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FIVE THINGS TO CONSIDER WHEN SELLING YOUR BUSINESS.

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Selling ones privately held business is a daunting task. Though the successful sale of the business can be extremely rewarding, selling uncovers numerous issues that require careful consideration. If your business has EBITDA north of $500,000 your business requires a thoughtful and carefully crafted sell-side Mergers and Acquisition strategy.

Your Purpose, Experience and Demonstrated Skills

You’re an expert at leading and growing your business. You know your customers, markets, rivals, products and or services, operations, resources, and people. This is your area of expertise. Most business owners haven’t had the experience of selling a business. You've been focused on employees, sales, and growth. Proceeding into the world of Mergers and Acquisitions is like trying to learn a foreign language overnight. One needs decades of studying, learning, and executing to be considered competent. Some of the special considerations that need to be mastered include:

Fundamentals to Master

  • Proving a valuation
  • Understanding the need for confidentiality
  • Having a knowledge of the marketplace
  • Knowledge of attracting and securing motivated buyers
  • Grasping the ins and outs of corporate and commercial finance
  • Art and science of negotiations

After you've mastered the above, it's time to consider all the necessary documentation required in selling your company. This includes some of the following:

Information to Have Prepared

  • Profit & loss statements for the current and past 3-5 years
  • Current balance sheet for the current and past 3-5 years
  • Cash flow statement for the current and past 3-5 years
  • Business tax returns for the past 7 years
  • Copies of the current leases
  • Current Insurance policies
  • Standard form non-disclosure/confidentiality agreement
  • Executive summary of overview of the business
  • Detailed profile describing the business
  • Any additional documentation to substantiate the financial representations
  • Professional certificates
  • Supplier and distributor contracts
  • Employment agreements
  • Patents or other documented intellectual property

Additionally, there will be personal issues to consider and plan for: 

Personal Considerations and Issues

  • Maximize and wealth protection
  • Taxes
  • Risk assessments
  • Retirement
  • Investments
  • Estate
  • Succession

Establish A Trusted Network of Professional Advisors

As you can see, there are a myriad of issues to consider and negotiate. Engaging an advisor will help you understand the bigger picture and develop a holistic strategy that meets your specific needs during a proposed transaction. A qualified M&A advisor who is well versed in the areas mentioned above can help steer you and your business towards a successful sale. 

Next steps?

REQUEST OUR BUSINESS VALUATION GUIDE.

  • This free e-book we will explore:
  • Preparing for a valuation.
  • Valuation methodologies.
  • Valuing intangible assets.
  • Valuation mistakes to avoid.
  • Price and or value.

An exclusive offer to receive your confidential custom business valuation at our expense.