Mergers & Aquisitions
OUTSIDE THIRD PARTY SALE
According to a study by Bain Surveying Inc., (Sept 11, 2008): “47% of middle-market business owners 55 years of age and older are interested in selling their businesses within three years, yet 90 percent have not started the process of planning for that sale.”
To me, this is a disturbing revelation. It’s disturbing because planning for the single most important financial event in a business owners’ life –exiting their business- should be comforting and easy. As an Exit Planner and member of the Exit Planning Institute Inc. we would like to bring this problem to your attention and help you plan accordingly.
PREPARING FOR THE SALE OF YOUR BUSINESS
If you are like most business owners, you plan to fund your retirement with the sale of your business, because most of your personal assets are tied up in your business. You can’t plan for one without the other. Will you be able to live the lifestyle you have planned for the rest of your life if you don’t sell your business for the amount you need? What happens if you can’t sell your business at all? That’s why it’s important that if you haven’t started planning, you need to begin today.
Many entrepreneurs have no intention of selling their business right away, but what happens if circumstances make them rethink those priorities? Will they be ready?
WHY USE A CHARTERED MERGERS AND ACQUISITION PROFESSIONAL?
Business owners are able to do many things themselves, but selling their businesses should not be one of them. True, you do know much about your business and have brought it to where it is today. But, selling a business takes much more time and energy than you should spend. It will take focus away from the “day-to-day” operations and it takes much more planning, skill, and emotion than many owners might imagine.
Other things to think about:
it will be difficult to keep confidentiality throughout the sales process
you may not have the requisite knowledge necessary in accounting, law, and taxation
you may not have the skills needed in creating the marketing materials needed to sell your business
you most likely don’t have access to the software and databases that will be important in determining the sales price to charge in today’s market
The best way to make sure to obtain the highest possible sales price is to hire a Chartered Mergers and Acquisition Professional well in advance of the projected sale date.
A Chartered Mergers and acquisition Professional:
Has the skills and experience to lead you through the process of selling your business in an effective and professional manner
Will coordinate the efforts of the lawyers, accountants, and the rest of the professional advisor team
Has access to a database of buyers who are ready, willing, and have the ability to buy your business
Has the skills to evaluate the market, helping you obtain the most optimum price
Will serve as a buffer for the emotional lows and highs that many business owners will have during the sales process, exhibiting judgment and reason.
A Chartered Mergers and Acquisition Professional is essential in the selling of any business.
HOW DOES THE SALES PROCESS WORK?
The average sales cycle lasts from 9 to 12 months. While the sales process occurs, the business owners’ job is to direct the business as if they were going to continue owning it, thereby, creating more value in it on a daily basis.
The Chartered Mergers and Acquisitions Professional will confidentially market the business, finding and screening potential buyers, educating them, and eventually helping to negotiate the terms of sale. We will be part of facilitating the due diligence process and will work with the other professional advisors through the end of the closing process.
Before any discussion starts with a potential buyer, a Non-Disclosure Agreement (NDA) must be signed. Most of the potential buyers never make it to the NDA stage. A large percentage of those who do get past the NDA stage do not qualify to purchase and are not capable of moving further along the process.
If you are seriously considering the sale of your business and you want the process to be completed effectively, with the utmost care, contact us. We will answer all questions and keep your sale confidential.