67 - Private Equity and Managed Expectations!

2021-09-29

In this episode we interviewed Russ Fleming, a partner at Baker Tilly, who runs their Real Estate and Construction division in Minneapolis. Russ and I talked today about Private Equity as a viable option, and specifically what he and his clients are experiencing with that type of exit strategy.Some of the Private Equity trends he's noticed are really trends that concern all business owners, regardless of their stage in the game. So, if you are focused on these issues, you're on the right...

In this episode we interviewed Russ Fleming, a partner at Baker Tilly, who runs their Real Estate and Construction division in Minneapolis. Russ and I talked today about Private Equity as a viable option, and specifically what he and his clients are experiencing with that type of exit strategy.

Some of the Private Equity trends he's noticed are really trends that concern all business owners, regardless of their stage in the game. So, if you are focused on these issues, you're on the right path.

1. Workforce - PE firms want to know what you're doing to retain key talent. Are you taking steps to build a better Culture? Their ROI is heavily impacted by the people and their performance, just as yours is.

2. Supply Chain - Do you have more than one supplier source for key materials? What does your risk profile look like?

3. More Boomers wanting to exit - there's competition among PE firms for well run, profitable and growing companies.

4. Diversity is a differentiator - if you have intentionally focused here, that's in your favor.

5. Capital gains tax is going up - PE firms know this and are pushing to help deals get done in time.

If you think Private Equity could be a viable option for you, be sure to get your house in order before you start the dating process. Russ says it's like Pre-Due Diligence; get ready for the process before it starts.

The benefits of selling to a PE firm can be ideal for owners who really want to expand, but lack the capital and/or other resources to make it happen. PE firms bring innovation, capital, technology, and many other benefits. Before you say no to Private Equity, weigh all the pros and cons first.

Here are a couple of resources for owners provided by Baker Tilly. You can also reach Russ Fleming at russ.fleming@bakertilly.com or go to Bakertilly.com for information and resources.