How to Sell Your Business
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Thinking About Selling Your Business?
- Are you a successful business owner looking to retire?
- Are you burnt out and looking for an exit?
- Do you know that it will likely take you a year or more to prepare your business for sale, take it to market and consummate a transaction?
- Do you know what your business is worth and how to position it for sale at the highest price?
- If you’re thinking about selling and wish to reap the greatest reward, you should start preparing now...
What you probably want to know
- What is my business worth?
- How long will it take?
- What will it cost?
What you need to know
- What is the business sales process?
- What can you expect from the broker?
- What does the broker and buyer expect from you?
- That you need to keep running the business at a high level.
The Interview (First Meeting)
- Identify goals and objectives
- Go over the business sales process
- Dig deep into your company so we can properly value your business.
Valuing Your Business
- Our evaluation goes beyond the simple multiple of earnings method. We ask questions like:
- How do you promote your business?
- What makes you different?
- What are the risks and rewards facing a new owner?
- What skills are required to operate the business?
- Who is the ideal new owner?
- The buyer will want to have confidence that the revenues generated will continue post acquisition.
- Your company’s value drivers, risk factors and synergies will help us identify strategic buyers and position your company to sell for the highest value.
Is now the right time to sell?
- We often work with clients months to years in advance of selling.
- It’s hard for a business owner to determine if they’re ready to sell without knowing how a buyer is going to value their business and what opportunities are available to improve value creation.
- Once decided, an engagement letter is signed and we continue moving forward.
Preparing the Business for Sale
- Prior to launch we discuss the likely due diligence requirements a buyer will have.
- We need to ensure that all financial data is unambiguous and easily verified.
- Have answers prepared for all of the core questions a buyer might have.
Creating the Marketing Package
- Our Confidential Business Review (CBR) is the roadmap for how we take the business to market.
- It’s a story of value drivers, risk factors and growth.
- It provides a serious buyer all of the information they need to make a preliminary decision to move forward.
Searching for Buyers
- We spend thousands of dollars per year marketing to external sites to generate buyer interest.
- We have 15,000+ buyers in our proprietary database.
- When we launch a listing, everyone in that database who is searching for your type of business will get a teaser information sent to them.
- We take the time to search for private equity and strategic buyers for your business
Negotiating the Deal
- The two key deal terms are price and risk.
- The more risk assumed the more favorable the price.
- If the buyer is a good fit, we’ll get the terms ironed out.
- If the buyer is not a good fit, the deal will likely fall out.
- Matching the right buyer with the right business is how we define success.
Due Diligence
- If you have all of your books and records in order, this process can go fairly quickly.
- If not, the process can drag out months and ultimately not be consummated.
- Third party lenders will also need to perform their own due diligence on both the buyer and the business.
Drafting the Contract
- Good transactions attorneys keep the negotiations moving forward efficiently.
- They customize contracts to limit vagueness and ambiguity.
- This investment can be thought of as an insurance to reduce risk of litigation post-closing.
Closing
- At the close, the business assets are transferred and the down payment will be wired to your account.
- Post-closing, there will be a transition period, training, possible consulting and then a release of any hold backs for tax liens or indemnifications.
- Celebrations!
Get started with a free evaluation and consultation
