What Items
Do I Need To Prepare In Order To Sell My Business? ...
1) Gather
Documents for Evaluation:
a) Three Years of Income Statements or Tax Returns
b) Current Balance Sheet
c) Current Asset List with Replacement Value
d) Copy of Facilities Lease Agreement
e)
Organizational Chart
2) Assist in putting together a professional marketing package. A
professional business broker is never the expert in your business or the
industry. That expertise comes from the business owner. The broker
is the marketing expert. Preparing a marketing package for your business
requires that the owner and the broker work together to determine the strengths
and weaknesses of a company and how they could impact the marketing of your
business.
Some additional points to consider:
Asking Price – Must be reasonable and fair to both seller and buyer.
Deal Structure and Financing – Is owner financing a consideration?
Does this company have the potential for SBA approved financing?
Sales and Earnings – Are revenues going up, down, or flat? What are
the trends in expenses and margins?
Company History – Is this company a startup or is there a long, steady
history?
Marketing Strategies – Is there an opportunity to improve sales through a
more aggressive marketing campaign?
Industry Trends – How are revenues trending in the industry as a whole?
Is there a consolidation movement within this industry?
Employees – Is there a stable workforce? Do the employees know the
business is for sale? Is the owner willing to stay on as an employee?
Facilities – Is there a long-term lease? Is real estate included in
the deal?
Assets and Liabilities – Exactly what assets and liabilities are to be
transferred with the sale of the company? Does it make sense to include
accounts receivable and accounts payable? Are there some assets or
liabilities that it makes sense to exclude?
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Steps To
Follow If You Want To Sell At A Later Time ...
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Professional Services for Sellers ...
Assistance in
determining asking price and deal structure
- Florida Property
Sales, Inc. can help determine an asking price and deal structure that is fair
to the seller and yet attractive to a potential buyer. This process will
include the consideration of a variety of factors including cash flow analysis,
value of assets, stability of revenues, industry, and other factors that could
influence the value of a business.
Professional
marketing program
-
All businesses listed for sale through Florida Property Sales, Inc. will have a
marketing package that is both thorough and professional. The actual marketing
of the business occurs at many levels. Potential marketing media include
business brokerage web sites, local print media, Wall Street Journal and/or
trade publications, and networking. If applicable, direct mailings to strategic
acquirers are performed.
Business Evaluations -
Screening and
pre-qualification of potential buyers
- All potential buyers sign confidentiality agreements and provide verification
of their financial ability to complete the transaction. These documents must be
on file with our office prior to receiving any non-blinded information on any
company listed for sale with Florida Property Sales, Inc. and being granted an on-site
interview with the seller. No exceptions.
Negotiations
- The
importance of a professional, competent broker to serve as liaison between buyer
and seller at this point can be critical in bringing a deal to fruition.
Closing - Florida Property Sales, Inc. works only with reputable closing attorneys and
escrow companies.
Selling Pitfalls ...
PRICE:
The asking price of
the offering must be fair and reasonable to both parties. The most common
reason that a business does not sell is an unreasonable asking price. Although
difficult, a business owner must attempt to evaluate his business through the
eyes of a potential buyer. Think of the business as an investment, because that
is the way a buyer will view it. In simplest terms, there must be a reasonable,
economic correlation between the earnings of the business and the asking price.
POTENTIAL:
The
biggest pitfall of all. Be very careful of expecting a premium because of
potential. This is frequently the hardest aspect of selling a business for a
business owner to understand, but a buyer will generally view potential as
something that cannot be bought or sold. The simple reason for this is that
almost any business has potential. With work, virtually any business can be
improved upon. Even an idea has potential. A buyer will also take the view
that if a business has so much potential, and it’s so easy, then why hasn’t the
seller already taken advantage of it.
FINANCING:
A good business
opportunity must have financing. Very few entrepreneurs are willing to pay all
cash for anything. This is an undeniable character trait of an entrepreneur.
They will expect to be able to leverage their money with financing. The fact
that they could pay cash if they wanted to is irrelevant. The viewpoint will
be: if this business opportunity is so good, why isn’t anyone willing to finance
it? A good business broker will work to get a business pre-approved for third
party financing. If the business does not qualify, the next best bet is owner
financing. If financing is not available from either source, then the chances
of bringing in a good, quality buyer are drastically reduced.
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