The Process of Selling your Business has four (4) identifiable phases: Planning, Buyer Search, Deal Making, and Closing. Under each of these phases important steps need to be taken to gain the maximum value for your business. CORE Business Advisors will help in defining all steps in each of these phases resulting in the successful sale of our business.

Determine Objectives: What are your needs and goals. Do you want to sell part of the company? Do you need to raise capital for future growth? Are you ready to retire or continue with the company after the sale?

Collect Information: It is critical to provide information on all aspects of your business. The quality and usability of the information is critical to combine the information into an acceptable presentation. Information creates understanding, trust and confidence for buyers.

Maximize Financial Presentation: Financial statements are prepared for tax purposes.
To gain maximum value the seller’s financial statements must be normalized to accurately state the true economic benefit (earnings) and assets of the company. The amount of economic benefit directly impacts the true worth of your enterprise. As you identify and adjust out fringe benefits, one-time expenses, non-recurring expenses, and non-business related expenses from your earnings, the normal profitability of your company emerges to create enhanced value.

Valuation of Business: Determining the “Fair Market Value” of your business is based on the I.R.S. Revenue Ruling 59-60. It is an involved procedure that takes into account the industry you are in, history of your company, financial assets, financial performance, future projections, strength, weaknesses, and the intangible circumstances associated with your business. By correctly establishing a range of value that a fully informed buyer would pay prevents you from over pricing your business or leaving any money on the table.

Preparation of Business Profile: The business must be packaged with facts, figures, records and information that correctly identifies and portrays the business accurately. The Business Profile will be the first document the buyer will see and will make a first impression. This document will educate the buyer about the company and describe the intangible assets such as management, skilled employees, customer service, customer loyalty, operations, technology systems, vendor relationships, market niches, product branding, and trademarks.

Buyer Identification Strategy: Finding the right buyer for your business that will perceive its highest value is critical. There are different buyers in the market place and all have different reasons to acquire companies. Business acquirers buy for some of the following reasons: geographic market, market dominance, product synergy, production capacity, supplier forward integration, distribution, distribution backwards and competitive integration. A defined strategy to bringing the business to market must be created to encompass the various types of buyers.

Confront Issues: Identify issues such as real estate titling, lease agreements, regulations, licensing, key employee, franchisee requirements and other concerns. If you fail to address these up front you stand the chance of disenchanting or losing the buyer, thus wasting a lot of time.

Exposure Strategy / Confidentiality: Bringing the business to market with a defined marketing plan while maintaining the highest level confidentiality is a strategy in itself. Careful consideration on the types of marketing options must be given in order to ensure maximum exposure while protecting the confidentiality of the business. Steps must be taken to guard against employees, competitors, suppliers, or customers learning that the business is for sale. It is unlikely that your professional contacts can identify enough potential purchasers for you to feel confident that you obtained the “highest and best” price.

Pre-Qualify Buyers: Does the buyer have the capabilities to acquire and run the business effectively. This includes management ability, vision, culture sensitivity, and
financial capacity to complete the transaction. Complete confidentiality must be agreed upon and adhered to until closing of the business.

Onsite Visit: Allow buyer to tour your business during off business hours. This process allows the buyer and seller to discuss the aspects of the business and establish rapport with one another. Count on several visits per buyer.

Purchase Offer: “Strike a deal” or “Meeting of the minds” describe where buyer and seller agree on the basic and maybe special terms of the sale. At this point a “letter of Intent” commonly called LOI or a legally binding Definitive Purchase Agreement will be offered by the buyer.

Negotiations: When the offer is made, then negotiations takes place between buyer and seller’s legal counsel. A Definitive Purchase Agreement will be entered into by buyer and seller describing the purchase price, terms, conditions, representations, warranties and contingencies. Proper legal counsel will save thousands of dollars.

Close: Final execution of the required legal documents to transfer title and assets. Review and processing of the monies will be disbursed.