Ideally, you start preparing for sale early in your business life-cycle, the day you open. If this did not happen, you are definitely in the majority. However, now is the time to start because the more you know about what buyers want and what you can expect from the market,… Read More »The Seven Stages of Selling Your Business
Buyers want to see clear, well-organized financials, preferably compiled by a reputable firm. This demonstrates that you utilize your financials in running your successful business and optimizing operations. If your business has more than $10 million in revenue, invest in an audit at least three years prior to selling or… Read More »Organize Your Financials
Marketers will sometimes talk about 4, 5 or 7 P formula of selling. Known as the “marketing mix,” the emphasis a company puts in each area can have a direct impact on sales and profits. Please note, selling a business is not like selling a product, although similar factors impact… Read More »The “Five P’s” of Selling Your Business
Earnouts are used to bridge a valuation gap between a buyer and a seller. It’s a compromise, of sorts, to break a purchase-price deadlock when the seller wants more than the buyer is willing (or able) to pay. In an earnout, a portion of the purchase price is paid out… Read More »Earnouts: Breaking the M&A Deadlock
An exclusivity clause is an important part of M&A transactions. Also known as a ‘no shop’ provision, it prohibits the seller from sharing information or negotiating with other would-be buyers for a specified timeframe. Prior to this, the seller is negotiating with several buyers. The goal is to entertain multiple… Read More »Exclusivity Clause Protects Buyer Investment in M&A
In a recent conversation with a Business Owner seeking to sell a 10-year-old business, we discovered that there were many personal relationships intertwined with their business ones. The major issues: the Owner’s brother-in-law’s company provided the major raw material while a childhood friend provided additional goods. Additionally, other suppliers had… Read More »Are Your Vendors Personal Relationships?
If a Business Owner has a physical or electronic Rolodex with one or more key customers that they have dealt with exclusively, then a Buyer may become much less interested in buying the business, especially at a premium. Put yourself in the Buyer’s shoes. The thought in the forefront of… Read More »Are Customers Only in Your Rolodex?
When marketing your business, one of the first things buyers will see is an executive summary. As an initial introduction to your company, the summary has to catch a buyer’s attention without giving away confidential details. It’s critically important that you have the right information stated in the correct way.… Read More »Writing the Perfect Teaser
We just had a management meeting with one of our clients yesterday. It did not go well. In the M&A world, a management meeting is like a first date. It’s the first time the sellers and would-be buyers meet face-to-face. It’s an opportunity to showcase your business, get to know… Read More »Forget The “I” In Team When Selling Your Business
A successful sale requires a good deal of pre-planning. We recommend owners start preparing at least three years in advance. Depending on your situation, we might suggest developing key staff or management, documenting operations, or controlling working capital. The national average for a home sale is 68 days while the… Read More »A Process, Not An Event