Step 1: Determining Your Path

Many Merger and Acquisition Advisors and Business Brokers have one-size fits all plan to sell businesses. They employ the same process for every client.

We believe that you are unique, your business is unique and your goals are unique. Shouldn’t the plan to sell your business be uniquely designed to achieve your goals? We think so.

That is why we, unlike those other Merger and Acquisition Advisors and Business Brokers, begin every client engagement getting to know you. After all, selling your business is about you and your goals – it is not about us.

Our process begins by working with you to discover and prioritize your goals. The question is: What do you really want? Many business owners will reply that their goal is simply to sell the business. However, the decision to sell your business involves many issues that could have big impact on your life.

Our job as experienced Merger and Acquisition Advisors is to bring you our years of experience and help you recognize and prioritize the issues involved in selling a business. There are many questions you need to answer to create your unique plan to sell a business including:

• Will I be financially strong enough to retire or buy another business?
• What is most important – money, employee retention, family succession, company legacy or culture fit?
• Do I need cash at closing or risk that my children or employees will successfully grow the business and pay me for the business over next 10 years or so?
• Is this the right time to exit and sell my business?
• What will I do after I exit and sell my the business?
• Do I want to stay involved after I sell my business?
• Do I need to improve the business to realistically realize that sale price I want?
• Do I want to sell my business now or do I have a longer time horizon?

The answers to these questions set the framework for the plan to sell your business and put you on the right path to achieve your goals.

Step 2: Exploring Your Business

Selling A Business Requires Preparation
Any business broker who does not commit to spending the time and energy to learn your business from top to bottom is not going to get the job done for you.

Why should a business broker do extensive advance preparation? Have you ever run into a salesperson who was not a master of the product he was selling. He was very enthusiastic about the product and said it was the best. But he couldn’t answer your questions, explain how you would get the most out of the product, show you all the benefits or distinguish the products from the competitors’ products. He was dumfounded when you walked away – amazed that you could not see for yourself what a great product he was selling.

When you sell a business, your potential buyers will behave the same way as you did. They don’t have the same enthusiasm for your business as you have. They don’t see what you think should be obvious. You have to show them.

That is why we are a different breed of business broker.
We will spend time and energy examining your business inside and out. We will get to know every aspect of your business so we can capitalize on your advantages and minimize any disadvantages that buyers may raise. Why? So that we are prepared to show buyers why they should pay top dollar for your business.

As Your business Broker We Will Help Sell Your Business for Top Dollar
We are not just business brokers. We also have accounting, legal and operational experience. This allows us to begin the process by carefully examining your financial statements. Do they reflect the results a buyer can expect? Probably not. We will adjust your financial statements for nonrecurring items and other items to show the buyer that it can expect better financial results than reflected on your statements.

Value drivers are critically important when you sell a business. As your experienced business broker, we will work with you to discover your value drivers – things beyond the financial numbers that give your business extra value. For example, we will search for positive market, customer, supplier, sales trends, market positions, hidden intellectual property value and strong sales and management teams among others.

Our wide-ranging experience allows us to go beyond what a typical business broker does. We will also work with you to uncover changes that could be made to increase the value of the business such as savings that could be derived from using different suppliers or using different distribution methods or sales that could be generated by line or marketing expansion - anything a buyer could implement to improve profitability. The more profitable your business is or can be, the higher price you receive.

Armed with this information, we are prepared to market your business and show buyers why they should pay you top dollar.

Step 3: Telling Your Story

First impressions do count.
When selling a business remember it takes only 7 to 17 seconds for a person to form a first impression. Moreover, the saying goes that "a first impression is a lasting impression."

Why is this important when you sell a business?
To attract buyers when you sell a business, buyers must have a favorable first impression of the business. If they do not, they will lose interest and move on. Buyers will form their first and lasting impressions of your business based on the Executive Summary and Confidential Memorandum.

What is an Executive Summary and a Confidential Memorandum?
Just like every other business, the business of selling a business requires marketing materials.

As your business broker, we will prepare two marketing pieces: The Executive Summary and the Confidential Memorandum.

The Executive Summary is the first document a prospective buyer will see when we, as your business broker, begin marketing your business to prospective Buyers. It is a one or two page document that describes your business in general terms and helps a prospective buyer determine if it wants to further explore an acquisition. We craft the Executive Summary so that it anonymously describes your business, its achievements, its value drivers and its future growth potential. Your Executive Summary will focus the significant attributes of your business that are likely to be valued by buyers.

The Offering Memorandum is the central marketing piece when you sell a business. It describes your industry and your business in detail, including its operations, achievements, competitive advantages, history, employees, management, historic financial results and future.

As experiences business brokers, we know that it is critical for these documents sell a business - tell your story, stress the positives, focus on attributes that buyers value, as well as describe changes that could be made that would make the business more profitable. Just laying out the facts will not entice buyers. We use our knowledge of how buyers think to craft these documents to giving buyers a view of your business beyond just the raw facts.

