Consider and make the decision to sell your business.
- Be absolutely certain you are ready to sell and that you are committed to the process
Hire an EXPERIENCED broker
- Your broker will assist you on many of the tasks needed to sell your business
- Get the best price.
- Keep the sale confidential
- Prepare a detailed Selling Memorandum for the business, including: Business Summary, Financials, Asset List, and Pictures.
- Identify the universe of potential buyers: Financial Buyers, Strategic Buyers, and Industry Buyers.
- Market the business: Multiple Web Site Listings, Targeted Mailings, Phone calls.
- Negotiate with potential buyers until an agreement.
- Work with the Buyer during the evaluation process of the books, the lease, operating permits, portfolio of customers and suppliers. Give her any information of interest.
- Closing Agent Immediately give the necessary precautions to prepare documentation for the time of closing.
- Subscribe to the Purchase and Sale Agreement and other documents conveyances business ownership to Buyer.
Gather Information about your Business
- Get your books in order. Not being able to provide accurate financial statements in a timely manner can cause a deal to unravel in short order. Be sure to have the following on hand before you go to market:
- Last three years’ profit-and-loss statements.
- Last three years’ balance sheets.
- Year-to-date profit-and-loss statement.
- Current balance sheet.
- Last three years’ full tax returns.
- List of furniture, fixtures end equipment and approximate value
- List of inventories and approximate value of the inventory
- A list of the loans against the business, with amounts and payment schedule
- Copies of any equipment leases
- A copy of your franchise agreement, if applicable
Value Your Business
- Selling a business is both an art and a science, and in no other area is this more evident than in the valuation of your business. While every seller wants to achieve maximum value, setting an asking price that is too high signals to buyers that you may not be serious about selling.
- While there are a number of methods used to value a business, the most common formula for smaller transactions is a multiple of seller’s discretionary earnings (S.D.E.). This type of market-based valuation involves recasting profit-and-loss statements — adding back owner’s salary, perks and nonrecurring expenses — to find the S.D.E. of the business and then using comparable data for similar are businesses to arrive at an appropriate multiple
Prepare your business for sale
- Clean up your facility and repair any obvious defect
- Repair and service all equipment
- Catch up on all deferred maintenance
- Straighten out your books and records
Professional Help
- An attorney and accountant should be involved to help review the legal and organizational documents of the business as well as the financial condition of the business.
Confidentiality Agreement
- To be signed by the prospective buyers and their advisors
Qualify prospective buyers
- Buyer Profile Report
- Buyer resume
- Buyer personal financial statement
Receive offers from interested buyers
Execute a Letter of Intent with the proposed buyer
Sign a Purchase Agreement and complete other documentation for the sale
Collaborate with the buyer in the due diligence process
Satisfy all the conditions to the closing
