Five Tips & Five Steps --- To Sell or Not To Sell My Business

They were seriously thinking of selling your company, but I really do not know where to start. You've heard some horror stories about different sales processes, with an advance payment and are less than what you really wanted, but people so far in the process that will not repent. You are not really big enough for one of Wall Street banker and investment is not known mergers and acquisitions of companies hiring reliable.

Does this sound familiar? NotDespair, you are not alone. Most owners of small businesses with revenues of $ 5,000,000 up to $ 100 million the same questions and face the same doubts. Hopefully the following tips to help you calm down and put stages and provide some guidance for the actions that you can not or will not take.

Attorneys In Columbus Ohio

TIP # 1 - Preliminary Assessment of Business Value

Five Tips & Five Steps --- To Sell or Not To Sell My Business

Preliminary is the key word here. Most owners have an idea of ​​what their job is and whatbe satisfied when they decided to sell. Unfortunately, statistics show that most owners of an opinion of value, which is usually higher than what the market should bear. So, before going to hire discussing New York M & A business or go to this seminar on the sale of your company with your tax advisor, consultant, popular, you know, or have grown our business with the banker well you r or lawyer. Do some networking, and you may find that you do a preliminary assessment for a verysmall fee ($ 1700 to $ 2500). This at least give you a platform, value, and some knowledge to determine the next steps. (E-Mail-rick@ceostrategist.com for more information on a preliminary assessment of the use of industry-standard methodology)

Tip # 2 - Having a strategic review of business Performed

He had made a preliminary assessment, and you are comfortable enough to continue the process to the next level. This means that you need to complete a strategic review. This can be done by you asOwner or any family or household, has been in business. However, it is recommended to perform this evaluation, an outsider. As the owner who work in the field on a daily basis, it is often difficult to see the wide range of organization as a whole. Need to know how your company is ready for the sales process. There are many factors to explore the willingness to sell before the final decision. Failure to comply with this assessment and to correct or go toCompensation for all the problems discovered will cost hundreds of thousands of dollars in sales process can begin. You can lead a strategic review by any number of consultants in bulk. Prices will be $ 5,000 to $ 15,000 for this process. After reading this, we can estimate that the time is not right, choose to maximize shareholder value through the sale of the company. It might make more sense to continue the activities of growthrecommendations outlined in the assessment.

TIP #3 - Who is My Buyer?

You had an assessment, you put lipstick on the pig (fixed any issues uncovered) and now you decided to take your baby to market. Don't jump right into the M&A arena and hire that big mergers and acquisition firm. Chances are very good that you already know who the buyer or buyers might be. Is it your biggest local competitor, one of the national firms, one of your suppliers or customers looking for vertical integration or could it be one of the many investment groups. Do your homework before you commit to paying the type of commission you will end up paying with even a smaller M&A firm. Explore the internet and look at businesses for sale or companies that are looking to buy. Talk to your association. You may end up with several interested parties that can drive up the price without paying high commissions. (Of course, the minute you start discussing a sale with any potential buyer be sure to get your attorney involved)

TIP #4 - I'm Ready to Sell, What Now?

Whether you do it yourself because you know of numerous prospective buyers or you decide it's too much hassle and look for professional M&A help, the next step is to create a comprehensive document, The Confidential Strategic Business Review Report. This document describes your company in detail. It includes recast financials. (Financials that are adjusted to create a realistic EBITDA taking out owner perks that would not be costs to a new owner) EBITDA is earnings before interest, taxes, depreciation and amortization. Acquisitions are often made as a multiple of EBITDA.

If an M&A firm represents you, preparation of a one-page Confidential Profile which highlights the acquisition opportunity without disclosing the name and location of your company is essential. This profile is used during the initial buyer/Investor contact phase.
At this point, make sure that the firm you pick matches your company and even more important, make sure you are comfortable with them. Factors you should consider when selecting an M&A firm include:

o How many companies have they sold in wholesale distribution

o How many companies match or come close to your company's revenue stream.

o References, and you must check them, are excellent

o What industries do they specialize in

o What is the size of their firm? You don't want to be a little fish in the ocean but you also don't want to be a whale in a pond.

o How many active qualified buyers do they have in their data base? It should be hundreds if not thousands.

o How many private investment funds are they connected to?
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TIP #5 The Basic Steps in Concluding a Sale.

