Deciding to sell your business is the easy part. How to go about it is another problem altogether. Setting a price, advertising, negotiating with a prospective buyer, and a sea of legal and financial details need to be addressed. Most accounting in a privately held company is done to minimize tax obligations and may not portray the company in the best light. We deal with this problem every day and we can help you show your business in the best possible light. We can market your business without employees, customers or competitors knowing that it is for sale. This is important to smooth the continuation of the business during the selling process.
We can save you time and frustration when it comes to selling your business. We’re the business experts who can guide you through every aspect of the selling process – from arriving at a fair market price to handling financial arrangements and closing the transaction. We’re good at what we do. That’s why so many of our clients come back to us. Because so many businesses go on the market each year, selling a business is a competitive ordeal. We screen all buyers to determine their financial qualifications. Because we work with each potential buyer in finding the right business for their needs, the prospects we bring to you are genuinely interested in your business as well as financially capable of making a purchase.
Determining the right price, of course, is crucial. We’ll arrive at a fair market price that you can feel good about, because we know the prices of similar types of businesses in your area in addition to trends at work in the market. Because we screen all inquiries, then schedule meetings with serious prospects at a time convenient to you, you receive the combined benefits of convenience and absolute confidentiality. We handle all negotiations in a clean, patient, professional manner that keeps the business issues clearly in focus, rather than clouded by emotions or personalities.
Twelve steps towards successfully selling your business
- Commitment – Selling a business is serious business for all involved. You must have mental commitment to offer a fair price and to accept reasonable terms constant with the marketplace.
- Selecting Your Team – In addition to selecting a qualified business broker such as Utah Full Service Brokers, we strongly advise you to seek competent legal counsel as well as tax and accounting advice. If you do not have your own advisors, we can provide you with a list of several whom other sellers have successfully used in the past.
- Assess Value - To sell the company, you first need to determine what it’s worth. We will perform an evaluation based upon your company’s financial results, industry comparable sales, and expected future performance.
- Transition Plan – Developing the terms and structure of the sales agreement is crucial. It’s impacted by different factors such as how much cash is required at closing, minimizing the impact of taxes, continuity of key employees, and other essential considerations.
- Develop Strategy – To sell your business, you need to find a qualified buyer. This step determines the profile of likely buyers and strategies to locate the most qualified prospects. We will be selective and approach those having the right mix of talent, capital, and business experience.
- Confidential Business Profile - At this point, it’s time to begin marketing the business. We develop a brief description of your business with sufficient information to interest a prospect but not disclose the business’ identity until a Confidentiality Agreement is signed with our firm.
- Confidential Business Review – It’s important to compile detailed information about the business to assist prospects in making their decision. We compile an in-depth review of your company, its fixed assets, products, and talent. The report also includes recast financial statements without owner perks, and explains business threats and opportunities.
- Negotiating and Deal Structure – A unique mix of talents is required to facilitate a deal structure that satisfies the needs and concerns of all parties. We serve as a proficient deal-maker as well as a financial analyst, tax consultant, negotiator, and a strategic planner. Too much is on the line to not utilize the best help available.
- Letter of Intent – The buyer’s non-binding offer proposes the price, form of payment, non-compete terms and contingencies to be resolved before the closing date. You may accept, reject, or counter-offer. By now, both parties should have respective attorneys and accountants involved to ensure everything is progressing properly.
- Due Diligence and Contingency Removal – After terms of the sale are agreed upon, the proprietary details of operation are open for review and confirmation. A definitive schedule should be agreed to before due diligence activities proceed in order to move the process along in a timely manner.
- Definitive Purchase Agreement – At this point, the end is in sight! Final documents are prepared, reviewed, modified, and ultimately agreed upon by both parties.
- Inventory and Closing – This is the culmination of all your years of effort in building the business. Final documents are signed, money and titles change hands, and the necessary documents are filed with government offices. Then it’s time to celebrate, your business is sold!
What Do Buyers Look For in a Business?
- Provable Books and Records
A buyer’s offer and future cash flows depend on the accuracy and honesty of your records. Buyers look to prove that your historical numbers accurately reflect your business. - Reasonable Price and Terms
Ultimately, buyers of businesses for sale are looking for three things from the future cash flows of the business they are buying: (1) an adequate living wage, given the required skills and experience of the owner, (2) the ability to make the debt service payments, and (3) a reasonable return on the money they are investing. Generally, if the selling price supports these three elements, you’ll have a successful sale.
What are some tips for preparing a business to sell?
- DO Keep good records
- DO Allow sufficient time for the sale
- DO Accept terms
- DO Disclose, disclose, disclose
- DO Use a knowledgeable business broker
- DO Seek legal and accounting advice
- DO Ensure key employees will continue
- DO Continue to operate and grow your business
- DO Plan to train the new owner
- DO Plan to sign a non-compete agreement
- DON’T Underestimate the value of your business
- DON’T Wait too long
- DON’T Overprice
- DON’T Be rigid on terms
- DON’T Stop growing your business
