Selling A Business

The decision to sell a business is often a difficult one because of the profound personal and financial impact. Many different influences bring business owners to this decision. These include:

• Worrisome exposure to business risks often aggravated by personal guarantee of loans.

• Possible failure of the business if one or more owners become seriously ill or disabled.

• Divorce or dissolution of partnership.

• Owner's desire to pursue other business interests which may be more challenging or less stressful.

• Lack of sufficient working capital.

• A need within the company for new skills, new resources, or a new philosophy to cope with ever changing economic forces, government regulations, and competition.

• Owner's desire to retire.

These valid reasons and many others for considering a sale do not imply failure or willingness by the owner to accept less than a fair price for the business.

How Much Is The Business Worth?

Simply stated, "A business, like any asset, is worth what a buyer is willing to pay".
Buyers ask countless questions, but they are primarily concerned with a fair return on their total investment. In addition, prospective buyers make judgments about market position, proprietary know-how, competitive strengths, and quality of the assets, growth potential, and risks of the business.

Often time’s concerns are greatest where the owner directly interacts with the individual customers and/or clients. The prospective buyer worries about the retention of the customers/clients when the owner leaves. A Business Broker helps the business owner determine the true value of the business and, most importantly, can help prospective buyers understand the reasons for such value and structure a sale for the maximum benefit of both buyer and seller.

Is Confidentiality Important?

Usually the best time to obtain the highest price occurs when sales and earnings are good and trending upward. A solid earnings trend will enable a buyer to pay a higher price and still meet his return of investment criteria. A history of good performance also gives the buyer confidence in projected future earnings.
However, market conditions for business sales also significantly affect the salability of a business. Today's market is the best we have seen in the last five years due to a large number of serious buyers in the market, bank financing is readily available and rates are the best we have experienced in decades. The recent reduction in capital gain taxes nets the owner more.

Who Would Buy It?

For most companies, there are several categories of prospective buyers. The most obvious are the other companies in the same business for which the acquisition would be a logical expansion with potential economies of scale. Consideration should also be given to suppliers and customers of the business.
However, based on my experience in selling over hundreds of businesses, approximately 80% of the prospective buyers are individuals who want to control their own future. Many of them will be moving into the area from other states and countries.
I am in continuous contact with all categories of buyers and I utilize effective search procedures to find and screen those who are best qualified to buy.

How Can I Help?

I can help by using my experience and know-how; to guide you through all of the complex steps required to sell a business. The first step will be my review of the company's history and your objectives to make certain that a sale is the best course of action. This review includes an opinion of selling prices of the business in today's market.
If you decide to proceed with the sale of your business, I prepare custom-tailored presentation documents, develop buyer prospect lists from my contact files and other resources, make the proper approaches and screen the buyer prospects, and introduce only serious, qualified buyers to you.
I will handle the entire transaction from the initial introduction of the buyer through closing, including coordination with attorneys, accountants, landlords, leasing and utility companies, and other agencies.
You may ask: "Why can't I sell it myself?" There are several reasons why most owners choose not to:

• An owner representing himself cannot maintain anonymity and the lost confidentiality could seriously hurt the business.

• An owner may not be knowledgeable in current areas of law, accounting, taxes, and marketing of businesses.

• An owner typically does not have the ability or time to contact, screen and qualify a large group of prospects to find a qualified buyer who is serious and will offer a fair price.

• An owner's talents are much more effectively utilized in running the business than in trying to sell the company.

• An owner generally would not have the experience, knowledge, and negotiating skills needed to sell his company efficiently and for the best price, particularly in a highly emotional negotiation such as the sale of a business where the buyer's objectives are totally opposite of the owner's.