into what we communicate to each particular audience,” says Mattson. “For example, if we’re sending a message about our interest in investing in clinician services, we target M&A advisors in the healthcare space. If we just blasted everyone in our database, the non-healthcare advisors may not pay attention to our next message, which could be non-healthcare related. We certainly don’t want our messages being ignored.”

Using undifferentiated techniques is much less likely to get the point across to the desired targets. “A passive banner ad that appears on a website is not likely to drive the right type of deal flow — it might even be more of a distraction,” says Joe Burkhart, a managing director at debt fund Saratoga Investment Corp., which targets deal sizes that are between $5 million and $25 million. “What you want is to focus on the relationships that actually matter instead of relying on the likelihood of a referral from a banner ad. The sales and marketing approach should be very targeted.”

Content Marketing

Generic digital messages are not the answer. Neither is relying on outside sources for material as effective in developing relationships for one’s business. “I think content Megabite Restaurant Brokers helps you value, sell, broker or buy restaurants, bars, nightclubs - restaurant valuations - restaurant appraisalsmarketing can be a very powerful tool to establish brand and expertise,” Burkhart says. “If I write an article like the one I did recently on Axial Forum, about the technology and software I use every day — that content is hopefully helping others and our brand is recognized and associated with that assistance.”

Most people don’t generate their own social media content, says Burkhart. Being one of the few to do so “helps in building a personal brand.” Achieving recognition on a company level requires additional time and resources. “Companies have to commit to producing their own content on a recurring basis, or else it’s a waste because the consumers of media demand consistency.”

Identifying your audience is a good first step. If you have multiple audiences, decide whether you want to create separate channels for each one or focus on one primary group.

“Our digital strategy leverages our industry thesis approach,” says Mattson. “So the most important thing that we do is to provide drilled-down information about who we are as quickly and clearly as we can, especially in an environment where attention spans are short.”

Next, establish your target channels — you might focus on creating a blog, sending out a monthly newsletter, or building out your firm’s presence on LinkedIn.

Finally, establish a regular cadence for posting new content. If possible, task someone on your team with managing the content marketing function. Even if everyone in the company contributes, having one person responsible for execution will add a layer of accountability that will lead to better results.

Audiences today are inundated with information from a range of sources. “I receive more than 20 eblast messages a day — mostly in the form of newsletters — from competitors, capital and other services providers, and intermediaries. Unless they instantly catch my attention with a relevant topic, they go unread,” Mattson says. “That is a cautionary, but real-world cue for companies to be thoughtful about their digital strategy.”


  • NAME: Karen Sibayan

Karen Sibayan is a New York City-based journalist and communication specialist. Karen writes on a variety of finance subjects including M&A, private equity, leveraged finance, and other forms of company financing. Her twitter handle is @trackingfinance.

Five mistakes that could make it impossible for you to sell your business

Five mistakes that could make it impossible for you to sell your business

BY: JACOLINE LOEWENBroker Buy sell FB Cover 11359711_m licensed 15-11-02

Special to The Globe and Mail

Growing a business into a going concern can take years. Yet the strategies, relationships and the legal contracts that were critical to developing the business can turn into skeletons in the closet when it comes time to sell.The gap in differing views between buyers and sellers is interesting. Yes, there is the sale price and value an owner thinks the company is worth, and there is the final sale price. There are also features that sellers think are a priority during the sale process, but buyers don’t. Sellers think their product or services are the highlight of the business overview, for example, yet it is the legal areas that are often the first area to be explored by the buyer’s team at the start of the due diligence process.Each company is a unique situation. However, owners can gain a general understanding of the critical legal issues that will, at the least, lower the selling price or, worst of all, cripple and end the sale of a business:

1. Fuzzy ownership of intellectual properties can be a sinkhole. IP legal contracts apply to the work created by internal employees, but don’t forget to include the external and independent consultants’ work. Jim Balsillie spoke recently at the Empire Club in Toronto with Jacquie McNish and Sean Silcoff, two Globe and Mail journalists who wrote about the fall of BlackBerry (formally RIM) in Losing the Signal. Balsillie’s big takeaway is that the failure to secure intellectual property will be the critical downfall to a Canadian company’s value, and he shared how much it hurt Blackberry behind the scenes as well as publicly.

2. A lack of shareholder agreements with minority owners that permit majority shareholders to force a sale will be an issue. Often, the minority shareholders could prevent a sale and this will take up time and resources to resolve.

3. Share issuance to outsiders – such as former employees and advisers who are no longer on the scene and difficult to contact – will make the buyer concerned that they will not be able to buy the whole company. For startup technology firms in particular, it pays to have contracts to advisers and early employees done by lawyers who know the issues that can occur years into the future. Employees can be forced to sell shares upon leaving the company.

4. Former employees bearing a grudge may see the sale as the time to make their case public. Also, with online forums that encourage people to “Rate my Employer” former employees can make all sorts of claims. One company that placed advertising globally had just one bad comment on an online rating forum, questioning if the business was running a scam. This went unaddressed but was picked up during a simple Google search, raising just enough of a red flag and the buyer walked.

5. Real estate assets being mixed in with the holding company. When it comes time to sell the business, perhaps the real estate is not to be part of the sale. Instead, a common strategy is to keep ownership of the real estate. Sometimes the new owner might even lease the real estate, but a lack of separation of the real estate from the holding company will make this difficult to do.

Facing up to these five legal challenges will keep the buyer happy and interested in closing the deal. The seller will be confident that the ownership is clearly defined and the control of the company can be handed over to the buyers properly. Early identification of these issues will mitigate their impact and give the opportunity to improve the sale process. Long standing exit preparation such as these five legal points will make the owner look professional and the sale price not so high after all.