Your Executive Summary and Confidential Memorandum will be professionally prepared, impressive and designed to leave prospective buyers with a good and lasting impression of your business.

Step 4: Putting the eBay Effect to Work for You

In most cases, the key to getting top dollar for your business is to get as many buyers interested as possible. We call this the "eBay effect."

Why do people list items on eBay instead of in the Sunday newspaper?
Because they want to reach as many potential buyers as possible and get them bidding against each other to drive up the price.

As experience business brokers, we will use the eBay effect to sell your business for top dollar. Think about it - if you have only one prospective buyer, that buyer has you over a barrel and has no incentive to negotiate. Why? Because that buyer knows you have nowhere else to turn. Employing the eBay effect puts you in the driver’s seat because if one buyer doesn’t offer you top-dollar, there is always another buyer who will.

Do you think it makes the most sense to sell a business to a competitor?
You may be right - but there are a lot of other possibilities when you sell a business.

Others that may be better buyers than a competitor when selling a business include:

• Companies that use your product or service that might want to vertically integrate.
• Companies that employ the same distribution channels as you and are looking to maximize the use of those channels.
• Companies that make similar products and want to expand their distribution channels.
• Private equity group that wants a platform in your industry.

These are just some of the many possibilities.

To help you sell a business for top dollar, we, as experienced business brokers, will use the knowledge we have gained about your business and your industry and our research into other compatible industries to identify many prospective buyers that may be interested in buying your business. This, combined with the latest technology, public and proprietary databases and our industry and financial contacts, will ensure that no stone is left unturned. The eBay effect will be working for you.

Step 5: Selling A Business Requires Actively Pursuing Prospective Buyers

Unlike most business brokers, we know that selling a business is a proactive process. It simply is not good enough for our clients to post their businesses on a website and hope that buyers contact us.

Selling a business for top dollar takes more than sitting back and waiting for buyers to come to us – which many business brokers do. Instead, we use a four-stage process to proactively contact prospective buyers to ensure that no stone is left unturned.

Stage One: Canvas the Prospective Buyers and Find Out Who is Interested
Unlike most business brokers, we know that finding your best buyer requires canvasing all the identified prospective buyers and determining who is interested in your business. In most cases, we will cast a wide net, How do we create the net? We do extensive research to identify the universe of prospective buyers. The goal is to identify as many prospective buyers as possible so that the eBay effect is working for you.

Then, unlike the business brokers that post businesses for sale on a website and hope for the best, we actually mail or email your Executive Summary (which does not name your business) to all identified prospective buyers. We don’t wait for buyers to come to us. Instead, we go find them.

Stage Two: Provide Confidential Memorandum
Prospective buyers who are interested after reviewing the Executive Summary will want further information to determine if your business is a good fit with their business plans.

When selling a business, it is critically important that your business broker protect that business. To that end, we screen each interested prospective buyer before providing them with a Confidential Memorandum. Using our experience, we determine a buyer’s true level of interest (are they window shopping or fishing for information?) and ability to close (do they have the funds or do they have access to financing to buy the business?). Only those that pass this screening will be given a Confidential Memorandum and then only after signing a Confidentiality Agreement.

Stage Three: Answer Buyer Questions
Buyers who remain interested after reviewing the Confidential Memorandum will then call us asking for further information about your business. They ask many questions and ask for documentation.

Again, it is critically important that your business broker protect your business. Only those buyers that we determine are seriously interested in buying your business and have the financial ability to do so will receive further information.

This is a sensitive stage of the process when you sell a business– a balancing act. Serious buyers need information to determine what to offer you for your business and you need to protect your business. As experienced business brokers we can balance these needs making sure that serious buyers receive the information they need while at the same time protecting your business.

Gatekeeper to your Business. Your business broker should be your gatekeeper when you sell a business. Our role provides you with two distinct benefits. First, we field and respond to the buyer requests insulating you from constant interruption. Second, using our experience about the information buyers need and our knowledge of your business, we sanitize and filter the information given to these prospective buyers to protect sensitive business information such as customer information.

Our experience as a gatekeeper is important when you sell a business. Not only does it ensure that your business will be presented to prospective buyers in the best light, but it also:

• Protects your confidential and proprietary information;
• Insulates your management team’s busy days from the time consuming data gathering process;
• Protects your competitive edge; and
• Streamlines the information exchange with prospective buyers.

Stage Four: Staging Meetings and Tours
Prospective buyers still in the running at this stage may want to meet you and your management team, tour your facilities and have a face-to-face meeting with you.

This is an important final step when you sell a business. The buyer needs to determine if it truly has an interest in buying your business. Just as importantly, you need to meet the prospective buyers to ensure their interests are aligned with yours.

