In this episode of the Thoughtful Entrepreneur, your host Josh Elledge speaks to the Managing Director of
Blue Sky Exit Planning,
Joseph Gitto.
Joe focuses on the lower middle market, which includes companies with revenue ranging from 5 to 25 million dollars. This market is often overlooked when it comes to exit planning, and Joe's mission is to bring the level of expertise and resources available to larger companies to these smaller businesses.
Exiting a business is not just a financial decision; it's an emotional one too. Joe shared his experience selling his healthcare business and how the buyers initially wanted him and his wife to stay involved, but eventually, they all realized it was best to have a clean break. He acknowledges that letting go of a business can be emotional, as owners worry about how their employees will be treated and what changes will be made
When valuing a company for a reasonable exit price, Joe mentions that there is no one-size-fits-all approach. While some may use a multiple of four as a rule of thumb, every business differs. Factors such as the industry, technology, and team can significantly influence the valuation.
Joe also shared insights into the process of preparing for due diligence. The potential buyers can be strategic, financial, or internal, and the preparation starts by putting together the necessary materials and working with corporate counsel. Depending on the industry, Joe either takes the company to market himself or partners with investment banking strategic partners.
Key Points from the Episode:
- Focus on the underserved lower middle market in exit planning
- Goal to bring expertise and resources to smaller businesses
- Typical clients are blue-collar business owners in the lower middle market
- Importance of maximizing business value and considering personal financial and estate planning
- Valuing a company for a good exit price is not one-size-fits-all
- Examples of transitioning ownership and the importance of clear plans and structures
- Psychological and emotional aspects of exiting a business
- What business owners typically do after exiting their businesses
- Potential buyers and the process of preparing for due diligence
- Factors influencing multiples and typical range
About Joseph Gitto:
Joseph Gitto is a distinguished senior Finance, Sales, and Operational Executive, Entrepreneur, Coach, and Thought Leader, with over 25 years of remarkable achievements across various industries. As a five-time entrepreneur, he possesses invaluable expertise in assisting clients with capital acquisition, strategic planning, financial controls, and reporting. 2017 Joseph founded Blue Sky Exit Planning, providing comprehensive exit planning solutions to business owners, their families, and their professional teams.
He also serves as a Board Member of the East Coast Estate Planning Council, showcasing his commitment to the field. Notably, in 2023, Joseph's expertise was recognized, and he was appointed as a Board Member and Chairman of the Audit Committee for iCoreConnect Inc. (ICCT), a leading cloud-based software and technology company. His diverse background and leadership roles make Joseph Gitto a prominent figure in business, offering valuable insights and guidance to companies and entrepreneurs alike.
About Blue Sky Exit Planning:
Blue Sky Exit Planning offers a comprehensive "4 Phase Process" designed to address business owners' common challenges when preparing an Exit Plan. Many owners must avoid this crucial step due to uncertainties about the process and concerns over costs and time commitments.
The Blue Sky Exit Planning process provides a clear path to maximize the value of a business during a partial or complete exit. This plan encompasses essential business, personal, financial, legal, and tax considerations in selling part or all of a privately owned company.
By completing this process, business owners are better equipped to handle unplanned events, increase the overall value of their businesses, and secure financial stability for themselves and their families. With expert guidance and a structured approach, Blue Sky Exit Planning empowers business owners to navigate the complexities of exit planning and make informed decisions for their future.
Tweetable Moments:
05:51 - "It's never for the money they got, it's because they're bored or they lost their identity."
12:11 - "It is really an emotional tug, a lot of times the business part is the easier part."
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Links Mentioned in this Episode:
Want to learn more? Check out Blue Sky Exit Planning website at
https://blueskyexitplanning.com/
Check out Blue Sky Exit Planning on LinkedIn at
https://www.linkedin.com/company/blue-sky-exit-planning-cfo-services/
Check out Blue Sky Exit Planning on Facebook at
https://www.facebook.com/exitplanningservices
Check out Joseph Gitto on LinkedIn at
https://www.linkedin.com/in/josephgitto/
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