InTents August/September 2023 - 21

Zwierzchowski. He suggests disposing
or selling non-core assets or those
no longer contributing to revenues/
profitability (like the tent that hasn't
been rented in years because it needs
repairs and so on, he says) to make the
transition easier for a potential buyer.
Another is the facility's presentation.
" Just like when selling a home, you
would clean up your house, cut the
grass, organize the clutter, it's the same
when selling a business, " he explains.
" Organizing the warehouse, painting the
chipped wall-general cleanup is very
important so that the potential buyer
doesn't have to see through the clutter but
can focus on the positives of the business. "
DURING AND AFTER
Even though retirement is the objective,
it might not happen immediately. Owners
may need to decide how long they want
to remain in the business after its sale,
exploring their interest in any post-sale
employment or consulting. This could
also become a condition for the sale.
" Most owners are very interested
in making sure their business is a
success after they leave and will do
what it takes to make this happen, "
says Zwierzchowski. " In addition, most
buyers, along with financing sources, like
to see owners involved in some sort of
transition plan. The factors that dictate
the length of time requested include the
Tents For Rent created this sophisticated,
inventive decor, showcasing it all underneath
an elegant tent. This event was for
a formal fundraiser held by a very large
hospital in Eastern Pa. Photo courtesy of
Tents For Rent LLC.
ASSESSING VALUE
A
lthough the process around selling a business
can vary depending on the entities involved,
the approach Kevin Zwierzchowski, owner of Z Rental
Consulting (ZRC) in Novi, Mich., takes provides an
idea of what sellers might, or should, expect.
" The initial conversations and meetings with
owners are built around learning and understanding
the business and the current state of operations,
understanding the owner's goals for a potential
transaction and agreeing upon an anticipated value for
the business, " he explains, adding that when assessing
valuation, they look at 10 factors. Some of these are:
The revenue base
" Different levels of revenue drive different expected
values and also different buyers, thus affecting value, "
says Zwierzchowski.
For example, businesses with revenue below $3 million
tend to attract entrepreneurs and strategic buyers but
aren't likely to appeal to a financial buyer, he says. But
smaller buyers like family offices, as well as entrepreneurs
and strategic buyers, may bite on businesses that have
revenues of $3-to-$5 million. Businesses with more than
$10 million in revenue will get the attention of strategic and
financial buyers.
Asset base
ZRC collects information on the entirety of the rental assets,
including the make, model and age of rental fleet and the
original equipment cost (OEC). The return on investment
generated for the previous three years is also examined and
compared to industry standards and equipment mix.
The company also explores strategic, niche, geographic
and infrastructure factors along with looking at industry
multiple comparisons and performing a buyer return analysis.
Once understanding and agreement has been reached on all
the factors, the sales process can begin, says Zwierzchowski.
InTentsMag.com 21
Profitability
" We like to compare profitability (adjusted earnings before
interest, taxes, depreciation and amortization or EBITDA), both
dollars and percentages, to other clients we have worked
with along with industry standards, " Zwierzchowski explains.
Financial performance trending
Potential buyers want to see revenues and profitability
trending up, with any dips explained; for example,
because of COVID. Zwierzchowski says they also look at
trending for the current year-why he advises sellers to
stay focused on running the business while undergoing
the sales process.
http://www.InTentsMag.com

InTents August/September 2023

Table of Contents for the Digital Edition of InTents August/September 2023

InTents August/September 2023 - Cover1
InTents August/September 2023 - Cover2
InTents August/September 2023 - 1
InTents August/September 2023 - 2
InTents August/September 2023 - 3
InTents August/September 2023 - 4
InTents August/September 2023 - 5
InTents August/September 2023 - 6
InTents August/September 2023 - 7
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InTents August/September 2023 - 9
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InTents August/September 2023 - Cover3
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