Introduction by Nick Anderson, CEO of OneAccord

At OneAccord, we work alongside business owners every day who are navigating uncertainty while thinking strategically about their future—whether that means preparing for a business valuation, creating a business succession plan, or building toward a successful exit. As volatility in the economy continues to impact private businesses, questions around the right time and approach to selling a business are becoming more urgent.

That’s why I reached out to my colleague and longtime OneAccord partner, John Martinka, for his perspective on today’s market. With decades of experience in business exit strategy, mergers and acquisitions, and succession planning, John is a trusted advisor to owners preparing to transition their companies. He leads Martinka Consulting and Nokomis Advisory, and hosts the Getting the Deal Done podcast. 

His advice below offers a timely lens for owners preparing to exit with confidence—even in uncertain times.

It’s spring 2025 and does anybody really know what’s going on?

Consider the following business turmoil’s if you will:

• Tariffs – threats, on, off, on, off, changing amounts, exclusions, and more.
• DOGE – mass layoffs (including operators of nuclear facilities), rehiring, court orders about constitutional violations.
• Violent stock market fluctuations, inflation (the price of eggs), interest rates, lack of hiring.

Question – look back over 100 years and think about how many US Presidents understood economics and the economy? I pay attention to this given my degrees in economics. Believe me, it’s not just the presidents, it’s most politicians.

In my opinion it isn’t/wasn’t understood by Nixon, Carter, Obama, Bush Sr., Biden, or Trump. Clinton understood it, reduced the size of the government without disruption and balanced the budget in two of his years (the only balanced budgets since 1970). Reagan understood it and if he had got his wish of a line-item veto it would have made a difference over the last 40 years.

What do presidents have to do with all of this? They are, for the most part, creators of uncertainty and what we have now is a lot of forced uncertainty. There’s always uncertainty in life and business but it’s when it’s forced on us by government actions (or inactions), things out of our control, it creates the possibility of a cluster you-know-what.

But what about more local leaders? They flunk too!

Bellevue, Washington is not complaining about the city of Seattle putting a head tax on large companies. Bellevue now has over 15,000 Amazon employees filling offices, buying from local merchants, and paying sales and B&O tax.

The State of Washington legislators want to tax wealth (didn’t Jeff Bezos move to Florida because of our capital gains and estates taxes?), have a head tax, and increased fees on everything. At least the governor is saying, “stop” to some of it.

One of the non-profits I work with is experiencing severe headwinds because of what’s coming out of D.C. Here’s what I wrote the executive director, copying the other board members.

When everybody has exhausted their whining it’s time to get to work. I suggest something like the following:

• Convene your staff
• Brainstorm all possible ideas to grow, cover anticipated losses, stay afloat
• Outline what’s needed for each
• Rank them and start on the top three by creating a basic plan for each
• Put together a budget for each with outcome probabilities
• Create a business plan around them (say the top three)
• It could be as simple as who, what, where, when, why, and how
• Convene a board meeting to review, comment, pick apart, praise your work, etc.

In other words, step back, assess your strengths and risks, and plan. It’s more important than ever to plan. It’s even more important to take action on your plan. These are the things OneAccord helps clients with.

The M&A World

In my world of M&A uncertainty spooks some lower middle market buyers and sellers. So, let’s look at the concerns based on the above points, which pile on to the regular ever-present risks and uncertainty.

Sellers Point of View

These concerns manifest themselves with both business buyers and sellers. For sellers, what if I sell my business and we hit a recession? I may:

• Not get paid in full.
• Must come back and help.
• Get the business back.

If this business owner is profitable it might not be a big deal to keep the business and the income stream, especially if the business is making $1, 2, 3 million a year, unless said owner had a catastrophic event like death, divorce, serious health issues (we sold a company a few years ago after the doctor told the owner his life was at risk if he didn’t sell the business).

Other thoughts may include what if my buyer still makes the same profit but two-thirds of it is going to acquisition debt payments? If profit goes down 20% I can handle it but that may put the buyer out of compliance with the bank and who knows what they’ll do other than stop payments on my seller note and put any earnout at risk.

Buyers Point of View

Buyers worry about the same things as sellers. Things like failing, debt coverage, losing their investment, etc. One would think they’d be on the sidelines.