Selling a business requires knowledge of the business and the key value drivers that the buyers seek. As your business broker, we get to know your business and know what buyers seek. Remember, we are experienced and unique among business brokers. Our legal, accounting and operational backgrounds, combined with our business broker experience, allows us to prepare these presentations, schedule tours and coach you and your management team so that you can present your company in the best light.

Step 6: Selecting the Best Buyer When You Sell A Business

At this stage in the process of selling a business it is time to move forward. We will ask each buyer to provide a Letter of Intent outlining the purchase price and other material terms of their offers.

You will likely receive multiple Letters of Intent. Keeping your ultimate goals and objectives in mind, we will assist you in analyzing and comparing these Letters of Intent.

Now it is time to choose one buyer. This is possibly the most important step in the sale process. A misstep here may cost you a lot of money and may even result in a failed sale.

When you sell a business, buyers will act just like any typical consumer. Ask yourself this question:
Would you want to buy a TV that someone just returned to the store - or - would you assume something is wrong with it and buy a TV that has not been taken out of the box? Odds are that you would buy the TV in the unopened box. It is human nature – you immediately assume that something is wrong with the returned TV.

If you choose one buyer to whom to sell a business and the sale does not close, other buyers are going to assume that something is wrong with your business. You may end up with a lower sale price or even no sale at all. The lesson: It is critically important to select the Best Buyer.

How do you select the best buyer when you sell a business?
As experienced business brokers, we know which buyers are going to be difficult to deal with, which buyers have the financial ability to consummate the purchase, and which buyers are going to try to drive the price down during the diligence phase? We also know how to evaluate the different terms in the Letters of Intent.

If you try to sell a business on your own, this process can be very confusing and without experience working with buyers, it is easy to select the wrong buyer. You can rely on us as your business broker to guide you. During the process, we will have had many opportunities to size up your prospective buyers. This familiarity combined with our years of business broker experience will help you select the best buyer and lead to the successful sale of your business.

Step 7: Navigating Diligence

At this stage, selling a business is close to becoming a reality. The buyer is committed to buying your business but wants to be sure that your business is what you have represented it to be. This is known as the diligence process. During this process, the buyer will ask questions and for documentation of things such as leases, detailed financial information, corporate records, customer and supplier information, etc.

An experienced business broker is invaluable at this stage in the process. This can be a very detailed and time-consuming process. It is difficult to run a business and respond to diligence requests on a timely basis.

That is where we step in
We think your priority should be on running your business not selling a business. To lighten your load, we:

• Start preparing for diligence long before you select a buyer avoiding a mad dash to the finish that consumes all of your and your staff’s time.
• Use our knowledge of your business and work with buyers to pare down the diligence items to only those that are relevant saving you and your staff a tremendous amount of time.
• Draft responses to diligence questions for you and your staff saving you and your staff a lot of time and effort.
• Field buyer questions eliminating repeated interruptions to your day .

We assure you that with our business broker experience combined with our understanding of legal, accounting and business operational issues, your diligence process will be smooth and efficient freeing up your valuable time to run your business.

Step 8: Negotiating The Final Deal

The process of selling a business does not end with the Letter of Intent and diligence. The Letter of Intent you accepted outlines the basics of your deal such as price and payment terms. There are many blanks to be filled in such as representations and warranties.

This is where our experience as business brokers in closing deals and in the legal and accounting fields helps you tremendously. We will work with you and your legal and accounting representatives to help you understand the various provisions of the sale agreement. With our thorough knowledge of your business and our many years of transaction experience, we will anticipate issues that a buyer may raise during the negotiation process. We will collaborate with you to develop solutions to these issues before they arise, giving you upper hand during negotiations.

 

Step 9: Closing

This is the most rewarding stage when you sell a business. After diligence and negotiations are complete and the final sale agreement is drafted, all that is left is for you to close.

We will work with you every step of the way to make sure that your closing goes smoothly and that you receive your reward for all your years of hard work.

A Word About Confidentiality

Selling a business can have some potential pitfalls if not managed carefully. We understand the sensitivity of taking your business to market as well as the risk of disseminating information about your business. It is a balancing act.

As experienced business brokers, we know that certain information in the wrong hands could damage your relationships with customers, suppliers and employees. On the other hand, buyers need information so that they can determine what to offer you for your business.

We have designed our multi-step process for selling a business to protect you and your business. Your sensitive business information will be disclosed to only those buyers who have expressed a bona fide interest and who have a proven ability to execute a transaction.We go even further and sanitize the information when warranted. For example, a buyer may ask for sales figures for your top 10 customers. From our experience, we know the buyer is looking for customer concentration. So, rather than naming your customers, we will provide the list, but will not name the customers. This way the buyer gets the information it needs, and your proprietary information is protected.

Maintaining confidentiality when you sell a business is an art. As your business broker, we will manage the information exchange to effectively protect your business while at the same time providing the buyers the information they need to make you the best offer.