Selling Your Business- A Strategic Process
Selling a business is more complicated than most realize. As you plan to divest your company interests, you can rely on our extensive knowledge and proven process to minimize the stress that comes with such an important decision.
With an SB M&A intermediary by your side you can be confident that you’ll receive a fair price for your business as we help you mitigate disruption, headaches and risk.
5 Phase Business Selling System
SB’s time-tested approach to selling your business has 5 separate phases. Your M&A intermediary will usher you though each phase, explaining the details, strategic logic, and consulting on critical decisions to ensure that you have a complete understanding and that you’re comfortable throughout the process.
Phase One – Business Appraisal/Valuation
Before you commit to selling your business, it’s imperative that you have thought everything through completely. As your intermediary, it’s our responsibility to ensure that there are no surprises.
The process begins with a discovery session in an effort to gain a complete understanding of both you and your business; your reasons for selling, your selling goal, your plans after selling, including what you want to do with the proceeds of the sale. Your answers impact how we tackle selling your business and the terms of sale.
Engagement Agreement: As soon as you are comfortable with our approach to selling your business, you, and any other owners, will need to sign our Engagement Agreement. This agreement outlines in detail the terms of our relationship, including disclosure and confidentiality concerns that authorize us to proceed to next steps.
Detailed Business Analysis: In order to determine the most probable selling price for your business we will need to collect a substantial amount of data for analysis such as: financial statements, operational details, inventory, furniture fixtures and assets, market conditions, company history, building details, leases, staff, proprietary technologies and processes.
Financial Recasting: The process of recasting financials helps to reveal hidden value that doesn’t always show up on your financial statements; demonstrating the true value that a purchaser might actually expect as the future owner of your business.
Most Probable Selling Price: Once we’ve had the opportunity to absorb and analyze all of the information, and compare it against similar businesses, along with purchase options and industry standards, we give you a thorough report that represents our professional opinion regarding a realistic valuation of your business in the current marketplace.
IBBA Accredited Process: Our Most Probable Selling Price recommendation is based on an evaluation of 13 different approaches to business valuation that have been developed and recommended by the International Business Broker’s Association. They also comply with the Uniform Standards of Professional Appraisal Practice as set out by the Appraisal Foundation, the world authority in appraisal practice. These complex calculations involve considerable number crunching, detailed industry analysis, objective analysis, and the use of comparable statistics and industry research. The result is an exceptionally detailed and insightful report that has tremendous value to any business owner.
Decision Time: As it represents a tremendous amount of work, SB M&A charge a small fee to determine the Most Probable Selling Price of your business and to prepare the Marketing Materials. Even if you decide not to sell your business at this time, the Most Probable Selling Price analysis process will reveal strategic opportunities to help you increase the value of your business for future consideration.
Phase Two – Market Preparation
Once you’ve reviewed and agreed with the findings of the Most Probable Selling Price and signed the Engagement Memorandum confirming that you want to proceed at the agreed upon asking price, it’s time to take your business to market. There are two primary documents used to market your business throughout a wide range of media and marketing opportunities:
Blind Profile: This is effectively a teaser document that we use to start the process of attracting prospective buyers. It’s a one or two page document that outlines the general classification of your business along with just enough high-level financial information to solicit interest. This ensures your business identity remains confidential.
The Confidential Business Profile: Serious and qualified prospective buyers are provided a business prospectus which is a detailed overview of your business, summarizing all key aspects of your business. In order to receive this Confidential Business Profile, they must sign a strict, legally enforceable, non-disclosure agreement.
Phase Three – Marketing
Bringing qualified buyers to the table requires pro-active marketing. SB M&A will utilize an integrated approach to help sell your business as quick as possible. These channels include:
- Internal buyer lists
- Network contacts
- Targeted searches and solicitations, as well as
- Online advertising.
Buyer Screening: All buyer prospects are thoroughly screened before we set up a meeting with them to do further due diligence which may include:
- verifying financial statements
- confirming credit worthiness
- net worth and liquid assets
- ensuring that they’re interested to purchase within your time frame.
We also take the prospects personal, lifestyle and business capabilities into consideration to confirm that they are well suited to the opportunity and capable of operating your business with a realistic chance of success.
Be prepared. The majority of people who respond to sale ads simply don’t have the qualifications or capabilities to buy your business. Some wannabe business owners simply aren’t in a position to buy or lack the skill-set needed. Some are tire-kickers who are simply curious but not really interested. Others are competitors looking to gather intelligence. Regardless, our pre-screening process is meant to both save you time, and protect sensitive information regarding your business from those who aren’t likely to buy.
Phase Four – Negotiation & Due Diligence
Managing the prospective buyers expectations is challenging as we also need to negotiate with them to ensure a successful transaction. Our experience shows that this phase of the process works best when it’s handled strictly by our M&A intermediary.
Negotiation: Typically, because there is an element of training and financing included in the deal, it’s important to have a positive relationship between a buyer and a seller. Acting as your intermediary, we put our training and experience to good use as we negotiate objectively to create the best possible outcome.
Proceeds of Sale: Once the buyer presents an offer, we’ll prepare a financial analysis of the terms and conditions as presented and use it as the basis for drawing up and assessing counter-offers. Even a small change in terms and rates can make a significant difference in the net outcome and viability of an offer.
Due Diligence: As your M&A intermediary, we’ll also manage the due due diligence process with the lawyers, accountants, financial and business advisors of the prospective buyer to ensure a successful outcome. Typically there will be multiple rounds of negotiation and due diligence once the negotiating process has started. Your SB M&A representative will continue to act on your behalf to expedite the process to sell your business as quickly as possible.
Phase Five – Closing
Closing… the final stage. Selling a business is a potentially delay-prone process. But we are here to keep the lawyers and accountants on both sides synchronized to ensure a timely and successful agreement.
CONCLUSION AND GETTING STARTED
Are you are serious about selling your business? If so, you need a SB M&A intermediary by your side.
Contact us now to schedule time to speak with one of our representatives. We’ll arrange a private and confidential interview to provide further insights that will help you determine if your business is ready to sell and if your sales expectations are realistic.
Interested in selling a business?
Start the process. Complete confidentiality will be maintained