Before Meeting with Broker You Should …
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Write down your goals for the sale. Know what you must net from the sale.
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Review everything you’re selling. Is it organized? Working? Does it look good? Is it necessary? Is it clean?
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Fix things that must be fixed.
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Spruce up areas that have run down.
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Know what you need to achieve.
Before Meeting with Buyers We Will …
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Prepare to prove the value of your business to naturally skeptical Buyers.
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Prepare a suitable transition plan that’s fair to the buyer and realistic based on the complexity of your business.
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Prepare to search for the right buyer.
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Prepare a compelling presentation.
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Price it fairly in today’s market.
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Position it in market for the best advantage.
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Promote it aggressively yet confidentially.
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Promotion: Highlighting the Positives!
Important Concepts…….
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Confidentiality is vital when selling a business to protect its value.
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Relationship between Buyer and Seller is ongoing after closing.
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Credibility of all material information supplied by Seller is vital.
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Patience is rewarded. In time, the right buyer will be found.
About Deals…….
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The higher the down payment requirements, the fewer the qualified prospects.
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Most Buyers don’t really know how to value your business. Burden of proof is always on the Seller. It’s not personal!
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Up front disclosures are a must to avoid deal-killing surprises.
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Negotiation is normal. It’s not personal!
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Surprises are deal wreckers!
Deal Roadblocks…..
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Price appears to be too high, aka Price Not Justifiable.
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Revenue or earnings not clearly provable.
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Seller won’t provide some small % of financing OR train OR non-compete.
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No manager who can run daily operations.
Why Do Buyers Make Offers?
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Buyers make offers to get the Income they need for their lifestyle.
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To get a good deal.
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To gain self-esteem from pride of ownership.
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Believe they can get the capital to buy it.
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Believe they can successfully run your business.
Common Red Flags for Buyers…..
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Representations or omissions, even minor, that prove to be both wrong and bad for the Buyer.
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If it’s so good, then why is it for sale?
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Fear that Seller may not really be getting out of this industry and might become a competitor.
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Feeling that the business may be too hard for buyer to really learn and control.
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Unreported Revenue and unreported expenses.
To Get the Deal Done Buyer Concerns must be met. What’s next?
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Parties enter into a “conditional” contract.
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Buyer investigates Seller’s proof of earnings and other material issues.
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Seller investigates Buyer’s ability to fund the purchase and to make payments.
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If and when both parties are satisfied and financing is approved, the contract becomes firm.
Closing and Beyond………
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Closing is scheduled based on availability of funding and to suit the parties.
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In preparation for closing lien searches are conducted regarding the assets being sold, including title searches if real property is involved.
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In order to close Seller must show proof of clear title – free of claims from creditors, judgments, equity holders, third party interests, and marital interests.
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After closing, most Sellers and Buyers will have an ongoing relationship that includes Buyer making payments to Seller and Seller familiarizing Buyer with business.
