HOW THE PROCESS WORKS
The information contained within our ‘What You Need to Know’ section outlines the initial points you need to consider when thinking of selling your business and covers how we can help.
This section will go through the process in more detail and highlight the various stages of how a sale works. Before putting your business on the market, you should take the time to fully understand the procedures involved, and whilst we trust the following information will be of assistance we do highly recommend that you speak to us directly so that we are able to explain the strategic importance of each stage.
Selling your business is probably going to be one of the biggest financial transactions of your life.
Before you move forward with the sale of your business it is important that you know you really want to do it and why. If your reason for selling is retirement, health issues, divorce, burn-out, other business ideas/ventures or another similar reason then it is likely you are serious about selling.
If your only reason to sell is for ‘money’ then the chances are you may not be ready to sell. Most main street businesses do not sell for the type of money that would allow somebody to ‘cash out’ and it is for this reason that serious sellers usually have motives other than ‘money’.
A major reason that a business does not sell is that the owners are too emotionally attached and therefore believe that the business is worth more than it actually is. Another commonly seen reason is that an owner is not willing to offer financing, which in a number of instances can be crucial to the terms of a successful sale.
To be successful in selling your business you need to be realistic about what can be expected in respect of the sale price, as well as the terms of the sale, so that you will attract a suitable buyer. This is where the objective view of a business broker, based on their knowledge and experience of the market, becomes invaluable.
DECIDING UPON THE ASKING PRICE
Determining the asking price and terms to be offered is a vital step in the sale process as pricing your business too high (or too low) can have an adverse effect on the chances of it selling.
Some sellers make the mistake of pricing their business at a high level in order to ‘test’ the market but more often than not placing a business on the market at a price that is too high could actually result in it selling for much less than what you might have otherwise received.
We can work with you to create a fair-market valuation for your business and help you to decide upon the asking price and terms you wish to offer. We will do this at no charge to you and without obligation to use our services. The information will remain highly confidential at all times, even if you decide not to sell your business through us.
We screen all inquiries and will only recommend that you meet with a serious buyer, saving you considerable time and effort, whilst benefiting from our experience and skills when it comes to finding the perfect match for your business.
We make sure to handle all negotiations in a patient, professional manner that keep the focus clearly on the business issues rather than any emotional matters. We can pursue the buyer on your behalf without this affecting the terms of the sale – if this is done by the seller themselves it can give the impression of desperation and lead to a lower offer.
One thing you should never do is attempt to cover up any problems the business has. You should disclose any actual or potential problems to your business broker up front and to prospective buyers in the buyer/seller meetings.
If you fail to do so a great deal of time, energy, and expense could have been incurred by all parties involved in the transaction, only to have the deal fall apart at the final moment. A buyer will do extensive due diligence on the business and will most likely find any ‘skeletons in the closet’ prior to closing so it is better to inform them of any problems up front. By doing so the buyer may decide to proceed anyway, however if they first learn of the problem during due diligence it is almost certain they will lose all trust in you as the owner and a deal will never go through.
If for some reason a buyer does not discover what you are hiding until after closing you could then be faced with serious legal problems, which is a situation all parties would clearly like to avoid.
In order to ensure you are fully prepared for the sale of your business you will need to have available all financial information, lease agreements, franchise documentation (if applicable) and all other relevant documents. We can assist you in this process to make sure you have everything organized and together.
When a serious buyer has been identified you will want to be ready to proceed with the sale. Major delays caused in the due diligence process due to documentation not being ready and available can create frustration for the buyer and could ultimately jeopardize the sale of the business.
You need to ensure that your business continues to operate as normal and, if applicable, remains visually appealing. Be sure to keep it clean and organized and that all equipment, computers, and furniture are in good working condition. If necessary, paint and make other similar improvements in the appearance of the business as this can pay dividends in terms of the final sale price.
You should always continue to run your business and make decisions as if it were not for sale. Always be polite and offer the highest level of customer service as a customer could be a prospective buyer.
CLOSING & THE TRANSFER OF OWNERSHIP
During the sale process we will guide you through each and every step whether that involves working with accountants, attorneys, franchisers, landlords or any others necessary to make the transfer of the sale successful.
We will produce a customized checklist of each of the activities that need to be accomplished prior to closing to ensure that the process runs as smoothly as possible, and will be on hand to offer guidance at every stage.
THE SALE ITSELF
Below is a summary of the areas in which we will help you to secure a successful sale:
Recasting of financial statements to reflect the true earnings of the business
Preparing business and other pertinent documents
Marketing the business in a confidential manner
Searching buyer databases for prospective purchasers
Initial pre-screening of buyers
Obtaining signed confidentiality agreements
Sending confidential business reviews to buyers
Holding buyer/seller meetings
Negotiating price and terms
Executing the purchase contract
Monitoring due diligence process
Preparing for closing & the transfer of ownership
Fulfilling all post-closing obligations to the buyer
For more information on how we can help with the successful sale of your business Contact Us today.