In order to sell one’s business using the services of a business broker, a listing agreement is almost always required. For the owner of the business, signing the agreement legally authorizes the sale of the business. This simple act of signing represents the end of ownership. For some business owners, it means heading into uncharted territory after the business is sold. For many it also signifies the end of a dream. The business owner may have started the business from scratch and/or taken … [Read more...]
What a Buyer May Really Be Looking At
September 24, 2014 by
Buyers, as part of their due diligence, usually employ accountants to check the numbers and attorneys to both look at legal issues and draft or review documents. Buyers may also bring in other professionals to look at the business’ operations. The prudent buyer is also looking behind the scenes to make sure there are not any “skeletons in the closet.” It makes sense for a seller to be just as prudent. Knowing what the prudent buyer may be checking can be a big help. A business intermediary … [Read more...]
What a Buyer May Really Be Looking At
August 10, 2014 by
Buyers, as part of their due diligence, usually employ accountants to check the numbers and attorneys to both look at legal issues and draft or review documents. Buyers may also bring in other professionals to look at the business’ operations. The prudent buyer is also looking behind the scenes to make sure there are not any “skeletons in the closet.” It makes sense for a seller to be just as prudent. Knowing what the prudent buyer may be checking can be a big help. A business intermediary … [Read more...]
A “Pig in a Poke"
June 26, 2014 by
Once a buyer has negotiated a deal and secured the necessary financing, he or she is ready for the due diligence phase of the sale. The serious buyer will have retained an accounting firm to verify inventory, accounts receivable and payables; and retained a law firm to deal with the legalities of the sale. What’s left for the buyer to do is to make sure that there are no “skeletons in the closet,” so he or she is not buying the proverbial “pig in a poke.” The four main areas of concern are: … [Read more...]
Prepare Your Company To Be Bought
April 22, 2014 by
(Reprinted With Permission - Original Article Here.) By David Mead President - The Mead Consulting Group, Inc. 894 Anaconda Ct. Castle Rock, Colorado 80108 303-660-8135 www.meadconsultinggroup.com Prepare Your Company To Be Bought [Editor's Note: Many business owners fail to prepare their businesses for a sale either because they believe that a potential sale is far off in the future or because they are focused on current issues and do not consider preparation to be a priority. … [Read more...]
The Pre-Sale Business Tune-Up
January 29, 2014 by
Owners are often asked, "do you think you will ever sell your business?" The answer varies from, "when I can get my price" to "never" to "I don't really know" to everything in between. Most sellers may think to themselves when asked this question, "I'll sell when the time is right." Obviously, misfortune can force the decision to sell. Despite the questions, most business owners just go merrily along their way conducting business as usual. They seem to believe in the old expression that … [Read more...]
Considering Selling? Some Things to Consider
January 9, 2014 by
Know what your business is worth. Don’t even think about selling until you know what your business should sell for. Are you prepared to lower your price if necessary? Prepare now. There is an often-quoted statement in the business world: “The time to prepare your business to sell is the day you buy it or start it.” Easy to say, but very seldom adhered to. Now really is the time to think about the day you will sell and to prepare for that day. Sell when business is good. The old quote: “The … [Read more...]
Can You Really Afford to Sell?
December 19, 2013 by
In many cases, the sale of a small company is “event” driven. That is, the reason for sale is often an event such as a health decline or illness, divorce, partnership issues, or even a decline in business. A much more difficult reason for selling is one in which the owners simply want to retire and live happily ever after. Here is the problem: Suppose the owners have a very prosperous distribution business. They each draw about $200,000 annually from the business plus cars and other … [Read more...]
Surprises CEOs Face When Selling Their Companies
November 1, 2013 by
Surprise #1: Substantial Time Commitment In the real estate business, once the owner engages the broker there is very little for the owner to do until the broker presents the various offers from the potential buyers. In the M&A business, there is a substantial time commitment required of the CEO/Owner in order to complete the sale properly, professionally and thoroughly. The following examples are worth noting: Offering Memorandum: This 30 + page document is the cornerstone of the … [Read more...]
Company Weaknesses
September 18, 2013 by
Take two seemingly identical companies with very similar financials, but one of the companies was worth substantially more than the other company. One company will sell for $10 million “as is” or some changes can be made and the same company can be sold for $15 million. Following is a partial list of potential company weaknesses to consider in order to assess a company’s vulnerability. Customer Concentration: First, one has to analyze the situation. The U.S. Government might be considered … [Read more...]