Reality – there’s no shortage of buyers, from individuals to professional buyers. Some with experience and money and some doing some wishful thinking. Why? The executive and professional job market, which is pretty tough right now.

What is new over the last five years is some (many) are willing to get investors so they can buy a larger company than they would using only personal assets. And guess what, there are a lot of investors who want a ROI much higher than the stock market who are willing to invest in the owner/operator.

What about Private Equity and Family Offices (professional buyers)? There’s too much money in PE chasing too few deals. It’s got so popular and there are funds that invest in PE deals so many more individual investors can participate. Lots of money, not many deals, leads to not caring as much about macro policies, government actions, etc.

Bottom line, a bit skittish in the small business market and the opposite in lower middle market and above.

But I Don’t Want to Sell (Now)

Consider all the concerns and uncertainty mentioned above. Realize it’s more important than ever to do the things you’re supposed to do so when it’s time you can Exit With Style Grace, and More Money^®. Seven keys to this are:

1. Have solid financial systems and therefore accurate financial statements. Don’t treat the accounting department like Cinderella, the weak little stepsister off in the corner. Have a good system of management reports (a CFO can help with this) not just basic financial statements. And don’t blend your personal and business checkbooks, don’t buy assets you don’t really need to save taxes (you’re still out over 60%), and keep a strong balance sheet.
2. If the business is dependent on you, the owner, get over it. Your business is worth more when you do less (day-to-day). An owner’s role should include vision, strategy, growth, and other big picture things. I can tell you from personal experience it’s tough. My daughter works for me, and we have two other fairly new, associates. I must let them go, do their thing, lead conversations, and if they stumble be their safety net. This means delegation. You need to delegate, they need to accept it, and it must be part of your culture.
3. Grow, grow, and keep growing. From individuals to profession buyers want to see growth and it’s even better if you can show what you did and are doing to achieve your growth. This means document your sales and marketing strategies and tactics.
4. Show you can hire and retain great people. It’s expensive to replace and train people. No buyer wants to see high employee turnover. After all, as Bob said to Roy when Roy wouldn’t let Bob talk to management before closing on his acquisition, “You may think I’m buying your business, I’m really buying your people.”
5. Just like for you, reduce (eliminate if possible) any other dependencies. These could be a dominant supplier, customer concentration, the landlord, or a key employee you “can’t live without.”
6. Take care of the three “I’s.” IP, IT, and incentives. If you have Intellectual Property like trademarks, copyrights, patents make sure they’re protected. A recent client just found two companies, in other states, using his trademarked name. The fact he trademarked it means he has protection. IT is even more important in these days of phishing, hacking, ransomware. Hire pros and make sure all firewalls are in place. Then keep in mind most IT breaches are human caused, so train your people on cybersecurity.
7. Finally, see the big picture. As mentioned above, concentrate on strategy and related. Create the tactics but don’t do them yourself. Keep these two things in mind, don’t trip over dollars to pick up a dime (courtesy of my friend Kevin Briscoe, CEO of CFO Selections), and growth hides a lot of operational warts. Grow and then fix the warts.

Conclusion

Uncertainty abounds and always has. In the 2000’s a bank president told me he was worried because there were so many (young) bankers who hadn’t seen a downturn. Sure enough, in 2008-10 they saw one, boy did they. A Seattle area bank was proclaimed “Best Bank in the Country” in 2007. By 2009 they were absorbed by a mega-bank. Why? Industry concentration. Their loans were almost 100% real estate.

How many companies have used the excuse, we’re understaffed, to cover any service inadequacies? A lot. Yet many other businesses don’t have that problem. Seattle area businesses Dick’s Drive-In and Ivar’s have incredible tenure in an industry known for high employee turnover. They’re doing something right.

These are just two examples on the opposite of the spectrum. As per above, do the things you’re supposed to do, and good things happen. It takes is a proven plan and an experienced guide. You must follow the plan, paying attention to the details.

Uncertainty doesn’t have to mean hesitation.

Whether you’re planning to sell your business soon or simply want to be ready when the time comes, OneAccord helps Seattle business owners turn today’s volatility into tomorrow’s opportunity. Let’s build your exit strategy before you need it.

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