Things are going to get both exciting and frustrating. Again, the following steps apply regardless of who sells your business but are primarily the steps utilized by an M&A firm taking your business to market.

Step #1. TARGETED BUYER SEARCH

A targeted buyer search is performed from a data base of potential buyers and investment funds. If you are using an M&A firm this data base will more than likely be over 10,000 in number. A list of potential synergistic buyers will be the result of this search. This list is reviewed by ownership to discard any obvious mismatches or personal owner concerns about anyone on the list. A second formal valuation that includes equipment and property appraisals may be a desirable option at this point.

Step #2. INITIAL BUYER CONTACT & DATABASE PLACEMENT

Targeted Buyers & Investment Funds are contacted via mail, which includes the Confidential Profile. Concurrent with the above activity, the client company is listed on the Merger & Acquisition on-line database, presenting the acquisition opportunity to the database's registered buyers. Interested buyers and other M&A intermediaries generally will respond via E-mail. .Personal Follow-up to determine potential buyers' interest in obtaining The Confidential Strategic Business Review Report is conducted to ascertain interest.

Step #3. INTERESTED BUYER CONTACT and FOLLOW UP

Upon receipt of an endorsed Non-Disclosure Agreement, The Confidential Strategic Business Review Report is sent to interested buyers/investors. The M&A firm or your representative follows up with interested buyers and provides additional information as may be required. Buyer's credibility (ability to buy) needs to be verified at this point. A buyer visit is arranged to view the premises and speak with ownership. This visit can be arranged for after hours if ownership is concerned with confidentiality.

At this point discussion and counsel needs to occur to prepare relative to pending buyer visit and preparation of buyer visit agenda with meeting objectives that have been predetermined. (Management presentation, facilities tour, additional documentation required, buyer-client interface & discussion guidelines and other relevant details to ensure a positive image and successful meeting).

Step #4. Getting a Letter of Intent

Confirmation of buyer(s)' interest in pursing a transaction and obtaining of a Letter of Intent is the number one objective. Ideally several offers presented for comparative purposes and obtaining the most favorable price and terms will maximize the value of the sale. Of course you are not obligated to accept any offer presented. A letter of intent is a basic contract that states the buyer will acquire the business at a suggested price assuming all details and financial information submitted is accurate and passes due diligence on the part of the buyer.

Your representative should interface with your professional advisors (CPA, attorney, financial planner etc.) as may be required in providing their assessment of a proposed transaction. Guidance should be provided relative to negotiation of deal points and other issues as may be required.

Step #5. Due Diligence and The Deal Consummation

Assistance should be provided to prepare for the buyers due diligence. Don't try to conceal or hide the dirty underwear. Own up and show what has been done to put it in the wash. Honesty is essential. Generally speaking, the process is predominantly financial. However, employee concerns and other issues may arise. Your representative should be available or on cite throughout the process. A thorough inspection of inventory and accounts receivable are a key part of due diligence. Experience tells us that inventory value is always a bone of contention. What is aged, ailing and dead inventory valued at? Be prepared for further negotiations. Have a heart to heart with your advisers. Make sure they have a comprehensive understanding of your objectives. Keep in mind that although most good attorneys are deal makers, some are deal breakers.

This process sounds more complicated than it really is. The real difficulty lies in the initial decision on whether you should sell your business or not. Although this article indicates that selling your business yourself is possible, and it is, make no mistake it is not recommended that you attempt to sell your own business without proper consultation from professionals that know the mergers and acquisition business.

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Five Tips & Five Steps --- To Sell or Not To Sell My Business